I think you're missing the point. I think what OP is saying is that the nature of a deflationary, speculative asset means that a cult-like environment will organically form around it. Early adopters have a strong incentive to hype it up and get others to buy in to increase their own wealth. And Bitcoin was designed to be a deflationary, speculative asset.
Bitcoin is currently issuing at 1.5% and will continue to issue for basically a hundred years. People are really confident that the /deflationary/ nature is the key to their critique, but I don't see how.
The incentives for you being early into a system that will acquire a lot of users down the road (which is what you are betting on) are significantly more impactful to you financially then 2% inflation. For this reason, crypto currencies that do. not have a limited supply narrative are equally as volatile.
I'll have to disagree there, go take a look at Satoshi's net worth. I'm honestly amazed the crypto community hasn't come out unilaterally against the concept of premining and ICOs because if it works the way it's supposed to, there is no way it won't end up as a scam where the founders of the token end up staying richer than everyone else. I mean we've seen this over and over again.
Now, the end effect is still similar: the early adopters got the lion's share of the coins and the 'cult of bitcoin' is trying to lure in greater fools so that they can cash out, but I think that Satoshi's motives weren't greed. They had a clever idea (however flawed the economics were) and implemented it. Everything snowballed from there.
Perhaps Satoshi was appalled by what they had created, and that's why they've disappeared?
I'm sorry but this is a bogus statement. I can't stand when people say this, it's an empty statement, it's like saying "anyone could have founded Amazon". Yeah maybe that's technically true but it didn't happen and the chances of it happening to anyone else were extremely small. The basic facts are this:
- most people are not ever going to become miners, anyone launching a cryptocurrency knows this full well
- bitcoin was designed to make mining harder and harder over time, making it much easier for early adopters to mine
- bitcoin was designed to be deflationary
Combine those things, and you get a system where the founders and early adopters are practically guaranteed to gain more wealth than everyone else, like to the point of ridiculous imbalance. And if you have an unpopular token in the beginning it's the same thing as a premine. I don't think this is exactly controversial to point out that bitcoin was designed to multiply the wealth of the HODLers, that's the only reason anyone still cares about it.
It's true. The software was freely available. Anyone could have run it at the start. Back then, you didn't need specialised hardware. That's a far cry from founding and running a company, I don't understand how this even compares to Amazon (and anyway, Amazon does useful things!)
Now, there's a huge world of difference between saying anyone could have mined bitcoin at the beginning, and everyone could have mined bitcoin at the beginning. As I said, and you seem to agree with, the economics hugely favour the early adopters.
> Yeah maybe that's technically true but it didn't happen and the chances of it happening to anyone else were extremely small.
It's not a question of chance, it was simply a matter of running some software, and being there first.
> you get a system where the founders and early adopters are practically guaranteed to gain more wealth than everyone else, like to the point of ridiculous imbalance
We're in complete agreement here. But back then, no-one seriously thought bitcoins would be valued in the thousands of dollars. I doubt Satoshi released bitcoin and sat back thinking "now I'll become a billionaire".
Now, everyone is into cryptocoins for the money (hence all the identikit coins out there)
I wonder how bitcoin would have fared had it not been released with the deflationary logic built in. I suspect it would have been pretty similar. Ethereum has no cap on coins, other than a built-in 'difficulty bomb' that the developers repeatedly keep delaying...
And yet many people were still not there, because you have to be a super nerd to even care about this stuff to begin with, never mind go through the bother of:
- Figuring out what "mining" actually is and why you should care
- Correctly running some random unproven open source code to do it
- Manage the wallet and figure out how to actually trade with somebody else
- Follow all the other super nerds who are doing this to make sure you're not doing it wrong
It goes on and on here, none of this stuff is obvious to people who weren't already familiar with what was going on here and had enough obscure cryptography knowledge to understand what anybody was even talking about. And it's still not obvious, most people "investing" in crypto still have no idea about any of this stuff. I'm not particularly interested in commenting on the founder's intent because it doesn't matter much here. The outcome is still going to be the same.
>I wonder how bitcoin would have fared had it not been released with the deflationary logic built in. I suspect it would have been pretty similar.
Well yes, because basically every other cryptocurrency including ETH still favors the HODLers for a lot of other reasons.
No they couldn't? At bare minimum: A lot of people were babies or were not even born yet when Amazon was founded. A lot of people were not in the financial position to go do a startup in the 90s. A lot of people did not have computer science or business skills at that time (and still don't). A lot of people just did not ever care about buying and selling books online. I'm sure you can think of a lot more examples here.
And if Amazon was trying to push a new AmazonBucks cryptocurrency as the new global currency with Jeff Bezos holding a large percentage of them, then yes I would probably call it a scam. Remember when Facebook basically tried to do that a few years ago?
By designing half of all bitcoins to be emitted in just the first 4 years, they ensured that early miners like Satoshi would end up with a large slice of the pie.
Those who came relatively shortly after that... Yeah, I saw enough those who were there to be the next plutocracy...
What you need to realize is that the bitcoin community != the crypto community.
Bitcoin was not premined and did not have an ICO.
It's weird to talk about "Satoshi's net worth." Satoshi may not have been a single person, may be dead, and anyway, it doesn't look like those coins will ever be spent, so if Satoshi is alive, he hasn't profited financially from the coins he mined and is presumably living a poor or middle-class life, unless he happened to be independently wealthy before---but we'll probably never know.
Of course, if you can trace the coins’ motion, cashing in may break anonymity too, so maybe they need to sit there like the money bag in Get Shorty.
>Satoshi may not have been a single person, may be dead, and anyway, it doesn't look like those coins will ever be spent
I hope you can also see how this is precarious and irresponsible of the bitcoin community to allow this situation to continue, you just have to hope that this anonymous and unaccountable billionaire (or group of billionaires) is dead or benevolent, because if they aren't they could seriously screw up the network.
