Re:IMF Head Foresees the End of Banking and the Triumph of C...
by notahacker on Monday October 02, 2017 @11:24AM
(#15384492)
A large share of an asset which appreciates over time is a permanent ongoing reward. The effect of a conventional fractional reserve currency is the opposite; inflation erodes the value of currency holdings unless they're directly or indirectly invested in producing stuff
(Sure, who has access to what investment opportunities isn't even and nor is the initial distribution of wealth, but cryptocurrency doesn't attempt to solve that problem)
Re:IMF Head Foresees the End of Banking and the Triumph of C...
by nosuchthing on Monday October 02, 2017 @11:21AM
(#15384471)
In economics, the Gini coefficient is the standard measure
of how inequitable a society is. This is tricky to
determine for Bitcoin, as it's not quiet a "society" in
the Gini sense, one person may have multiple addresses and
many addresses have been used only once or a few times.
(The commonly-cited figure of 0.88 is based on one small
exchange in 2011.) However, a Citigroup analysis from
early 2014 notes: "47 individuals hold about 30 percent,
another 900 a further 20 percent, the next 10,000 about
25% and another million about 20%"; and distribution
"looks much like the distribution of wealth in North Korea
and makes China's and even the US' wealth distribution
look like that of a workers' paradise
Dorit Ron and Adi Shamir found in a 2012 study that only
22% of then-existing Bitcoins were in circulation at all,
there were a total of 75 active users or businesses with
any kind of volume, one (unidentified) user owned a
quarter of all Bitcoins in existence, and one large owner
was trying to hide their pile by moving it around in
thousands of smaller transactions. (Shamir is one of the
most renowned cryptographers in the world and the "S" in
"RSA encryption")"
[1] "Attack of the 50 Foot Blockchain"
via https://news.ycombinator.com/user?id=davidgerard
I'd rather have transparency and one-time benefit to a select few than a permanent, secretive benefit.
The US federal reserve system works pretty well and I don't really have a huge problem with it. My point is simply that the downsides to cryptocurrencies you rightly highlight have to be viewed in context of the current alternatives.