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The top 1000 investors hold 15% of the supply? That’s not “highly centralized” if you compare to the stock market. For Tesla, one single shareholder holds 17% o

by Hermel 5y ago

The top 1000 investors hold 15% of the supply? That’s not “highly centralized” if you compare to the stock market. For Tesla, one single shareholder holds 17% of the whole company.

2muchcoffeeman 5y ago
But isn’t the dream to have some distributed system that no one can control? As an outsider looking in and comparing to the perceived values, this is yet another reason crypto is not worth your attention.
- po1nt 5y ago
  I don't believe total decentralization is possible. Yet still this ratio is a little unsettling. This issue is not limited to bitcoin but all the cryptocurrencies. But I believe it's still better than to have single party control the whole currency.
- More-nitors 5y ago
  well wasn't the dream about "no-fee transactions"? "no one can control" means: 1. you can't get bail-outs from phishing/fraud/mistakes (there are card companies/banks that actually provide this service) 2. combined with anonymity, means more wiggle-room for tax-evasion/black-market... (though if you look carefully, you'll have to 'financially-dance' a lot to get actual anonymity in bitcoin... all transactions are logged, right?)
Gustomaximus 5y ago
A company is very different from a currency. Apples and oranges comparing those in terms of centralisation.
- beambot 5y ago
  How does the USD currency compare? I'd wager that the top-10 banks and the various central reserve banks own or control the vast majority of USD.
  - gitrog 5y ago
    Traditional currencies aren't advertised as being decentralised.
  - erispoe 5y ago
    Fiat currency is a state monopoly. That's how it's designed to work.
  - TeMPOraL 5y ago
    If Bitcoin is comparable to USD, then there's nothing justifying its use over USD, with its associated ludicrous waste of energy and environmental impact.
    - neuroma 5y ago
      While I'm sure you're correct, does that make the comparison any less useful and informative?
      - TeMPOraL 5y ago
        It doesn't. The comparison is useful and informative - in pointing out ways in which Bitcoin doesn't, and can't ever, deliver on its promise. At best, if it were ever integrated into serious economy, it would just present an extra layer of indirection and complexity in a system working the same way otherwise.
    - fsflover 5y ago
      The government can print USD for themselves, effectively stealing money from everyone through inflation. With bitcoin, even "small group controlling 90%" can't do that.
      - worrycue 5y ago
        They can but generally they don’t allow inflation to exceed 3% - ideally keeping it with 1-3% - as the destruction of the currency is not worth it long term.
- agos 5y ago
  a company is very different from a currency, unless you are talking about Tether (the cryptocurrency) and Tether Limited (the company)
somethoughts 5y ago
There seem to be a lot of similarities between crypto and growth stocks that are held by founders with > 15% ownership. Similar to early stage investors who have essentially zero cost basis, early BTC holders have zero cost basis when BTC was pennies each versus late stage current investors paying in at $60,000 for each BTC. For early BTC holders its easy to diamond hand. There are a lot of similarities for sure between Tesla stock and BTC in terms of price versus traditional measures of value (based on current income and enterprise value), not to mention the volatility. There is not as much price discovery when a handful of owners own more than 50% of stock or crypto and are easily diamond handing. The price discovery is only happening on the portion that's actively trading which can distort the market price. I bet in the early days of BTC there were a lot of tricks like the Jason Fried/DHH Basecamp unicorn example[1]. As they eventually lose interest/need to pass assets to the kids, when they start unloading, there will be price drops as there were once Bill Gates started unloading MSFT stock. Part of the challenge that Steve Ballmer faced (other than lackluster leadership) was the headwinds and downward pressure created by BillG's retirement related unloading of MSFT stock. [1] https://signalvnoise.com/posts/1941-press-release-37signals-valuation-tops-100-billion-after-bold-vc-investment https://signalvnoise.com/posts/1941-press-release-37signals-...
- discobean 5y ago
  > For early BTC holders its easy to diamond hand That's not true, say your investment of a few dollars is now $1k. And the price is popping and just dropped 30% in one day? Would you sell for the profit? What if that investment got to 10k? 100k? People sell at some point. I'd argue it's incredibly hard to diamond hand for early holders, that is why there are more stories of people selling their coin for cheap rather than diamond hands.
  - gomox 5y ago
    I think he meant its easy _now_. Once you are 10.000x on your investment your perspective drastically changes.
- gitfan86 5y ago
  The big difference between BTC and MSFT/TSLA is that successful companies have cash flow. MSFT has a dividend that it pays out every year. TSLA is eliminating debt and adding cash to its balance sheet. If everyone stopped buying BTC and only held BTC and bought another crypto currency, BTC would go to zero since no one would be putting money in. Similar to a pyramid scheme, once there is no new money it collapses. On the other hand, if investors decided to never buy MSFT again and sold their stock the price could go down a lot, but it couldn't go to zero because that would make the dividend yield go to infinity. If MSFT went down to $20/share it would yield over 10% a year, and it is absurd to think that no one would want to get 10% a year return. Obviously companies can and do go bankrupt, but for this comparison I'm comparing successful crypto to successful companies.
delaaxe 5y ago
I'm sure Elon holds more than 17%?
- halfdan 5y ago
  He holds 16.98% to be precise.
nuerow 5y ago
> For Tesla, one single shareholder holds 17% of the whole company. If said investor abused his leverage to manipulate the stock value to dump his holding on unwitting buyers prior to making it tank, he would be facing a prison sentence. In BTC that would be just another uneventful day.
- capableweb 5y ago
  The problem is that an investor that holds 17% has leverage. In Bitcoin, having a certain percentage of the supply means nothing really, and you can abuse a leverage that doesn't exist. It's more likely that the developers has leverage that could be abused, but then their own holdings would tank, so unlikely to happen.
  - b112 5y ago
    Unless the goal is to attract independent / free market types, then after they invest, destroy BTC, thus reducing the economic might of the free thinking class...
- csomar 5y ago
  So what you are basically saying is that the stock market is not really a free market; and has arbitrary restrictions to make everything looks stable and legit. Okay.
  - nuerow 5y ago
    > So what you are basically saying is that the stock market is not really a free market; and has arbitrary restrictions to make everything looks stable and legit. Okay. That makes as much sense as claiming that a free society isn't really free because you're subjected to arbitrary restrictions that punish you for stealing and embezzling.
  - darkcha0s 5y ago
    I can't murder my neighbour, so you're saying we are not actually living in a free society
wcoenen 5y ago
According to [1], Elon held just shy of 23% of Tesla at the end of 2020. See table with "% ownership" column at the bottom of the page. [1] https://whalewisdom.com/stock/tsla https://whalewisdom.com/stock/tsla
rullelito 5y ago
Bitcoin is not a company.
chrischen 5y ago
It eventually will only merely represent existing income inequality already present in society. However, it's still in the interest of those minority few who control bitcoin not to sabotage its value.
- ThaJay 5y ago
  There will be (and is) some movement, but it's mostly around the middle class. Up and down. Poor people can't get in and fat cats dominate so the more you zoom out the more you're right.
SergeAx 5y ago
Do you mean Elon Musk? Because data available for me says that top shareholders are Vanguard and Blackrock funds with ~6% and ~5%.
- skinnymuch 5y ago
  That’s probably a list of institutional funds only
adflux 5y ago
Bad comparison. Better to compare us dollar and suggest someone would own 15% of all usd in circulatiln