But you're barking up the wrong tree here. Bitcoin is one of incredibly few cryptoassets with no premine. I hesitate to say only because I don't keep track of the myriad uninteresting derivatives. You could have been Hal Finney or someone else as equally receptive and enthusiastic on the open mailing list right from the outset.
After that date the blocks Satoshi produced, as a requirement to process and validate transactions to bootstrap the network were simply mined not pre-mined, in a manner open to all.
They could indeed transact in the future. Although I suspect at this juncture should that ever occur it would be to make a political statement since I find people of that intellectual bent tend to be poorly motivated by base material wants. Anyhow, that's pointless gossipy speculation.
My point remains the same for questioning the intent of the founders. We have no idea what Satoshi might do with the power he has in the form of early blocks.
"Many people say" this because they aren't the ones with the power. That's all. That's the parent's point. It's not changing the system, it's just changing the owners of the system. What's that lyric..."Meet the new boss same as the old boss"
No, they are saying it because they believe it. To use my prior example, they think it's better to transform the kind of power Dick Cheney or Bernie Sanders or Donald Trump could have, into the kind of power Bill Gates or Warren Buffett or Jeff Bezos could have. That makes a lot of sense.
You can just accuse anyone you disagree with of being a hypocrite, but that's straw-manning them when you should be steel-manning them. You don't win arguments with the tactic you're using, and you don't win hearts and minds. You also don't win when you're just plain wrong, as you are in this case.
> You can just accuse anyone you disagree with of being a hypocrite, but that's straw-manning them when you should be steel-manning them.
(1) Where did I call people hypocrites?
> You don't win arguments with the tactic you're using, and you don't win hearts and minds.
(2) You don't get in engage in civil discourse with people by saying things like "you're wrong" and "I'm definitely not missing the point."
> You also don't win when you're just plain wrong, as you are in this case.
(3) Telling people that "you're right and they are wrong" is something my 6 year old cousin does on the playground.
You're literally saying that here that everyone who makes the argument that bitcoin creates a positive transformation of power---which is at least tens of thousands of people---is only pretending to believe that because they want to transfer power to themselves. You are calling them all hypocrites. And I know that's wrong, because I know lots of people who actually believe this, including myself. Your argument here is not even an argument; it's not even remotely, distantly believable.
Now, I suspect you don't understand your comment the way I do, which is why I'm taking the time to respond to you. But I think that's what is implied by what you have written.
I'm radically dismissive of dishonest arguments, or arguments that are blatantly and obviously wrong. I don't think it's correct to respond to them as if they are real arguments. The most effective thing is just to dismiss them. Honest readers understand what you are doing. That's the most effective response.
For example, if someone says "I think you missed the point," followed with a total non-sequitur, which creates a false appearance that I missed the point, when I did not miss the point, I'm going to just dismiss it out of hand, and I'm not going to discuss it.
I think that's totally appropriate. You don't give people an honest, serious response when they are playing games.
The 6 year old cousin analogy is apt. If someone acts like a six year old, I respond appropriately for that age. If someone acts like an adult, I respond appropriately for an adult.
By the way, I'm not rude. I'm never rude. Saying "I didn't miss the point" is the most polite thing you can say to the kind of blatantly wrong comment I got in that instance. All it really signals is that I disagree with what was said and don't want to discuss it further. That is fair.
So then just don't respond to me...?
This is the weirdest overall response I think I've read on HN. Probably explains the "I'm not a troll." disclaimer.
Anyway, have a good day.
This comes across as an admission that your earlier comment was not genuine, but I can't believe you actually mean that. It's also gross behavior, because you've encouraged me to enter into a conversation with you and then blamed me for doing it and walked away.
There is nothing weird about anything I've said in this conversation about proper forum interaction. I've gone to great pains to explain my perfectly normal forum behavior to you, which you raised a nit pick objection about. You are the one who casually thousands of people of hypocrisy without appearing to be aware of it. Accusing me of weird behavior is completely missing the mark.
No, this conversation doesn't explain the disclaimer on my profile. The disclaimer is there because I'm often outside the Overton window of much of the Silicon Valley crowd. I don't think that's the case in this particular conversation.
If you study the history of bitcoin (or were around and paying attention), it wasn't at all designed as a cult or a scam. So this is factually wrong. However I think it's true of a lot of the later coins.
> I dont think anyone has ever yet explained how this is meant to function as a currency.
People have, like a zillion times, including on this forum. If it matters to you (it shouldn't), even professional economists fall into different camps on the nature of money. If you can't see that there is a real and genuine argument on both sides, you aren't trying.
> One reason they're terrible is they transfer power over the economic system to early-stakers, as they have all the wealth
This is a worst-case view of the situation, but many would say that even this worse case is better than giving "democratic" institutions unlimited power to print money. So again, there is a genuine argument on both sides.
> So crypto people, sitting on a lot of coins, who urge adoption arent trying to "free" the economy, they're trying to own it.
And there are also crypto people who are true believers, even if they do have a lot of coin. In fact, the people who got into bitcoin early but weren't true believers couldn't believe how much money they made when they sold out at $30. The distribution of true believers vs. get-rich-quick people in bitcoin is grossly different from what you imagine and portray.
> any corporation which accepts bitcoins is thereby recognising an essentially feudal type of economic power.
You're really conflating economics and government. For example, in the US, Bill Gates doesn't have the same kind of power as the two political parties, who control armies of soldiers and domestic enforcers. When I say "kind," I mean that literally; it's not that Bill Gates has less power; it's that he has a different kind of power. Bitcoin transforms some of the kind of power wielded by government actors into the kind of power wielded by Bill Gates.