6 ms·

Bootstrapping a new cryptocurrency where 90% of the coins go to relatively few early adopters is the worst possible way to fix financial inequality. The crypto

Bootstrapping a new cryptocurrency where 90% of the coins go to relatively few early adopters is the worst possible way to fix financial inequality. The crypto holders would love if the world switched to using the cryptocurrency they’re invested in because it would make them extraordinarily wealthy relative to the average person buying in late. I don’t understand how anyone can honestly suggest that a gradual changeover to a specific cryptocurrency would be anything other than disastrous for financial inequality.

bombcar 5y ago
Pretending a system that has specific names for various scams will somehow reduce inequality is hilarious. I feel people think “if everyone had bought Bitcoin when it was cheap, everyone would be rich now” and then think that Safemoon rugpull #42053 will somehow do it.
- ______-_-______ 5y ago
  - rvz 5y ago
    Not sure why you are downvoted since here on HN, a bad egg soils the bunch. The logic with them is as follows with an example of a fallacy with cars and the environment: 'The majority of cars worldwide are not electric. They are all petrol and diesel cars. That means that ALL cars are bad for the environment and that will not change and thus should be all banned.' Not all cryptocurrency projects are scams, just like not all cars are burning up the planet. The absolutism towards whether if all cryptocurrency projects will go away due to a 'bUnCH OF Scam PrOjEctS' or 'it's ALl a scAm™' is just as silly as suggesting that all cryptocurrency projects are guaranteed to survive, 'becAuse iT is the FutURE, bRO™' or 'JUst WaiT fOr ThIs PrOJEct ReAL sooN™'. I'll tell you that both extremes are incorrect. That is even before accounting for regulations getting involved.
    - throwaway82652 5y ago
      - idiotsecant 5y ago
        >they're all built on the idea of creating a fake, unregulated private money out of nothing and then getting people to pay increasing prices for it. As opposed to our current financial system which is built on the idea of creating real (except when we reeeeally want some extra money, in which case we just make some more), regulated (unless your regulated activity is conducted by an entity that is sufficiently rich or powerful) money and then control a global hegemony with it. Crypto is not a solution to every problem and it definitely makes some new ones, but it sure would make for an interesting redistribution of power. I think there reaches a point where the levers of the modern currency system are much, much too attractive for human governments to be trusted with.
        throwaway82652 5y ago
        >As opposed to our current financial system No that's not what I was saying and this is one of the most terrible things about any cryptocurrency discussion. People can't seem to avoid viewing it as something "opposed" to any current financial system, when that's not true. Cryptocurrency at best is the same as the current financial system and that's a huge stretch if you can somehow avoid all the negative externalities created by the insistence on using blockchains. So I would really suggest you avoid this angle when talking about this. Yes, all money is technically "fake". The difference is that real currencies that function as currencies are backed by some kind of real productive human activity to sustain that thing. Cryptocurrency by definition is not this, and it never can be unless you discard the fundamental concepts of it. >but it sure would make for an interesting redistribution of power. No not really. If you define "interesting" as something unpredictable and dramatic, then it would be more interesting to have the government raise tax rates to 99% and then randomly redistribute the proceeds via lottery. But nobody wants to talk about that because it doesn't require any kind of tech solutionism like cryptocurrency does. And also it would just be awful for most people. But hey, if you just want to convince some rich people to voluntarily pool their money into a trust that then redistributes it via lottery, you might as skip straight to that and avoid all the cryptocurrency shenanigans.
  - throwaway82652 5y ago
    >Are you saying if an industry has any bad parts, it can't have any good parts? Cryptocurrency is not an industry and doesn't have any good parts. The technology itself is useless and universally bad for any practical purpose. It solves no problems, it only creates them. The "good things" done by companies using cryptocurrency are in spite of the technology, not because of it. Some companies don't even seem to bother with this though, and I'll call those out specifically. I would also call out a virus-scanning company if we found out they were secretly developing and deploying the viruses on the side and then selling the solution to increase their own profits. The same thing is happening here with a lot of blockchain products except they aren't even trying to keep it a secret what they're doing.
Nevermark 5y ago
Are you distinguishing equality & inequity? As I understand it, “equality” in a society refers to people’s equal access and treatment in some aspect of society (health, education, financial, legal, …) Whereas “inequity” in a society refers to different outcomes for people (billionaires vs the indebted unemployed, for instance). Outside of scams and fraudulent or deceptive launches, crypto seems to be very equality supportive to me. That it has magnified inequity isn’t a reliable indicator of a lack of equality. Equality enables everyone equally, it doesn’t provide equally for everyone.
