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> Who, we ask, is so altruistic as to create a new monetary system but not use it to enrich themselves? Bitcoin's supply schedule, in which half of all Bitcoin

by tromp 3y ago

> Who, we ask, is so altruistic as to create a new monetary system but not use it to enrich themselves? Bitcoin's supply schedule, in which half of all Bitcoin is mined in the first four years, guaranteed a Bitcoin wealth concentration on the early miners, especially considering how few there were. At long intervals, Satoshi would be the only one, mining on his laptop. A truly altruistic system would not confer such a huge advantage on early miners, for example by fixing the block reward. Then each generation would be able to mine the same amount of bitcoin, instead of each next generation getting 32x less than the current one. Such a steady supply would also make Bitcoin much less the vehicle for speculation that it has turned into. Of course, then the supply wouldn't have a finite cap, it would be limited by time only. Still, that would already make it very different from fiat, with the yearly supply inflation rate going down steadily toward 0 (known as being dis-inflationary). Eventually, the supply rate would more or less balance the inevitable coin loss rate [1]. [1] https://john-tromp.medium.com/a-case-for-using-soft-total-supply-1169a188d153 https://john-tromp.medium.com/a-case-for-using-soft-total-su...

toenail 3y ago
> A truly altruistic system would not confer such a huge advantage on early miners Bitcoin never claimed to be and is not altruistic. And the same can be said about almost all investments, you need information early, you need to judge the information correctly, and you need to move in. Same with bitcoin.
- aniforprez 3y ago
  GP said nothing about bitcoin claiming to be anything. They're directly quoting the article
  - toenail 3y ago
    Your point being?
    - deleted 3y ago
      [deleted]
  - tvink 3y ago
    But they seem to translate a quote that posits someone would be altruistic to create a monetary system without enriching themselves, to "bitcoin is an altruistic system" and then shoot down that statement rather than what the quote is saying.
- gonehome 3y ago
  Plus rewarding early miners creative the incentive structure more likely to drive adoption.
  - Retric 3y ago
    Just the reverse, you discourage adoption by turning a currency into an investment. If bitcoins had constant or decreasing value through time then people would be more willing to trade them. This is why deflation is so economically dangerous. It did encourage mining, but that doesn’t driving long term adoption and has nearly purely negative consequences. The ideal long term strategy for adoption would have mining to provide a consistent reward in real terms over a long timeframe, low costs and high transaction volumes, and for unused accounts to be charged a small fee. Bitcoin failed all of those which is why it’s never had significant adoption as a currency.
    - toenail 3y ago
      > Bitcoin failed all of those which is why it’s never had significant adoption as a currency. Yet there is no more successful digital currency on the planet. If you think you can make one with "better" rules please go ahead! > This is why deflation is so economically dangerous. The idea that inflation and constant spending are the only thing that makes an economy work is faith-based, and bitcoin was intentionally not started that way. So far I'd say it has worked quite well.
      - Retric 3y ago
        > is faith based Back when people used precious metals for currency many different economies would all be tied to the same shifts in value. I don’t know all the details but there’s real world support for significant deflation being detrimental not just theory. That said trivial levels of deflation aren’t harmful, but bitcoin had very extreme deflation.
        toenail 3y ago
