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Comment by cryptodogemoon | Hacker News Reader

Satoshi actually used a manipulative log curve for his minting algorhythm which effectively created a ponzi style distribution scheme. The majority of BTC was produced to the small userbase for minimal effort, whereas time passes the computational work and wattage required to produce coins for late adopters increases as presumably more users discover the system.

Satoshi easily could have chosen a linear algorithm anticipating additional work input with more users, instead he designed a system to exploit late adopters.

The aspect of Bitcoins having a limited supply is mostly ineffective, as all the features of Bitcoin are now available in other service networks which are including more advanced features and better ASIC resistant algos.

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>Satoshi easily could have chosen a linear algorithm anticipating additional work input with more users, instead he designed a system to exploit late adopters.

Are you suggesting he provides a bigger reward for work as time goes on, thereby providing more currency later in the piece?

That would be counter-intuitive to the idea of bitcoin as a fixed store of wealth (strong libertarian influence, anti-bank ethos being kinda the cornerstone of the origins of bitcoin).

His plan was that the transaction fees would be what sustains the miners due to bitcoin being worth a lot once the block reward was low. The deflationary nature was not "manipulative" in the way you are implying, it was done in order to slowly wind down the reward and currency generation so eventually the transaction fees were the purpose for mining.

>The aspect of Bitcoins having a limited supply is mostly ineffective, as all the features of Bitcoin are now available in other service networks which are including more advanced features and better ASIC resistant algos.

Whether or not this is true is neither here nor there, the effectiveness is non consequential when it comes to the intent. He was not attempting to exploit late adopters.

>Are you suggesting he provides a bigger reward for work as time goes on, thereby providing more currency later in the piece?

Yes.

The minting design Satoshi choose merely granted a few users the majority of the supply for the least amount of work. They can then horde and hope to sell at a profit to late adopters.

>That would be counter-intuitive to the idea of bitcoin as a fixed store of wealth

No, the total supply remains the same. Distribution and production is the issue. The linear curve should align to match the energy and work input, assuming that is representative of additional users joining the network.

Fixed store of wealth is even more difficult to achieve, as users must trust the design to be desirable.

>No, the total supply remains the same. Distribution and production is the issue. The linear curve should align to match the energy and work input, assuming that is representative of additional users joining the network. Fixed store of wealth is even more difficult to achieve, as users must trust the design to be desirable.

I understand what you are saying (even if I disagree with the concept), but I think you are missing that this was created as a run away from the GFC, heavy inflation would run a counter to what libertarians and anti-global economics people would believe in.

I didn't say anything about your particular opinion on wealth distribution on crypto, I'm just saying your opinion that satoshi was attempting to exploit people is baseless.

Even with the decrease in the mining reward over time, Bitcoin mining is now consuming enough energy to power a small county. I'm not convinced that having the mining reward increase over time to provide more reward to later miners would be a wise feature in any way.

As Satoshis minting algo was used, why should one user receive significantly more coins for such low effort simply for running the software at an early date?

The end result is early users exploiting users who join the network after them. Ponzi style.

Because at the point he started the network the coins were worthless, he got paid less per block than someone who mines a block today even though the mining reward is 1/4 of what it was in 2009.

No, this is purely the internal economic model of bitcoin production concerning work/energy/value input versus output to workers.

Imagine someone tells you they've created a money printing machine that prints 21m BTC, and they design the machine to give them most of the BTC and when it arrives in your town the man says "well it looks like the rules have changed now and your work isn't worth as much as my work because you encountered the magic box after me"

The users who ran the software on the network in 2010 required much less value input to generate bitcoins. Acording to Satoshis design, a user running the software now on an identical computer would not produce the same rewards for their work. This is essentially an intentional ponzi design.

Users who aquired bitcoins for low capital input are incentized to psychologically convince late adopters to purchase their bitcoins for more than it cost to produce and acquire.

The rule change was fully known about in advance, it didn't suprise anyone. And you could contend that the work is now worth more. For a long time mining was economically unrewarding, miners created a blockchain and provided it with power at their own cost and without any guarantee of success or return. Those who joined later were joining when their work would be immediately rewarded with profit because it became economically feasible to mine. These late arrivers actually pushed out a lot of the early miners by using more powerful and efficient equipment. So they may have taken more of a capital risk but less of a risk in terms of knowing a return was possible and would repay their investment.

If later comers took more capital risk, in what way did they take less risk, exactly?

The semantics matter here. Perhaps the later comers were more opportunistic and optimistic about the likelihood of achieving a favorable return. But they had to take more risk, since they were later to the party and risked more capital (as you noted).

He didn't design it to exploit later adopters, he designed it so that the output was consistent regardless of the network size.

Completely wrong.

The output is actually completely inverse. More work, more users, less output.

The consistency you're thinking of is likely the algorithm that adjusts blocktime to 10 minute intervals.

Apologies, consistent was not the correct word to convey my meaning. The reward schedule is consistent but the reward itself is pre-determined, known by all participants, it was set out from the beginning. There was no attempt to hide the idea until a certain proportion of the BTC was mined by the creator.

Penalising late adopters is just the reverse of rewarding early adopters and bitcoin needed early adopters to keep the network alive so it makes sense to reward them. I dont really buy that late adopters are being penalised though.

If you design a system for mass adoption that exploits the masses and only benefits a tiny group of people and you publish your blueprints and claim the details were available, that doesn't change the fact that you've already literally taken the money supply and run.

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