- atchoo 5y ago
  Inequality leads to inequity. Inequity leads to inequality. For wealth inequality the hair-splitting difference between equity and equality is a matter of the time frame you are looking at. As for Crypto gains being an equal opportunity - no, not in the least - access to capital to invest in crypto schemes is not equal. Even if everyone had equal access to capital, we would still be talking about the equality of restructuring economies to wildly benefit a minority who gambled and got lucky. Should a single currency gamble "win", it will be in no small part due to heavily invested and politically powerful people making that happen.
  - Nevermark 5y ago
    Some inequity is from chance, but of significant inequity comes from many other reasons People pursue very different paths in life. People dedicate themselves to the paths they do take with varying degrees of effort, thought, etc. Inequity is going to always be the result. Enforced equity has (so far) simply enabled enforcers to create inequity in there favor. I think it is a mistake to treat all inequity as “the” problem. Because it isn’t, and because that distracts from solving problems that can be solved. (To a higher degree.)
    - cuteboy19 5y ago
      That's fine, but this is not a good reason why your specific MLM should be the one that takes over the world and not the other 9000.
loceng 5y ago
While trying to not regularly call the majority of cryptocurrencies (the term currency misappropriated) an MLM-Ponzi scheme, I've started to realize that an easier or perhaps better way to state the problem with them is to use one of the key values that is virtue signalled against them: it's claimed that Bitcoin et al are anti-inflation, when in fact the inflation is just built into it - and only benefit the early/earlier adopters, the burden of inflation otherwise being shifted and weighted away from the earlier adopters towards the latest adopters. The crypto holders not only would love if the whole world switched but they actually depend on it to realize their profits, and for the latest adopters to not be left holding the bag, which at least the last 50% of adopters will be holding some portion of the bag/losses before and once it collapses; the wealth transfer will already have happened to the early adopters, and so whether the "community" or army of HODLers pity themselves and keep dabbling in it to keep their dream alive or not, will be interesting to watch at least, perhaps if it's not too embarrassing for the majority; the ones who exited with millions to $100s of millions, at least some of them of course will proudly showoff their gains by being in the MLM-Ponzi scheme(s) early - not being shameful of the unknown harm and losses their gains caused others and society as a whole. A lesson, to say the least. But the above is why those of us who see what Bitcoin et al are for what they are need to take a stand because regulatory/systems and policy capture will happen and is attempting to happen, perhaps the most extreme example of this so far being El Salvador - where their current "elected" leader at one point brought in military with guns into their parliament to threaten their parliament if they didn't adopt whatever he is/was gunning for; then you have a government/organization that's shown an example of what they're willing to do wanting to then influence the rest of the world (by whatever nefarious/violent means they may be so inclined to do) in order for a global-decentralized financial database to be required to be used, to then realize their gains, which richness wise, if they succeeded at getting the world to adopt - would make them as relative early adopters, very rich indeed - at least those in government who actually control the keys to their kingdom's crypto vault. Once I saw a significant portion of the mainstream VC-finance industrial complex buy into it, arguably heavily lead by USV with their Coinbase and other ecosystem investments - gaps they knew someone would have to fill, including funding a crypto lobbyist organization, then I knew things would get too serious to ignore. The solution however simply seems to be thoroughly educate the population so they understand the mechanisms - as most of what they will have seen or heard about is easily considered propaganda to hype up to sell more of whatever flavour of MLM-Ponzi scheme they can convince/trick you into buying. Edit to add: Forgot to link to article re: "Heavily-armed police and soldiers enter El Salvador parliament" - https://www.bbc.com/news/world-latin-america-51439020 https://www.bbc.com/news/world-latin-america-51439020
imtringued 5y ago
The aristocracy loved gold because it was money for the elites. Farmers in the US hated it, because it was money for the elites. Honestly, the arguments are basically the same as the gold bugs and the motivation is the same. People are invested in gold so they want it to succeed even at the expense of other people. Same with cryptocurrency.

bombcar 5y ago

Pretending a system that has specific names for various scams will somehow reduce inequality is hilarious. I feel people think “if everyone had bought Bitcoin when it was cheap, everyone would be rich now” and then think that Safemoon rugpull #42053 will somehow do it.

