Is the Bitcoin network an oligarchy?
epj.org
epj.org
It is strange that this study was from 2017-2018 and yet they only considered data from 2009-2013. Would be nice if there was an explanation as to why.
One thing I wanted to point out is this seems to be presented to shine a negative light on Bitcoin, but I have a feeling that if you were to plot the owners of any equity you would find the exact same patterns. People who get in early will own a majority of the supply.
For example take a look at Morgan Stanley stock. 86% of the shares are owned by institutional investors and of that chunk, five institutions own 58% of them:
https://www.nasdaq.com/symbol/ms/ownership-summary
I also think these types of patterns with regards to transactions probably exist with other currencies as well, but it is just that the data is not available for the public to analyze.
It's not hatred of Bitcoin to think that it's more worthwhile as a white paper than as an investment vehicle.
Or did you not know there are only 21,000,000 BTC ever ever ever? Have you heard of fractional reserve banking?
Limited bitcoins doesn't make it any less vulnerable to being marketed (yes, there is a lot of marketing $ behind it) as a get rich quick scheme. In fact, the growth of fiat value of bitcoin is the biggest reason people see it as an investment vehicle. Bitcoin system might be helpful in countries with oppressive governments and no trustworthy party, but I don't see largest orders of bitcoins coming from North Korea.
The decentralized claim refers to a decentralized network where the miners and nodes connected to the network are decentralized and no single entity controls 51% of the network (if they did it would collapse). Ownership of coins is not the same as hashing power.
Nowhere do people claim that the coins themselves are decentralized.
[0] https://www.ccn.com/bitmains-mining-pools-now-control-nearly...
At least some of the people who got in early, seem to know how to spend money on advertising.
That said, my point was that any “marketing” was not done by a dedicated team or company. It was done by individuals who got interested in the technology and wanted to share it with other people.
The reason I find it more inexplicable is that when you think about just the idea of peer to peer programmable finances/money without requiring any trusted intermediary that is a huge idea. In my opinion, it is almost as revolutionary as the internet itself.
I guess we will see how things progress over the next 10-20 years.
It was a Bitcoin advocate who said "nothing is cheaper than proof of work", given the precondition that you don't trust anyone. Curiously, they saw that as an argument in favor of proof of work. Bitcoin detractors see that as an argument in favor of trusting someone, because proof of work is insanely expensive and an ecological disaster.
For one, while our civilized world is built on trust and you may trust Banks, Governments, Tech companies etc, the majority of millennials do not trust Banks or Governments. Numbers outside the US are even lower. For more information about this I would recommend watching this presentation:
https://www.youtube.com/watch?v=GGberGnxiJk
I believe money is something that you should be able to have full control and ownership of. Governments and banks can lock or seize accounts/funds for any reason. Banks can limit deposit/withdrawal/transfer amounts. I don’t think that right now this is a big problem, but in the future, imagine banks getting hacked and funds stolen or even a bank run. There are a lot of scenarios where I can see our financial system failing. If inflation rates increase then it will drive more people towards things like Gold and Bitcoin. Look at what has been going on in Venezuela.
As far as the electricity use, please consider taking a look at this article:
https://medium.com/@dergigi/bitcoins-energy-consumption-6dd7...
It also links to a couple of other sources that show how gold mining, paper currency/minting, and electricity used from the banking system all use orders of magnitude more electricity than Bitcoin mining does. If ultimately Bitcoin can replace banks or even gold, then it will have done the world a favor. Most miners also use renewable energy such as hydro and solar which would otherwise just go to waste.
Andreas Antonopoulos makes the argument that it will actually help the world come up with cheaper and more efficient power by allowing people to subsidize the costs by mining Bitcoin:
I asked you why anyone but an anarchist should consider it "revolutionary" to burn crap-tons of electricity so you don't have to trust anyone.
The most you addressed that point is to tell me "actually millennials are anarchists", which is one of the sillier things I've heard about millennials recently, and that's saying something.
I personally find the idea of having complete control over your own money, being able to program it, and being able to send it to anyone in the world fairly quickly and cheaply without any intermediary revolutionary. It doesn’t hurt that it is impossible to counterfeit, and your money can be stored completely in your brain.
If you don’t find those ideas revolutionary that is fine, but I think 10 or 20 years from now you may be surprised.
Outside of any of the technical feats, there is also the fact that Bitcoin is the best form of money in terms of the properties of money. Limited/fixed supply, divisible to 8 decimal places, can’t be counterfeited, easy to transact with, etc. I don’t see how anything else can even compare.
I am also curious why you think burning crap-tons of electricity to run the current financial system where you have to trust everyone is any better?
The irony of this whole argument is that people are holding BTC in the hopes that the price against USD will get higher over time.
If that doesn't sound stupid, I don't know what does....
This seems obvious to me? Saying "bitcoin isn't marketed because it isn't run by any particular company" in response to people saying it is "marketed" in certain ways seems like missing what was clearly meant to be communicated.
Bitcoin was heavily marketed as a currency. It failed at this.
Bitcoin was heavily marketed as decentralized where no single entity owns 51% of the network. In fact Bitmain likely already does or soon will control 51% of the network [1].
The remarkable thing here is that despite these clear, observable failures... Bitcoin will go on. The true believers will continue to HODL and while shorts may pile on in the absence of fundamental economic data there's little reason to buy or sell. The price now is purely a popularity contest.