        Bitcoin has inflation at the moment. > I don’t know all the details but there’s real world support for significant deflation being detrimental not just theory. The problem is that the "real world support" is usually taken from fiat money economies that are entirely built on inflation, and for historical examples there usually was an economic crisis at the same time that was accompanied by deflation. It's hardly conclusive.
- infecto 3y ago
  Is bitcoin a currency or investment? I would say neither but interesting to see it getting lumped in with investments.
  - polygamous_bat 3y ago
    Bitcoin is Schrödinger’s asset, in the sense that it is whatever it needs to be to counter the latest criticisms from non-believers. For example, if you say that bitcoin has 7 tps and even with lightning will take decades to onboard everyone, it will become a store of value that you are supposed to buy and hold for long term. But if you point out how bitcoin has crazy volatility, it may become a currency that you don’t hold, just use to transact.
    - infecto 3y ago
      I am happy that you understood where I was going with this. People whip up whatever they need it to be to make an argument. Sometimes we call it a currency because we can use it to buy things, other times its an investment. To reliably fit in either of those buckets is exclusive. To be a currency you need to be a store of value that is not fluctuation a lot, this means its a terrible investment vehicle.
  - toenail 3y ago
    You're right, bitcoin is something entirely new, and we don't know the future, so we don't know what it will end up being.
    - paulryanrogers 3y ago
      Entirely new is a stretch. And haven't we reached the end? It's not broadly useful nor sustainable nor trustworthy.
      - almost_usual 3y ago
        I’d argue it’s useful for many people who live in countries that suffer from hyperinflation.
- kranke155 3y ago
  What about kids who weren’t able or had any capital to invest at the time Bitcoin was doing high returns ? They will just be born poor and die poor I suppose ?
  - toenail 3y ago
    Not sure why you expect bitcoin to do "high returns" for everybody, that was never a promise and never a goal. Are you going to argue that stocks are not fair because you personally didn't buy the stocks with the best returns? Bitcoin only makes one relevant promise: There will only be 21 million. And that means that the people who are born poor get a chance at building wealth by not having the government constantly reduce the value of their money. Bitcoin is an escape from the system that keeps people poor.
    - kjkjadksj 3y ago
      You could say as much for beanie babies too. They will be limited so therefore valuable. Forget a hundred years from now that people might not see any value at all in a plush doll, or some runescape gp, or bitcoin. Meanwhile, something like iron or gold has held value for all of human history.
      - toenail 3y ago
        Scarcity alone does not make something valuable, things that are useful have value. Happy to clear that up.
Beijinger 3y ago
> Who, we ask, is so altruistic as to create a new monetary system but not use it to enrich themselves? And take the fame. He also, as I mentioned before, may have been a candidate for the Noble prize in economics. https://www.newsbtc.com/news/bitcoin/bitcoin-creator-satoshi-nakamoto-nominated-nobel-prize/#:~:text=Satoshi%20Nakamoto%2C%20the%20creator%20of,California%20in%20the%20United%20States https://www.newsbtc.com/news/bitcoin/bitcoin-creator-satoshi.... I take it as a given, he is dead. He would be a candidate: https://en.wikipedia.org/wiki/Dave_Kleiman https://en.wikipedia.org/wiki/Dave_Kleiman
sMarsIntruder 3y ago
[flagged]
- zaphar 3y ago
  I am biased because I see a lot of value in the current fiat system that Bitcoin directly impacts. I am also biased because I don't buy the arguments that the current fiat system has enough issues to indicate it needs replacement. As an example, I am against any system that takes us back to a world where governments no longer are able to use the soft power of economics to react to other countries. The alternative being that they will need to result to hard power which means physical violence. The rest of the stuff like being a haven for criminals, grifters, and scam artists is related to but not really the cause for my bias.
