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Comment by loceng | Hacker News Reader

It's currently mostly smoke and mirrors, people who are vested into the ecosystem and VC money feeding it. Their goal is to have society adopt it, so then their "$1000" is actually worth something, however right now as per example of the Ethereum's Ether drop to $0.10 - the crypto-assets aren't very liquid and their communities know this and are sneaky/sly and careful to not upset this. If they succeed it will be bad for society, it will unfairly and unreasonable transfer wealth to the "early adopters." Part of the smoke and mirrors is the purposeful misnomer of using the word currency in its name - cryptocurrency - and using the $ sign.

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We can disagree with whether or not there is value in decentralizing certain systems, or whether a specific project or team is actually working towards creating value, but the idea that "If they succeed it will be bad for society, it will unfairly and unreasonable transfer wealth to the "early adopters." is just crazy.

First movers, early adopters, investors, these folks are providing funds to create things. They're taking a risk and if that risk pays off, and something valuable is created, should they not share in that value?

One of the truly game changing features of the business models blockchain enables is the alignment between creators, investors and users. All have an opportunity to profit if the thing works. That alignment is the wild card in all of this, how much value does having a large community of owners, folks with skin in the game and a desire to make something popular and work, bring to the process of adoption of a new tool or system? I think it's a big one.

The question is how much value should early adopters reap. Before bitcoins first halving, way back in 2012, almost half of all bitcoin were minted. Between then and the second halving in 2016, about another 25% of all BTC was mined. As of now, well over 75% of all bitcoin ever has already been mined, yet bitcoin has a market cap of around 42B - not even a third of McDonalds, which is around 130B.

If bitcoin ever were to become a universal currency, its market cap would need to grow into the tens of trillions. That represents at least a thousandfold increase in participation, and even right now 1% of all wallets hold 99% of the money. The richest wallet right now holds about 315 million USD in bitcoin. Is it truly reasonable that the person that controls that wallet, if bitcoin were to grow a thousandfold to encompass a large part of the global economy, be worth more than the current top four richest people alive? Wealth inequality is bad enough as is.

I think everyone can agree that it would be a disaster for bitcoin to take over traditional currency systems with its current design, where the total money minted ever is already almost all in circulation. By 2020 about 88% of all bitcoin will have been produced. That is just preposterous for anyone considering trying to grow it into a global currency of substance.

I'm no financial expert, but I don't understand why it matters that 88% have been produced. Each bitcoin can be split into a lot of pieces. The satoshi is currently the smallest unit of the bitcoin currency recorded on the block chain. It is a one hundred millionth of a single bitcoin.

So if the market cap was 10 trillion rather than 42B, instead of your Big Mac costing 0.00157btc like now, it would cost 0.000006594btc. Why is that a problem?

How about explaining why that idea is "crazy?" Everyone who's pro blockchain crypto-assets has the positive spin down, there's barely any discussion about the negative side.

There are already investment models for funding things that can give a pay-off, a pay-off that aren't Ponzi-like schemes.

Why is this new system needed for aligning creators, investors, and users?

And not all have an opportunity to profit - what happens to the last 40% who would eventually be forced to adopt through whatever means?

And of course it's a big opportunity if you get everyone aligned over the idea of being able to profit, the early adopters especially love this because that "$100" they spent could become worth $100,0000,000 at some point with no effort on their part. There is an inherent difference between investing in a stock in a company and something becoming a currency.

This is too shallow of a discussion to go anywhere, there has to be actual analysis and projections to refer to.

After re-reading your comment, I also never disagreed that decentralizing certain systems has value or not - it certainly does, especially if it's truly decentralized; a central platform that is well-governed can work just as well, though of course is more open to hostile takeover and the such.

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