7 ms·

No production curve can ever be "fair". If you imagine that one day every living person has equal amount of bitcoins, they will be very quickly redistributed fr

No production curve can ever be "fair". If you imagine that one day every living person has equal amount of bitcoins, they will be very quickly redistributed from those who doesn't care to those who do for a relatively small price. And then, when the network becomes more stable and useful, those who have sold their fair share early will whine again about being unfair distribution. Second: even if a lot of bitcoins are initially belong to a single person, it poses no problem. Either you hold money that nobody needs (value is very low), either you hold money that people a willing to buy from you and every day you are not selling them, your opportunity cost rises. In other words, it's entirely possible to create inflationary effect by stashing 50% of money and then suddenly selling them out. But the imaginable effect is very limited: 1. The longer you keep the money, the longer you bear the risk of uncertainty. If your bitcoins today are worth 100K USD, there is no guarantee they will be work 1M USD next month. This creates an incentive to sell earlier. 2. Each successive act of selling naturally lowers the price as supply is increased. So if you start selling your stash, the remaining part will be worth less (or will grow in value slower and slower) 3. Generally, you cannot sell in bulk. If people are trading 1 BTC for 10 USD, it does not mean that somebody will buy 1000 BTC for 10000 USD. There necessarily be a discount or simply nobody will spend 10K USD at once. This returns us to points #1 and #2. So even if Satoshi had a lot of bitcoins initially, he has either sold significant part of them already, or will be able to "disturb" the market by selling them at once only to his own great expense.

lmm 14y ago
>No production curve can ever be "fair". If you imagine that one day every living person has equal amount of bitcoins, they will be very quickly redistributed from those who doesn't care to those who do for a relatively small price. And then, when the network becomes more stable and useful, those who have sold their fair share early will whine again about being unfair distribution. I said "fairer", not "fair". While there is no perfectly fair distribution curve, the deflationary one bitcoin uses is far worse than any other currency in existence. The very concept of one individual owning 1/4 of the entire world's supply of dollars or gold or even sea shells is absurd, because such an individual would have to be ridiculously, obscenely wealthy. If you want a practical suggestion, simply removing the exponential halving would make a far fairer curve. People would then obtain wealth proportional to how long they'd cared about bitcoins (assuming that investments and computing power grow at approximately the same rate). >Second: even if a lot of bitcoins are initially belong to a single person, it poses no problem. Either you hold money that nobody needs (value is very low), either you hold money that people a willing to buy from you and every day you are not selling them, your opportunity cost rises. >1. The longer you keep the money, the longer you bear the risk of uncertainty. If your bitcoins today are worth 100K USD, there is no guarantee they will be work 1M USD next month. This creates an incentive to sell earlier. But they're inherently deflationary, so actually you gain money the longer you hold them. If you have 4 million bitcoins now, you can guarantee that you will always have at least 5% of the entire bitcoin economy, and economies generally grow. >2. Each successive act of selling naturally lowers the price as supply is increased. So if you start selling your stash, the remaining part will be worth less (or will grow in value slower and slower) >3. Generally, you cannot sell in bulk. If people are trading 1 BTC for 10 USD, it does not mean that somebody will buy 1000 BTC for 10000 USD. There necessarily be a discount or simply nobody will spend 10K USD at once. This returns us to points #1 and #2. Sure, you'd have to ration them out over time and not spend them all at once, like an arab prince who owns millions of barrels of oil. Doesn't make you any less wealthy, just means your assets are not entirely liquid. >So even if Satoshi had a lot of bitcoins initially, he has either sold significant part of them already, or will be able to "disturb" the market by selling them at once only to his own great expense. I'm not worried about him disturbing the market. I'm worried about concentrating an enormous amount of wealth in his hands. You can say he and other early adopters deserve some profit from creating the system, and I'll agree with you. But 1/2 of the entire future economy being concentrated in the hands of so few is ridiculous.
- jl6 14y ago
  If Bitcoin becomes the currency of the entire future economy, the initial distribution method will have been proved to be a non-issue. More likely, Bitcoin will be one currency amongst many, and the early adopters will sell their windfall gradually according to supply and demand.

lmm 14y ago

>No production curve can ever be "fair". If you imagine that one day every living person has equal amount of bitcoins, they will be very quickly redistributed from those who doesn't care to those who do for a relatively small price. And then, when the network becomes more stable and useful, those who have sold their fair share early will whine again about being unfair distribution. I said "fairer", not "fair". While there is no perfectly fair distribution curve, the deflationary one bitcoin uses is far worse than any other currency in existence. The very concept of one individual owning 1/4 of the entire world's supply of dollars or gold or even sea shells is absurd, because such an individual would have to be ridiculously, obscenely wealthy. If you want a practical suggestion, simply removing the exponential halving would make a far fairer curve. People would then obtain wealth proportional to how long they'd cared about bitcoins (assuming that investments and computing power grow at approximately the same rate). >Second: even if a lot of bitcoins are initially belong to a single person, it poses no problem. Either you hold money that nobody needs (value is very low), either you hold money that people a willing to buy from you and every day you are not selling them, your opportunity cost rises. >1. The longer you keep the money, the longer you bear the risk of uncertainty. If your bitcoins today are worth 100K USD, there is no guarantee they will be work 1M USD next month. This creates an incentive to sell earlier. But they're inherently deflationary, so actually you gain money the longer you hold them. If you have 4 million bitcoins now, you can guarantee that you will always have at least 5% of the entire bitcoin economy, and economies generally grow. >2. Each successive act of selling naturally lowers the price as supply is increased. So if you start selling your stash, the remaining part will be worth less (or will grow in value slower and slower) >3. Generally, you cannot sell in bulk. If people are trading 1 BTC for 10 USD, it does not mean that somebody will buy 1000 BTC for 10000 USD. There necessarily be a discount or simply nobody will spend 10K USD at once. This returns us to points #1 and #2. Sure, you'd have to ration them out over time and not spend them all at once, like an arab prince who owns millions of barrels of oil. Doesn't make you any less wealthy, just means your assets are not entirely liquid. >So even if Satoshi had a lot of bitcoins initially, he has either sold significant part of them already, or will be able to "disturb" the market by selling them at once only to his own great expense. I'm not worried about him disturbing the market. I'm worried about concentrating an enormous amount of wealth in his hands. You can say he and other early adopters deserve some profit from creating the system, and I'll agree with you. But 1/2 of the entire future economy being concentrated in the hands of so few is ridiculous.

jl6 14y ago
If Bitcoin becomes the currency of the entire future economy, the initial distribution method will have been proved to be a non-issue. More likely, Bitcoin will be one currency amongst many, and the early adopters will sell their windfall gradually according to supply and demand.