I mean, it seems to be working. I don't really like the implications either, but it's a bit of a stretch to say it's not economics.
I have no issue with the people that invented a specific technology getting rewarded for that. But that's not what's happening here. You're giving a few early adopters most of what you want to then use to price all the assets in the world.
I'm not sure anybody is saying that bitcoin will be used to price all assets in the world. USD currently isn't, for example. It's just the dominant currency.
A reasonable estimate for all the dollars in the world is 10 trillion. Say that bitcoin being a full sucess is it being valued at a total of 5 billion. Now consider that Satoshi has about 5% of all bitcoins that will ever exist. That puts him as 3x richer than the current richest man in the world. I don't see anything in bitcoin that justifies that kind of payout and that's for the inventor of the thing.
We don't have a justice system. We have a legal system. And this seems to be allowed under our legal system, so I'm not sure the moral argument is valid.
Why do you feel it's immoral for Satoshi to own 5%? We don't even know if he's alive or still has access to the coins, but let's say for the sake of argument that he does.
Most things are actually priced in dollars to some extent, perhaps with some conversions. Maybe euros in some other cases.
>Why do you feel it's immoral for Satoshi to own 5%? We don't even know if he's alive or still has access to the coins, but let's say for the sake of argument that he does.
I'm not making a morality argument. Just pointing out that it will be a hard pill to swallow that for the (in my view small) advantages of cryptocurrencies we as a society complete the most massive wealth transfer to a single individual ever attempted. For me it's an argument as to why it's implausible crypto currencies will take hold as they exist today. They require a huge wealth transfer to a few early adopters for very little gain. If the advantages were greater it seems more likely to me that a new chain would be bootstrapped but I'm not even convinced it's worthwhile enough that it will actually take hold on a massive scale.
Bitcoin proponents keep misunderstanding this. Most of the world's assets are not currencies, they are stocks, bonds, land, etc that we do use currencies to price but we are not holding currencies when we own them. The fact that central banks can inflate currencies doesn't change the value of assets just their pricing under those currencies. So creating a new way to price assets with something that has a guaranteed fixed supply is not a big innovation. If you want that just use gold. It has a much longer history, much less volatility, much less chance of being replaced by the next fad, and isn't mainly owned by a few recent early adopters.
>presumably because it's better in some real way than other currencies.
That's the point someone still needs to make. Modern financial systems are pretty efficient and featureful. Bitcoin is for people that believe in a narrow scenario where normal institutions have failed and yet the internet and the mining infrastructure is still working. To me that seems incredibly unlikely especially given how mining economics and evolution have made it highly centralized in a few players in China.
https://www.wealthdaily.com/articles/who-owns-worlds-gold/24...
And it's far from immune to being manipulated.
How long would Bitcoin have to survive these flaws before you start to question your understanding of economics?
The phrase "limiting flaw" would be less confusing.
As an aside, the phrase "rhetorical question" has a special meaning, but the adjective "rhetorical" just means anything relating to discussion. I was trying to say that you veered off into a meta-argument about the words we were using, which unfortunately I'm now continuing.
This is the flaw I was pointing at. Others have said that while there's some research there doesn't seem to be a solution for it. A cryptocurrency that scales it's size in rough proportion to its trading and thus keeps prices in check with maybe slight inflation would be interesting. It's almost surely difficult to accomplish given the restrictions in what you can do in a distributed consensus type of setup.
I'm not convinced it even matters though. Of all the important things we need solutions for in the world cryptocurrency doesn't seem to help any than I can see.
These already exist, with all kinds of incentive schemes and target inflation rates. If you're saying that deflationary Bitcoins can't possibly "win" in the long term, but something else could, I guess it's plausible and I don't know a lot about that.
I do know that Bitcoin was started partly in protest of inflationary Fed policy.
Thus any limitations that would prevent a large growth in adoption would also destroy most of the existing/stored value, since whenever "the market" would believe that the usage growth is going to stop, the price and the market capitalization would drastically decrease.
If you're talking about transactions-per-second, how could the market not already know that this is the case? Computers have finite resources, and a decentralized immutable proof-of-work ledger would be really inefficient to run on ten billion devices forever.
But if you mean growth in total perceived value, Bitcoin's use as a trust-less standard for floating other currencies could continue indefinitely. I'm not able to talk seriously about the proof-of-work/proof-of-stake argument, or the inflation/deflation argument, but there's no known technical reason that each Bitcoin can't be worth a trillion dollars in the far future. In addition to the economic and political theory, you're basically betting that asymmetric crypto, SHA, and the Bitcoin source are all mathematically sound, and probably that physics imposes serious limits on computing power, if you want to make that (super) long play.