  - toenail 3y ago
    > I don't buy the arguments that the current fiat system has enough issues to indicate it needs replacement. Said like somebody who never had a problem with the financial system and had access to banks for their entire life. It's great that money works for you, for most people on this planet the same can not be said. > where governments no longer are able to use the soft power of economics to react to other countries The idea that monetary policy is the only way to influence economics seems kind of absurd? You're surely not suggesting that removing fiat currencies would remove economics from the world of politics?
    - zaphar 3y ago
      Currency controls are the most effective mechanism we currently have. I don't see this idea as absurd at all.
      - toenail 3y ago
        Ok, your previous comment seemed to imply that the only alternative to monetary policy was violence/war, that sounded absurd. Now you seem to confuse currency controls with monetary policy? Anyway, maybe it would be a good idea to read about lists of economic policies to get a better view of the matter?
Geee 3y ago
Bitcoin needed maximum 'memeability' i.e. the idea had to spread as fast and wide as possible. That is why the 4 year halfing cycle and absolute scarcity was chosen. The 21 million cap is easy to understand and tell your friends about. The possibility of getting rich is the strongest meme. You really need to get someone rich in order for the meme to spread. This is the only way. People have a natural tendency to not be interested in currencies. Thinking about currencies makes their head ache. It needs to be really rewarding. On the other hand, there was no precedent and it was really risky. Most people were throwing away bitcoin at the start, and they just wanted it to spread. In Bitcoin the security depends on the price of the currency. If the price doesn't pick up, the network won't be secure enough. It has to be rewarding, it has to spread as an idea, it has to be secure. The more secure it is, the more plausible it is to succeed, and so forth. Most people don't really understand the disinflationary model as you explained, although I agree that in theory it is better and more elegant way to distribute coins. However, I think that if Bitcoin had chosen this model, it wouldn't have taken off. This model has too high inflation for too long, and the meme and security would have died off. If the inflation is too high for too long, the meme won't spread, and the price will stay very low or nearly zero. Then a single miner will mine all coins and no one buys them, or only a single rich dude buys them. So in the end the coins won't get distributed as widely / fairly and the project will fail. I think that Bitcoin succeeded in it's distribution as fairly as possible. I don't think that this can be replicated. It's impossible to create a new cryptocurrency where someone won't scoop them all off cheaply in the start, and that's why the creators typically own most of the coins, which will eventually doom the project. The infinite disinflationary model might be the only way to succeed in distributing a completely new currency, because no one wants to invest in it. But it has to have some other properties in order to spread widely.
fsmv 3y ago
I know it sounds bad to shill a coin but someone has made a small modification to the Bitcoin monetary policy to make the block reward proportional to difficulty and created a balanced system where the supply matches the demand to avoid deflation. Maybe you'd like to come chat with us about it on telegram! The website is https://ergon.moe https://ergon.moe Hopefully it's not as bad since there's no early adopter advantage and I don't expect to profit at all. I just want peer to peer electronic cash!
latchkey 3y ago
@tromp created Grincoin, which was mined and dumped from the start, eventually going to zero. https://www.reddit.com/r/grincoin/comments/kgsetd/grin_monetary_supply_article_by_jtromp/ https://www.reddit.com/r/grincoin/comments/kgsetd/grin_monet... https://coinmarketcap.com/currencies/grin/ https://coinmarketcap.com/currencies/grin/

