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I don't see that Bitcoin has any hope of solving wealth inequality. If anything, it's a mechanism to entrench it. Up to now: 1. only a fraction of a minority o

I don't see that Bitcoin has any hope of solving wealth inequality. If anything, it's a mechanism to entrench it. Up to now: 1. only a fraction of a minority of the population have gained wealth from Bitcoin, and 2. those people had wealth enough to buy sufficient Bitcoin in the first place.

wmf 5y ago
With 60,000x gains, you didn't need to buy much Bitcoin to become rich. Of course, winning lottery tickets have even better odds but they're not solving inequality either. An argument has been made that "elites" were "brainwashed by the system" to believe that crypto would fail and thus they never bought in. Instead, "outsiders" bought crypto and may one day eclipse the old elites. However, crypto's "outsider" early adopters were mostly middle-class techies not working-class people. So yeah, Bitcoin is still not solving anything.
- chrisco255 5y ago
  Yeah, if you were in on the ground floor and if you had conviction not to sell once you 10x or 100x. Few people can make that claim. But meanwhile there have been several other crypto projects that have cropped up that have seen life-changing gains and are actually built on sustainable, value-adding platforms (Ethereum, Uniswap, Synthetix, Aave, etc).
- ChainOfFools 5y ago
  > winning lottery tickets have even better odds but they're not solving inequality either. lotteries are cancer and I'm in no way a supporter of them (except to acknowledge they may be the best answer to a problem that has no good solutions), but the model does work like a vice tax, in that a substantial fraction of ticket proceeds go toward various social and investment programs. the prizes only consume 20-70% of the revenue (specific fraction depends on the game).
doggosphere 5y ago
Wealth inequality comes when you can create money out of thin air and buy bonds with it, injecting cash into the financial system. Bond owners get to sell their devaluing assets to the fed at inflated prices. Those profits get put back into the system via buying stocks, bitcoin, houses and other rare assets. The people who gain the most are the people who already own this assets, which is typically not the poor. Bitcoin cannot be created out of thin air. You can't arbitrarily decide to inject more of it into the system. When you own Bitcoin, your holdings cannot be debased. Since poor people's wealth is mostly cash, debasement of currency hurts them the most. There is a tragic irony, in where if a poor person throws their savings into Bitcoin, they are chastised as being foolish and preyed upon, and they need to be protected. If they keep their savings in fiat, they get debased (USD debased by 20% in 2020, 320% in last 20 years) as inflation eventually catches up. The Feds took away the ability to save. A Bank of America savings accounts offer 0.01% APY, 0.05% if you have more money. No one believes in a future where saving is worth anything.
- teachingassist 5y ago
  > Since poor people's wealth is mostly cash A reasonable definition of 'poor' is holding no net wealth, or less - which applies to 30-40% of households in Scotland (for example): https://www.gov.scot/publications/wealth-assets-scotland-2006-2014/pages/6/ https://www.gov.scot/publications/wealth-assets-scotland-200... So your arguments here don't apply for my understanding of 'poor'. You have to be approaching median wealth before those arguments start to apply, if they do at all. A poor person is not greatly affected by debasement of their savings in currency, because they don't have any savings. A poor person is not considering throwing their savings into Bitcoin, because they don't have any savings (beyond essential cash).
  - doggosphere 5y ago
    https://en.wikipedia.org/wiki/Wealth_inequality_in_the_United_States https://en.wikipedia.org/wiki/Wealth_inequality_in_the_Unite... "The bottom half of the income distribution had a huge share of its wealth tied up in real estate while owning essentially no shares of corporate stock. The top 1 percent, by contrast, wasn't just rich — it was specifically rich in terms of owning companies, both stock in publicly traded ones ("corporate equities") and shares of closely held ones ("private businesses")...So the value of those specific assets — assets that people in the bottom half of the distribution never had a chance to own in the first place — soared. NPR also reported in 2017 that the bottom 50% of U.S. households (by net worth) have little stock market exposure (neither directly nor indirectly through 401k plans), writing: "That means the stock market rally can only directly benefit around half of all Americans — and substantially fewer than it would have a decade ago, when nearly two-thirds of families owned stock." A poor person is not greatly affected by debasement of their savings in currency, because they don't have any savings. Debasement eventually shows up in the form of inflation of consumer goods prices. And inflated housing prices makes it nearly impossible for future generations to ever own a home, depending on the city.
wufufufu 5y ago
Then any new asset type, IPO, or security also entrenches wealth inequality for the same reasons. Unfortunately that would have to happen to get away from using fiat currency. My original comment was just saying that I think Bitcoin is the best alternative we have, not that it would necessarily succeed.