[1] https://bitcoinist.com/bitmain-51-percent-bitcoin-hashrate/
You could say the same thing about many open source software programs or apps.
What I was saying is that there is no company behind Bitcoin that represents it or speaks for it. When you say “Bitcoin was heavily marketed” you mean that people explained it that way to others.
He or she did not care about getting rich since the original coins have never actually been touched. The creator did not even know that people would start to exchange existing currencies for Bitcoin at the time the paper was published or that it would catch on at all.
I am not trying to rewrite history. I was only stating that Bitcoin is not a company. There are no big corporations controlling it. There is no sales team. There is no marketing team. Anyone who promotes it is doing it out of their own free will.
So let me repeat an important point that you just now glossed over yourself: Your attempt at rewriting well known history is insulting. Hacker News is not the proper audience for your Bitcoin marketing, not the proper venue to insult people's intelligence. Please stop insulting us by acting like it is.
YOU by your own free will and greed and behavior are an integral part of the decentralized marketing team whose existence you deny, and it's insulting that you keep repeating the same things while glossing over what other people keep telling you.
https://w3techs.com/technologies/history_overview/ssl_certif...
When I first ran across Bitcoin in 2010, I thought it was a scam but was intrigued by the tech. After studying it for about a month, I realised it wasn't a scam (though scamsters abound in cryptocurrencies, as in all things money) and went around to my friends in the tech community in my city to show it to them. They know me to be literate in networks and cryptography but only one person in the ten or twelve I approached was equally interested. The rest poopooed Bitcoin, some outright laughing me out of their offices.
Institutional thinking is what kept a lot of smart people from even looking at Bitcoin early on. The findings in this study shouldn't be surprising. In five years, should the internet still be functioning, Bitcoin will be more spread out than it is now.
Maybe it’s not like that in the US, but the only useful thing I can spend crypto on as a Scandinavian is paying for my domains.
"Bitcoin for coffee" and the like is a waste of the tech, imo. Buying network services such as you described is a better use as intercountry payments with debit cards isn't always feasible.
Bitcoin's use is better as a transnational currency when traditional payment channels are cumbersome. To be frank, Bitcoin still has some work to do in the payment channel dept but Lightning Network is getting there.
In the US, there are more than a few places where you can trade out btc for gold/silver and sell the metal for fiat. It's preferable to selling on an exchange, imo.
If you can't spend now, hang onto your btc until you can. Saving is always a good idea.
Not really.
Bitcoin has lost over -50% of its value in the last 6 months.
On an even longer timeline, we're all dead.
If you look to ancient Athens, it wasn’t uncommon for an oligarch to be exiled. If you look to modern Russia, well, there is a reason a lot of former Russian oligarchs chose to live in London and not a Russian prison.
An oligarchy is almost always a turbulent place, most of them making the BTC powershifts look calm.
If you truthfully believe bitcoin will develop into a stable alternative to state run currencies, great, I wish you good luck.
I don’t. To me it is like religion - they can’t all be right and they are mutually exclusive. I don’t trust myself to be able to pick the winner among all the losers.
The answer surely can't be "every currency issued by a government is stable forever and every crypto-currency will collapse before 5 years".
What I'm saying is, there are a lot of currencies out there, and some are more stable and have a better track record than others. You may not trust yourself to pick a winner among the losers, but I suspect you do use at least one currency from time to time, so you have picked one by default.
If possible to figure out who the addresses belonged to, then the biggest coin holders could be known.
Any common user of the network that is unfortunate enough to get caught up in this scheme would lose their money. And the long term value of the network would most likely plummet, but in 2013 it didn't for some odd reason :)
In that case, the select few owners of these coins could dump their holdings to buyers who are otherwise unaware of these large numbers of "hidden" coins. The owners make good money, the buyers overpay.
After that, it would be up to the core developers and the new holders of the coins to make the Bitcoin ecosystem a valuable place to exchange money. If they do that, then the coin will survive all that inflationary volume.
If the oligarchy never dumps, then they've just aided Bitcoin price support.
A coin does not equal a vote in Bitcoin version support, only hashing power does.
But de facto, I suspect wallet size is correlated with hashing power.
[0]: https://bitcointalk.org/index.php?topic=321630.msg3445371#ms...
Any player that directly owns 51% of the hash power, rather than just pooling, would similarly be economically incentivized to avoid such double spends, as they provide very little payout, while undermining confidence in the protoocl.
Seems much more benign, but is far more insidious, IMO.
So the exchanges are the oligarchs?
HN 2018: people who got in early in bitcoin have more of it, thus it's bad.
MLM schemes are bullshit, don’t waste your money.
If you buy into Herbalife now you are truly not making a good decision, because there is already a huge pyramid of people above you.
MLM schemes are a bad idea at the start because they are unlikely to take off, and they are a bad idea when they are running because they are unlikely to be profitable for anyone at the lower levels due to the unsustainable structure of profit distribution.
It’s just another hot potato game.
The study is 5 years old?
Guessing back then it was libertarians and drug dealers.
Also isnt this true of any early adoptor? The first smartphones were a small group too.
The bigger question is- Why is this news?
This seems to be agenda driven rather than a discovery. Who benefits from pushing anti-bitcoin ideas? These are not accidents, these studies are expensive to run. Why was this study completed?