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Comment by tromp | Hacker News Reader

> As long as someone cares about fair, censorship-resistant money that is independent of the state, Bitcoin will exist.

With the majority of coins hodled by early adopters, Bitcoin suffers from a wealth concentration much worse than fiat's.

While proof-of-work allows for fair distribution, the extremely front-loaded emission of Bitcoin is not that fair to late adopters, let alone later generations.

Its capped supply, while unnecessary for being hard money [1], makes it more suitable for speculation than for use as a currency.

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

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Compare that to the way new circulating currency is created in fiat systems and I think you'll change your mind. All fiat system create new currency through chartered banks creating loans from reserves they don't have. There are only ~4500 chartered banks in the USA. That means all new currency is given to 4500 corporations and those corporations choose how to distribute it.

This is a massively corrupt and unfair system. It's signficantly worse and more centralized than the way Bitcoin distributes new currency. At least with bitcoin actual humans get actual currency. In fiat actual human persons only get debt that mathematically can never be fully paid back. Unfortunately it's still the least worst way to run a "modern economy".

I don't want to compare to fiat. I think bitcoin should have had a purely linear emission. No reward halvings. No early adopter advantage. No mere crumbs for later generations.

Sure; it will take a century to get inflation down to 1%, but that means speculative use is strongly discouraged. As a result, its price would be much lower as would its environmental impact. While use as a peer-to-peer currency, its stated goal, would be largely unaffected.

That's the cool thing about open source software. You can literally design your own fork, and then work to persuade people that your vision is better.

You'll be called a shit coin. But over a long enough time horizon, someone will be right.

> but that means speculative use is strongly discouraged

Volatility is ironically a "feature". As it stands your system has no incentive for anyone to overcome the barriers of joining. You're proposing a better system from the outside, not the inside.

For what it's worth, Dogecoin works this way.

No; they had 20x larger rewards in the first year. I only know of one PoW coin with a purely linear emission, and no financial rewards for its creators.

Linear doesn't make sense in the very long term.

Anyway, this is all besides the point. Now that governments have figured out they can colour coins these types of projects are doomed. Once you have a poisonable ledger and powerful entities see it in their interests to poison some of the branches of the tree then there is no actual advantage of using it. Not in the long term, I mean.

Personally, I'm pleased. I do not want global, decentralized, electronic currencies.

Linear makes perfect sense in the very long term when yearly supply will just about balance the yearly coin loss.

> This is a massively corrupt and unfair system. It's signficantly worse and more centralized than the way Bitcoin distributes new currency.

The fiat currency I use on a day-to-day basis (CAD) has had much less volatility over last few decades than Bitcoin has had over the last months / years. And any changes that have occurred (even the recent ones) have been at a generally predictable rate that makes long-term planning (e.g., for retirement savings) achievable.

Maybe Bitcoin (or whatever comes after it) will be able to achieve similar results eventually, and perhaps at that point I'll start seriously looking at it.

Almost every aspect of this critique is only coherent if you already accept the premises of crypto speculators and the political halo around it.

Favorite LOL example: the unconsidered presumption that "centralized" is a pejorative.

Second favorite example: that contemporary national debt is worthy of a stunned "don't have."

Welcome to contemporary economic policy 101. Please find a seat close to the front so you can read the slides.

I haven't thought much before about the overlap between analytic realism a la Quine and anglo-american analytic language philosophy c. 1970,

and the libertarian foundations of the crypto woo woo, but I'm motivated now to take a closer look.

It certainly makes the halo around the smart contract and the reverential tone of formulas like "in the code" and "on the chain" a lot more intelligible.

(TLDR: in 1970 there were still philosophers who took seriously the that in some sense "truth" and in particular its assertion through language, corresponded to Things in the world, and indeed was a Thing, rather than e.g. language merely being a mechanism for agents to collaborate in information exchange through negotiated patterns... the difference being, in the real world, language is just a game played by agents who each model one another and presume intent and agency...)

> all new currency is given to 4500 corporations and those corporations choose how to distribute it

This is not true. You're describing the demand-deposit component of M1 [1]. Below that is M0, i.e. reserves and fiscal policy. One created by the Federal Reserve, the other by elected officials. Above it are marketable securities (M2, the most useful measure of money) and money-market fund assets (M3), a broad and de-centralised set of issuers.

[1] https://www.wallstreetmojo.com/money-supply/

Bitcoin having an unfair wealth distribution isn't a problem beyond just that; early adopters were heavily subsidised for the risk they were taking. Unlike under a Fiat standard, that uneven distribution doesn't benefit them beyond having many Bitcoin; they can't use those Bitcoin to create more Bitcoin, increasing the gorge between rich and poor.

Even the most hard-core hodler from the 2010 era will eventually start spending his/her coins, at which point the distribution evens out. Also; many of the coins from that era are lost because the keys are lost.

You can’t make dollars from dollars in any way that you cannot also do with BTC.

Perhaps you should check out the Cantillion effect, and research fractional reserve banking. Both are clear financial systems that greatly benefit the extremely rich.

Is the point you are trying to make that neither of those apply to cryotocurrencies? Because that is not true as the history of hard fork and failed exchanges demonstrates.

Which hard forks have disadvantaged the poor? One that pops to mind is Ethereum's expensive staking requirement, but Bitcoin is apparently more in touch with the community.

Which exchange failures have disadvantaged the poor?

Well, the new change in ethereum fixed that "problem"

> early adopters were heavily subsidised for the risk they were taking

This is amusing. I mined eight bitcoins in the very, very early days using my standard off-the-shelf windows PC with no GPU. It was agonizingly slow, but it worked just fine. There was zero risk. It was a fun thing to do, silly even, which is why I didn't even bother backing up the disk those BTC were on, so I'm in the keys-are-lost category.

But risk? Each BTC was worth pennies, where was the risk?

It could have died out, and the volatility was extreme in those times.

The risk varies with how much you invest. If you invest sensibly, then the risk is low. If you buy on leverage, you end up bankrupt.

It doesn't even have to die out in order to ruin you. As you mentioned, you can go bankrupt from insolvency. You don't even have to directly use leveraged trading to purchase the Bitcoin to get bit by this. It just has to become a too-large proportion of your assets on your balance sheet, and the space it occupies feeling comfortable enough that you can take out as many loans as you want for other things you need.

"Because no way am I killing my golden goose, but I might as well enjoy life"

(PSA: Pay off your loans when you can, it may occasionally look like this bull run can never end. It will always end!)

Man, even considering the current downturn, that is a lot of money (roughly $150,000 at the time of writing).

> Unlike under a Fiat standard, that uneven distribution doesn't benefit them beyond having many Bitcoin; they can't use those Bitcoin to create more Bitcoin, increasing the gorge between rich and poor.

Yes, they can.

If anyone wants to use Bitcoin in transactions, since there is a finite supply of it, they have to go to someone who already has it. That person can be willing to lend them some, but will probably will ask for interest. So the rich Bitcoiner will get their original pile back and some extra.

This is similar to the gold-based economy (and monetary Gold Standard): they who have the gold make the rules. If someone doesn't want you participating in the economy, they can restrict your access to currency since they own so much of it.

Having a fixed/finite amount of money in an economy is a bug, not a feature:

* https://en.wikipedia.org/wiki/Great_Bullion_Famine

If someone doesn't want me to participate in the Bitcoin economy, he won't sell me bitcoins. But he doesn't consist the entire economy.

Similar to gold, it's always possible to acquire some, if you're living in a nation that is free market friendly.

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