______-_-______ 5y ago
- rvz 5y ago
  Not sure why you are downvoted since here on HN, a bad egg soils the bunch. The logic with them is as follows with an example of a fallacy with cars and the environment: 'The majority of cars worldwide are not electric. They are all petrol and diesel cars. That means that ALL cars are bad for the environment and that will not change and thus should be all banned.' Not all cryptocurrency projects are scams, just like not all cars are burning up the planet. The absolutism towards whether if all cryptocurrency projects will go away due to a 'bUnCH OF Scam PrOjEctS' or 'it's ALl a scAm™' is just as silly as suggesting that all cryptocurrency projects are guaranteed to survive, 'becAuse iT is the FutURE, bRO™' or 'JUst WaiT fOr ThIs PrOJEct ReAL sooN™'. I'll tell you that both extremes are incorrect. That is even before accounting for regulations getting involved.
  - throwaway82652 5y ago
    - idiotsecant 5y ago
      >they're all built on the idea of creating a fake, unregulated private money out of nothing and then getting people to pay increasing prices for it. As opposed to our current financial system which is built on the idea of creating real (except when we reeeeally want some extra money, in which case we just make some more), regulated (unless your regulated activity is conducted by an entity that is sufficiently rich or powerful) money and then control a global hegemony with it. Crypto is not a solution to every problem and it definitely makes some new ones, but it sure would make for an interesting redistribution of power. I think there reaches a point where the levers of the modern currency system are much, much too attractive for human governments to be trusted with.
      - throwaway82652 5y ago
        >As opposed to our current financial system No that's not what I was saying and this is one of the most terrible things about any cryptocurrency discussion. People can't seem to avoid viewing it as something "opposed" to any current financial system, when that's not true. Cryptocurrency at best is the same as the current financial system and that's a huge stretch if you can somehow avoid all the negative externalities created by the insistence on using blockchains. So I would really suggest you avoid this angle when talking about this. Yes, all money is technically "fake". The difference is that real currencies that function as currencies are backed by some kind of real productive human activity to sustain that thing. Cryptocurrency by definition is not this, and it never can be unless you discard the fundamental concepts of it. >but it sure would make for an interesting redistribution of power. No not really. If you define "interesting" as something unpredictable and dramatic, then it would be more interesting to have the government raise tax rates to 99% and then randomly redistribute the proceeds via lottery. But nobody wants to talk about that because it doesn't require any kind of tech solutionism like cryptocurrency does. And also it would just be awful for most people. But hey, if you just want to convince some rich people to voluntarily pool their money into a trust that then redistributes it via lottery, you might as skip straight to that and avoid all the cryptocurrency shenanigans.
- throwaway82652 5y ago
  >Are you saying if an industry has any bad parts, it can't have any good parts? Cryptocurrency is not an industry and doesn't have any good parts. The technology itself is useless and universally bad for any practical purpose. It solves no problems, it only creates them. The "good things" done by companies using cryptocurrency are in spite of the technology, not because of it. Some companies don't even seem to bother with this though, and I'll call those out specifically. I would also call out a virus-scanning company if we found out they were secretly developing and deploying the viruses on the side and then selling the solution to increase their own profits. The same thing is happening here with a lot of blockchain products except they aren't even trying to keep it a secret what they're doing.

