Bitcoin’s ‘One Percent’ Controls Lion’s Share of the Cryptocurrency’s Wealth | Hacker News Reader

Bitcoin’s ‘One Percent’ Controls Lion’s Share of the Cryptocurrency’s Wealth

wsj.com

This article is fake news. Bitcoin addresses are not identities and this “%1” are custodial services like exchanges.

The reality us, with deeper analysis you can see that bitcoin us widely distributed and getting mire widely distributed over time.

This is contrary to the dollar where the cantillon effect means the rich get richer and everyone else gets poorer.

All cryptocurrencies that emit the majority of coins in just the first few years suffer from concentration of wealth. In particular ones starting with a large premine or as Proof of Stake (which amounts to a 100% premine).

To limit wealth concentration to that of fiat (the best you can hope for), an emission should be ultra slow, such as having a fixed emission rate [1]. Keeping the yearly supply inflation high for several decades helps deter speculators and focusses on use as currency.

[1] https://john-tromp.medium.com/a-case-for-using-soft-total-su...

Doge it is then, for now. How long until the first countries adopt the Grin standard?

But the people who start cryptocurrencies may not really care about decentralization enough to not own large amounts of the currencies they create. :)

I've looked into this problem enough that I'm fairly confident that the Austrian economics principle of stable prices through velocity targeting is the answer. I'm also 100% behind no block reward - the only reward miners should ever get is in fees. If the money supply needs to be raised to keep velocity where it needs to be, subsidies should go to those which are actively using it and paying those fees.

But even if such a cryptocurrency were created and mainstream, I still don't think that would fix the problems that stablecoins like Tether creates when they can add arbitrary margin.

How are you going to do velocity targeting without negative interest rates (which the Austrian economists don't want)?

Also, increasing the money supply to increase velocity doesn't work, at least not in our current system.

In our modern banking system there are at least two sources of finance for banks, overnight deposits and certificate of deposits (your money is stuck for x months or years). With the latter, the M1 money supply stays the same as the dollars entering the banking system are equal to the number of dollars getting out. The former works in a surprising way. As the bank cannot take away your deposit (you can withdraw it at any time) the bank must create new money with central bank reserves. (which is one of the reasons the Fed does QE) When the interest on CDs gets close to 0% people will simply hold their money in savings accounts. The money supply explodes (lack of CDs means M1 money must be created) without ever entering the economy which drags the velocity of money down.

Burned transaction fees, similar to a sales tax with a slight twist. Fees would ramp up in a similar way to Bitcoin, where the sooner you want to transact, the more it costs, and perhaps say a month out transactions are always free.

I think there's something in that system where we could mint blocks weeks in advance, and this would keep the need for PoW to an absolute minimum.

The ubiquity of power laws never ceases to amaze me.

Bitcoin follows Conway's Law. Neat!

It’s good to be in the 1% in any big and strong asset class. I’m sure Tesla 1%-ers don’t complain either.

What percentage of those coins are lost? Never moved, forgotten keys, long forgotten etc?

Prob 40% ish. I think 8 million coins have moved in the last 2 years. There is about 1.3M on exchanges, losing <100k a month. 1 more year until no more left to sell on exchanges.

That is because the system response tends to gravitational effecat

The 99% should get together and fork Bitcoin with a new rule: no transactions allowed from wallets held by the 1%. Dark coins. Useless.

/sarc

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