by tromp 3y ago

toenail 3y ago

> A truly altruistic system would not confer such a huge advantage on early miners Bitcoin never claimed to be and is not altruistic. And the same can be said about almost all investments, you need information early, you need to judge the information correctly, and you need to move in. Same with bitcoin.

aniforprez 3y ago
GP said nothing about bitcoin claiming to be anything. They're directly quoting the article
- toenail 3y ago
  Your point being?
  - deleted 3y ago
    [deleted]
- tvink 3y ago
  But they seem to translate a quote that posits someone would be altruistic to create a monetary system without enriching themselves, to "bitcoin is an altruistic system" and then shoot down that statement rather than what the quote is saying.
gonehome 3y ago
Plus rewarding early miners creative the incentive structure more likely to drive adoption.
- Retric 3y ago
  Just the reverse, you discourage adoption by turning a currency into an investment. If bitcoins had constant or decreasing value through time then people would be more willing to trade them. This is why deflation is so economically dangerous. It did encourage mining, but that doesn’t driving long term adoption and has nearly purely negative consequences. The ideal long term strategy for adoption would have mining to provide a consistent reward in real terms over a long timeframe, low costs and high transaction volumes, and for unused accounts to be charged a small fee. Bitcoin failed all of those which is why it’s never had significant adoption as a currency.
  - toenail 3y ago
    > Bitcoin failed all of those which is why it’s never had significant adoption as a currency. Yet there is no more successful digital currency on the planet. If you think you can make one with "better" rules please go ahead! > This is why deflation is so economically dangerous. The idea that inflation and constant spending are the only thing that makes an economy work is faith-based, and bitcoin was intentionally not started that way. So far I'd say it has worked quite well.
    - Retric 3y ago
      > is faith based Back when people used precious metals for currency many different economies would all be tied to the same shifts in value. I don’t know all the details but there’s real world support for significant deflation being detrimental not just theory. That said trivial levels of deflation aren’t harmful, but bitcoin had very extreme deflation.
      - toenail 3y ago
        Bitcoin has inflation at the moment. > I don’t know all the details but there’s real world support for significant deflation being detrimental not just theory. The problem is that the "real world support" is usually taken from fiat money economies that are entirely built on inflation, and for historical examples there usually was an economic crisis at the same time that was accompanied by deflation. It's hardly conclusive.
infecto 3y ago
Is bitcoin a currency or investment? I would say neither but interesting to see it getting lumped in with investments.
- polygamous_bat 3y ago
  Bitcoin is Schrödinger’s asset, in the sense that it is whatever it needs to be to counter the latest criticisms from non-believers. For example, if you say that bitcoin has 7 tps and even with lightning will take decades to onboard everyone, it will become a store of value that you are supposed to buy and hold for long term. But if you point out how bitcoin has crazy volatility, it may become a currency that you don’t hold, just use to transact.
  - infecto 3y ago
    I am happy that you understood where I was going with this. People whip up whatever they need it to be to make an argument. Sometimes we call it a currency because we can use it to buy things, other times its an investment. To reliably fit in either of those buckets is exclusive. To be a currency you need to be a store of value that is not fluctuation a lot, this means its a terrible investment vehicle.
- toenail 3y ago
  You're right, bitcoin is something entirely new, and we don't know the future, so we don't know what it will end up being.
  - paulryanrogers 3y ago
    Entirely new is a stretch. And haven't we reached the end? It's not broadly useful nor sustainable nor trustworthy.
    - almost_usual 3y ago
      I’d argue it’s useful for many people who live in countries that suffer from hyperinflation.
kranke155 3y ago
What about kids who weren’t able or had any capital to invest at the time Bitcoin was doing high returns ? They will just be born poor and die poor I suppose ?
- toenail 3y ago
  Not sure why you expect bitcoin to do "high returns" for everybody, that was never a promise and never a goal. Are you going to argue that stocks are not fair because you personally didn't buy the stocks with the best returns? Bitcoin only makes one relevant promise: There will only be 21 million. And that means that the people who are born poor get a chance at building wealth by not having the government constantly reduce the value of their money. Bitcoin is an escape from the system that keeps people poor.
  - kjkjadksj 3y ago
    You could say as much for beanie babies too. They will be limited so therefore valuable. Forget a hundred years from now that people might not see any value at all in a plush doll, or some runescape gp, or bitcoin. Meanwhile, something like iron or gold has held value for all of human history.
    - toenail 3y ago
      Scarcity alone does not make something valuable, things that are useful have value. Happy to clear that up.

Beijinger 3y ago

> Who, we ask, is so altruistic as to create a new monetary system but not use it to enrich themselves? And take the fame. He also, as I mentioned before, may have been a candidate for the Noble prize in economics. https://www.newsbtc.com/news/bitcoin/bitcoin-creator-satoshi-nakamoto-nominated-nobel-prize/#:~:text=Satoshi%20Nakamoto%2C%20the%20creator%20of,California%20in%20the%20United%20States https://www.newsbtc.com/news/bitcoin/bitcoin-creator-satoshi.... I take it as a given, he is dead. He would be a candidate: https://en.wikipedia.org/wiki/Dave_Kleiman https://en.wikipedia.org/wiki/Dave_Kleiman