Nevermark 5y ago

Are you distinguishing equality & inequity? As I understand it, “equality” in a society refers to people’s equal access and treatment in some aspect of society (health, education, financial, legal, …) Whereas “inequity” in a society refers to different outcomes for people (billionaires vs the indebted unemployed, for instance). Outside of scams and fraudulent or deceptive launches, crypto seems to be very equality supportive to me. That it has magnified inequity isn’t a reliable indicator of a lack of equality. Equality enables everyone equally, it doesn’t provide equally for everyone.

atchoo 5y ago
Inequality leads to inequity. Inequity leads to inequality. For wealth inequality the hair-splitting difference between equity and equality is a matter of the time frame you are looking at. As for Crypto gains being an equal opportunity - no, not in the least - access to capital to invest in crypto schemes is not equal. Even if everyone had equal access to capital, we would still be talking about the equality of restructuring economies to wildly benefit a minority who gambled and got lucky. Should a single currency gamble "win", it will be in no small part due to heavily invested and politically powerful people making that happen.
- Nevermark 5y ago
  Some inequity is from chance, but of significant inequity comes from many other reasons People pursue very different paths in life. People dedicate themselves to the paths they do take with varying degrees of effort, thought, etc. Inequity is going to always be the result. Enforced equity has (so far) simply enabled enforcers to create inequity in there favor. I think it is a mistake to treat all inequity as “the” problem. Because it isn’t, and because that distracts from solving problems that can be solved. (To a higher degree.)
  - cuteboy19 5y ago
    That's fine, but this is not a good reason why your specific MLM should be the one that takes over the world and not the other 9000.

loceng 5y ago

While trying to not regularly call the majority of cryptocurrencies (the term currency misappropriated) an MLM-Ponzi scheme, I've started to realize that an easier or perhaps better way to state the problem with them is to use one of the key values that is virtue signalled against them: it's claimed that Bitcoin et al are anti-inflation, when in fact the inflation is just built into it - and only benefit the early/earlier adopters, the burden of inflation otherwise being shifted and weighted away from the earlier adopters towards the latest adopters. The crypto holders not only would love if the whole world switched but they actually depend on it to realize their profits, and for the latest adopters to not be left holding the bag, which at least the last 50% of adopters will be holding some portion of the bag/losses before and once it collapses; the wealth transfer will already have happened to the early adopters, and so whether the "community" or army of HODLers pity themselves and keep dabbling in it to keep their dream alive or not, will be interesting to watch at least, perhaps if it's not too embarrassing for the majority; the ones who exited with millions to $100s of millions, at least some of them of course will proudly showoff their gains by being in the MLM-Ponzi scheme(s) early - not being shameful of the unknown harm and losses their gains caused others and society as a whole. A lesson, to say the least. But the above is why those of us who see what Bitcoin et al are for what they are need to take a stand because regulatory/systems and policy capture will happen and is attempting to happen, perhaps the most extreme example of this so far being El Salvador - where their current "elected" leader at one point brought in military with guns into their parliament to threaten their parliament if they didn't adopt whatever he is/was gunning for; then you have a government/organization that's shown an example of what they're willing to do wanting to then influence the rest of the world (by whatever nefarious/violent means they may be so inclined to do) in order for a global-decentralized financial database to be required to be used, to then realize their gains, which richness wise, if they succeeded at getting the world to adopt - would make them as relative early adopters, very rich indeed - at least those in government who actually control the keys to their kingdom's crypto vault. Once I saw a significant portion of the mainstream VC-finance industrial complex buy into it, arguably heavily lead by USV with their Coinbase and other ecosystem investments - gaps they knew someone would have to fill, including funding a crypto lobbyist organization, then I knew things would get too serious to ignore. The solution however simply seems to be thoroughly educate the population so they understand the mechanisms - as most of what they will have seen or heard about is easily considered propaganda to hype up to sell more of whatever flavour of MLM-Ponzi scheme they can convince/trick you into buying. Edit to add: Forgot to link to article re: "Heavily-armed police and soldiers enter El Salvador parliament" - https://www.bbc.com/news/world-latin-america-51439020 https://www.bbc.com/news/world-latin-america-51439020

imtringued 5y ago

The aristocracy loved gold because it was money for the elites. Farmers in the US hated it, because it was money for the elites. Honestly, the arguments are basically the same as the gold bugs and the motivation is the same. People are invested in gold so they want it to succeed even at the expense of other people. Same with cryptocurrency.