wmf 5y ago

With 60,000x gains, you didn't need to buy much Bitcoin to become rich. Of course, winning lottery tickets have even better odds but they're not solving inequality either. An argument has been made that "elites" were "brainwashed by the system" to believe that crypto would fail and thus they never bought in. Instead, "outsiders" bought crypto and may one day eclipse the old elites. However, crypto's "outsider" early adopters were mostly middle-class techies not working-class people. So yeah, Bitcoin is still not solving anything.

chrisco255 5y ago
Yeah, if you were in on the ground floor and if you had conviction not to sell once you 10x or 100x. Few people can make that claim. But meanwhile there have been several other crypto projects that have cropped up that have seen life-changing gains and are actually built on sustainable, value-adding platforms (Ethereum, Uniswap, Synthetix, Aave, etc).
ChainOfFools 5y ago
> winning lottery tickets have even better odds but they're not solving inequality either. lotteries are cancer and I'm in no way a supporter of them (except to acknowledge they may be the best answer to a problem that has no good solutions), but the model does work like a vice tax, in that a substantial fraction of ticket proceeds go toward various social and investment programs. the prizes only consume 20-70% of the revenue (specific fraction depends on the game).

doggosphere 5y ago

Wealth inequality comes when you can create money out of thin air and buy bonds with it, injecting cash into the financial system. Bond owners get to sell their devaluing assets to the fed at inflated prices. Those profits get put back into the system via buying stocks, bitcoin, houses and other rare assets. The people who gain the most are the people who already own this assets, which is typically not the poor. Bitcoin cannot be created out of thin air. You can't arbitrarily decide to inject more of it into the system. When you own Bitcoin, your holdings cannot be debased. Since poor people's wealth is mostly cash, debasement of currency hurts them the most. There is a tragic irony, in where if a poor person throws their savings into Bitcoin, they are chastised as being foolish and preyed upon, and they need to be protected. If they keep their savings in fiat, they get debased (USD debased by 20% in 2020, 320% in last 20 years) as inflation eventually catches up. The Feds took away the ability to save. A Bank of America savings accounts offer 0.01% APY, 0.05% if you have more money. No one believes in a future where saving is worth anything.

teachingassist 5y ago
> Since poor people's wealth is mostly cash A reasonable definition of 'poor' is holding no net wealth, or less - which applies to 30-40% of households in Scotland (for example): https://www.gov.scot/publications/wealth-assets-scotland-2006-2014/pages/6/ https://www.gov.scot/publications/wealth-assets-scotland-200... So your arguments here don't apply for my understanding of 'poor'. You have to be approaching median wealth before those arguments start to apply, if they do at all. A poor person is not greatly affected by debasement of their savings in currency, because they don't have any savings. A poor person is not considering throwing their savings into Bitcoin, because they don't have any savings (beyond essential cash).
- doggosphere 5y ago
  https://en.wikipedia.org/wiki/Wealth_inequality_in_the_United_States https://en.wikipedia.org/wiki/Wealth_inequality_in_the_Unite... "The bottom half of the income distribution had a huge share of its wealth tied up in real estate while owning essentially no shares of corporate stock. The top 1 percent, by contrast, wasn't just rich — it was specifically rich in terms of owning companies, both stock in publicly traded ones ("corporate equities") and shares of closely held ones ("private businesses")...So the value of those specific assets — assets that people in the bottom half of the distribution never had a chance to own in the first place — soared. NPR also reported in 2017 that the bottom 50% of U.S. households (by net worth) have little stock market exposure (neither directly nor indirectly through 401k plans), writing: "That means the stock market rally can only directly benefit around half of all Americans — and substantially fewer than it would have a decade ago, when nearly two-thirds of families owned stock." A poor person is not greatly affected by debasement of their savings in currency, because they don't have any savings. Debasement eventually shows up in the form of inflation of consumer goods prices. And inflated housing prices makes it nearly impossible for future generations to ever own a home, depending on the city.

wufufufu 5y ago

Then any new asset type, IPO, or security also entrenches wealth inequality for the same reasons. Unfortunately that would have to happen to get away from using fiat currency. My original comment was just saying that I think Bitcoin is the best alternative we have, not that it would necessarily succeed.