by Hermel 5y ago

The top 1000 investors hold 15% of the supply? That’s not “highly centralized” if you compare to the stock market. For Tesla, one single shareholder holds 17% of the whole company.

2muchcoffeeman 5y ago

But isn’t the dream to have some distributed system that no one can control? As an outsider looking in and comparing to the perceived values, this is yet another reason crypto is not worth your attention.

po1nt 5y ago
I don't believe total decentralization is possible. Yet still this ratio is a little unsettling. This issue is not limited to bitcoin but all the cryptocurrencies. But I believe it's still better than to have single party control the whole currency.
More-nitors 5y ago
well wasn't the dream about "no-fee transactions"? "no one can control" means: 1. you can't get bail-outs from phishing/fraud/mistakes (there are card companies/banks that actually provide this service) 2. combined with anonymity, means more wiggle-room for tax-evasion/black-market... (though if you look carefully, you'll have to 'financially-dance' a lot to get actual anonymity in bitcoin... all transactions are logged, right?)

Gustomaximus 5y ago

A company is very different from a currency. Apples and oranges comparing those in terms of centralisation.

beambot 5y ago
How does the USD currency compare? I'd wager that the top-10 banks and the various central reserve banks own or control the vast majority of USD.
- gitrog 5y ago
  Traditional currencies aren't advertised as being decentralised.
- erispoe 5y ago
  Fiat currency is a state monopoly. That's how it's designed to work.
- TeMPOraL 5y ago
  If Bitcoin is comparable to USD, then there's nothing justifying its use over USD, with its associated ludicrous waste of energy and environmental impact.
  - neuroma 5y ago
    While I'm sure you're correct, does that make the comparison any less useful and informative?
    - TeMPOraL 5y ago
      It doesn't. The comparison is useful and informative - in pointing out ways in which Bitcoin doesn't, and can't ever, deliver on its promise. At best, if it were ever integrated into serious economy, it would just present an extra layer of indirection and complexity in a system working the same way otherwise.
  - fsflover 5y ago
    The government can print USD for themselves, effectively stealing money from everyone through inflation. With bitcoin, even "small group controlling 90%" can't do that.
    - worrycue 5y ago
      They can but generally they don’t allow inflation to exceed 3% - ideally keeping it with 1-3% - as the destruction of the currency is not worth it long term.
agos 5y ago
a company is very different from a currency, unless you are talking about Tether (the cryptocurrency) and Tether Limited (the company)