sMarsIntruder 3y ago

[flagged]

zaphar 3y ago
I am biased because I see a lot of value in the current fiat system that Bitcoin directly impacts. I am also biased because I don't buy the arguments that the current fiat system has enough issues to indicate it needs replacement. As an example, I am against any system that takes us back to a world where governments no longer are able to use the soft power of economics to react to other countries. The alternative being that they will need to result to hard power which means physical violence. The rest of the stuff like being a haven for criminals, grifters, and scam artists is related to but not really the cause for my bias.
- toenail 3y ago
  > I don't buy the arguments that the current fiat system has enough issues to indicate it needs replacement. Said like somebody who never had a problem with the financial system and had access to banks for their entire life. It's great that money works for you, for most people on this planet the same can not be said. > where governments no longer are able to use the soft power of economics to react to other countries The idea that monetary policy is the only way to influence economics seems kind of absurd? You're surely not suggesting that removing fiat currencies would remove economics from the world of politics?
  - zaphar 3y ago
    Currency controls are the most effective mechanism we currently have. I don't see this idea as absurd at all.
    - toenail 3y ago
      Ok, your previous comment seemed to imply that the only alternative to monetary policy was violence/war, that sounded absurd. Now you seem to confuse currency controls with monetary policy? Anyway, maybe it would be a good idea to read about lists of economic policies to get a better view of the matter?

Geee 3y ago

Bitcoin needed maximum 'memeability' i.e. the idea had to spread as fast and wide as possible. That is why the 4 year halfing cycle and absolute scarcity was chosen. The 21 million cap is easy to understand and tell your friends about. The possibility of getting rich is the strongest meme. You really need to get someone rich in order for the meme to spread. This is the only way. People have a natural tendency to not be interested in currencies. Thinking about currencies makes their head ache. It needs to be really rewarding. On the other hand, there was no precedent and it was really risky. Most people were throwing away bitcoin at the start, and they just wanted it to spread. In Bitcoin the security depends on the price of the currency. If the price doesn't pick up, the network won't be secure enough. It has to be rewarding, it has to spread as an idea, it has to be secure. The more secure it is, the more plausible it is to succeed, and so forth. Most people don't really understand the disinflationary model as you explained, although I agree that in theory it is better and more elegant way to distribute coins. However, I think that if Bitcoin had chosen this model, it wouldn't have taken off. This model has too high inflation for too long, and the meme and security would have died off. If the inflation is too high for too long, the meme won't spread, and the price will stay very low or nearly zero. Then a single miner will mine all coins and no one buys them, or only a single rich dude buys them. So in the end the coins won't get distributed as widely / fairly and the project will fail. I think that Bitcoin succeeded in it's distribution as fairly as possible. I don't think that this can be replicated. It's impossible to create a new cryptocurrency where someone won't scoop them all off cheaply in the start, and that's why the creators typically own most of the coins, which will eventually doom the project. The infinite disinflationary model might be the only way to succeed in distributing a completely new currency, because no one wants to invest in it. But it has to have some other properties in order to spread widely.

fsmv 3y ago

I know it sounds bad to shill a coin but someone has made a small modification to the Bitcoin monetary policy to make the block reward proportional to difficulty and created a balanced system where the supply matches the demand to avoid deflation. Maybe you'd like to come chat with us about it on telegram! The website is https://ergon.moe https://ergon.moe Hopefully it's not as bad since there's no early adopter advantage and I don't expect to profit at all. I just want peer to peer electronic cash!

latchkey 3y ago

@tromp created Grincoin, which was mined and dumped from the start, eventually going to zero. https://www.reddit.com/r/grincoin/comments/kgsetd/grin_monetary_supply_article_by_jtromp/ https://www.reddit.com/r/grincoin/comments/kgsetd/grin_monet... https://coinmarketcap.com/currencies/grin/ https://coinmarketcap.com/currencies/grin/