somethoughts 5y ago

There seem to be a lot of similarities between crypto and growth stocks that are held by founders with > 15% ownership. Similar to early stage investors who have essentially zero cost basis, early BTC holders have zero cost basis when BTC was pennies each versus late stage current investors paying in at $60,000 for each BTC. For early BTC holders its easy to diamond hand. There are a lot of similarities for sure between Tesla stock and BTC in terms of price versus traditional measures of value (based on current income and enterprise value), not to mention the volatility. There is not as much price discovery when a handful of owners own more than 50% of stock or crypto and are easily diamond handing. The price discovery is only happening on the portion that's actively trading which can distort the market price. I bet in the early days of BTC there were a lot of tricks like the Jason Fried/DHH Basecamp unicorn example[1]. As they eventually lose interest/need to pass assets to the kids, when they start unloading, there will be price drops as there were once Bill Gates started unloading MSFT stock. Part of the challenge that Steve Ballmer faced (other than lackluster leadership) was the headwinds and downward pressure created by BillG's retirement related unloading of MSFT stock. [1] https://signalvnoise.com/posts/1941-press-release-37signals-valuation-tops-100-billion-after-bold-vc-investment https://signalvnoise.com/posts/1941-press-release-37signals-...

discobean 5y ago
> For early BTC holders its easy to diamond hand That's not true, say your investment of a few dollars is now $1k. And the price is popping and just dropped 30% in one day? Would you sell for the profit? What if that investment got to 10k? 100k? People sell at some point. I'd argue it's incredibly hard to diamond hand for early holders, that is why there are more stories of people selling their coin for cheap rather than diamond hands.
- gomox 5y ago
  I think he meant its easy _now_. Once you are 10.000x on your investment your perspective drastically changes.
gitfan86 5y ago
The big difference between BTC and MSFT/TSLA is that successful companies have cash flow. MSFT has a dividend that it pays out every year. TSLA is eliminating debt and adding cash to its balance sheet. If everyone stopped buying BTC and only held BTC and bought another crypto currency, BTC would go to zero since no one would be putting money in. Similar to a pyramid scheme, once there is no new money it collapses. On the other hand, if investors decided to never buy MSFT again and sold their stock the price could go down a lot, but it couldn't go to zero because that would make the dividend yield go to infinity. If MSFT went down to $20/share it would yield over 10% a year, and it is absurd to think that no one would want to get 10% a year return. Obviously companies can and do go bankrupt, but for this comparison I'm comparing successful crypto to successful companies.

delaaxe 5y ago

I'm sure Elon holds more than 17%?

halfdan 5y ago
He holds 16.98% to be precise.

nuerow 5y ago

> For Tesla, one single shareholder holds 17% of the whole company. If said investor abused his leverage to manipulate the stock value to dump his holding on unwitting buyers prior to making it tank, he would be facing a prison sentence. In BTC that would be just another uneventful day.

capableweb 5y ago
The problem is that an investor that holds 17% has leverage. In Bitcoin, having a certain percentage of the supply means nothing really, and you can abuse a leverage that doesn't exist. It's more likely that the developers has leverage that could be abused, but then their own holdings would tank, so unlikely to happen.
- b112 5y ago
  Unless the goal is to attract independent / free market types, then after they invest, destroy BTC, thus reducing the economic might of the free thinking class...
csomar 5y ago
So what you are basically saying is that the stock market is not really a free market; and has arbitrary restrictions to make everything looks stable and legit. Okay.
- nuerow 5y ago
  > So what you are basically saying is that the stock market is not really a free market; and has arbitrary restrictions to make everything looks stable and legit. Okay. That makes as much sense as claiming that a free society isn't really free because you're subjected to arbitrary restrictions that punish you for stealing and embezzling.
- darkcha0s 5y ago
  I can't murder my neighbour, so you're saying we are not actually living in a free society

wcoenen 5y ago

According to [1], Elon held just shy of 23% of Tesla at the end of 2020. See table with "% ownership" column at the bottom of the page. [1] https://whalewisdom.com/stock/tsla https://whalewisdom.com/stock/tsla

rullelito 5y ago

Bitcoin is not a company.

chrischen 5y ago

It eventually will only merely represent existing income inequality already present in society. However, it's still in the interest of those minority few who control bitcoin not to sabotage its value.

ThaJay 5y ago
There will be (and is) some movement, but it's mostly around the middle class. Up and down. Poor people can't get in and fat cats dominate so the more you zoom out the more you're right.

SergeAx 5y ago

Do you mean Elon Musk? Because data available for me says that top shareholders are Vanguard and Blackrock funds with ~6% and ~5%.

skinnymuch 5y ago
That’s probably a list of institutional funds only

adflux 5y ago

Bad comparison. Better to compare us dollar and suggest someone would own 15% of all usd in circulatiln