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Bitcoin is largely controlled by a small group of investors and miners

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Re: Bitcoin is largely controlled by a small group of investors and miners

#141

Post by nuerow »

Hermel wrote: post #109
YossarianFrPrez wrote: post #102

Earlier quoted context omitted.

Interesting quotes from the first section of the paper: "We first document that 90% of transaction volume on the Bitcoin blockchain is not tied to economically meaningful activities but is the byproduct of the Bitcoin protocol design as well as the preference of many participants for anonymity." "We show that the Bitcoin mining capacity is highly concentrated and has been for the last five years. The top 10% of miner…

The top 1000 investors hold 15% of the supply? That’s not “highly centralized” if you compare to the stock market. For Tesla, one single shareholder holds 17% of the whole company.

> For Tesla, one single shareholder holds 17% of the whole company.

If said investor abused his leverage to manipulate the stock value to dump his holding on unwitting buyers prior to making it tank, he would be facing a prison sentence.

In BTC that would be just another uneventful day.

Re: Bitcoin is largely controlled by a small group of investors and miners

#142

Post by beambot »

Gustomaximus wrote: post #119
Hermel wrote: post #109

Earlier quoted context omitted.

The top 1000 investors hold 15% of the supply? That’s not “highly centralized” if you compare to the stock market. For Tesla, one single shareholder holds 17% of the whole company.

A company is very different from a currency. Apples and oranges comparing those in terms of centralisation.

How does the USD currency compare? I'd wager that the top-10 banks and the various central reserve banks own or control the vast majority of USD.

Re: Bitcoin is largely controlled by a small group of investors and miners

#143

Post by spiorf »

tromp wrote: post #128
McGuive7 wrote: post #91

Soooo. . . you're saying a tiny fraction of the population controls the vast majority of the resource? You mean just like every other major resource on the planet? :)

The capped supply and heavy bias of coin emission toward initial years create a strong incentive for hoarding and pure speculative use. I would expect much wealth concentration if the emission had been purely linear with a fixed block reward, taking MUCH longer to get down to a small yearly supply inflation (100 years to get to 1%). Such a SLOW emission would focus on the use as a currency rather than "store of value…

But that wouldn't exist in isolation. A less inflationary cryptocurrency would be more desiderable to traders, miners would flee too and the system wouldn't be secure against attacks.

You would end up with the same situation as now, just with some name swapped.

Re: Bitcoin is largely controlled by a small group of investors and miners

#144

Post by wcoenen »

Hermel wrote: post #109
YossarianFrPrez wrote: post #102

Earlier quoted context omitted.

Interesting quotes from the first section of the paper: "We first document that 90% of transaction volume on the Bitcoin blockchain is not tied to economically meaningful activities but is the byproduct of the Bitcoin protocol design as well as the preference of many participants for anonymity." "We show that the Bitcoin mining capacity is highly concentrated and has been for the last five years. The top 10% of miner…

The top 1000 investors hold 15% of the supply? That’s not “highly centralized” if you compare to the stock market. For Tesla, one single shareholder holds 17% of the whole company.

According to [1], Elon held just shy of 23% of Tesla at the end of 2020. See table with "% ownership" column at the bottom of the page.

[1] https://whalewisdom.com/stock/tsla

Re: Bitcoin is largely controlled by a small group of investors and miners

#145

Post by pcwalton »

anonporridge wrote: post #108
nuerow wrote: post #94

Earlier quoted context omitted.

> Soooo. . . you're saying a tiny fraction of the population controls the vast majority of the resource? You mean just like every other major resource on the planet? :) I understand the need to try to dismiss this problem, specially from those who have a dog in the race, but the dream of having a magical pseudo-currency that solves all problems and unexplainably makes everyone richer and richer just falls out flat if…

> magical pseudo-currency that solves all problems and unexplainably makes everyone richer and richer That's not what's exciting about bitcoin. What's exciting is that it is the first digital, global money that isn't protected by the proof of violence of the state. The US dollar is the world reserve currency because the United States is the best in the world at deploying destructive power, and the British and French…

I really would like to see a defense of Bitcoin that doesn't rest on the assumption that I want to live in Galt's Gulch.

Re: Bitcoin is largely controlled by a small group of investors and miners

#146

Post by koonsolo »

nuerow wrote: post #110
anonporridge wrote: post #108

Earlier quoted context omitted.

> magical pseudo-currency that solves all problems and unexplainably makes everyone richer and richer That's not what's exciting about bitcoin. What's exciting is that it is the first digital, global money that isn't protected by the proof of violence of the state. The US dollar is the world reserve currency because the United States is the best in the world at deploying destructive power, and the British and French…

> That's not what's exciting about bitcoin. What's exciting is that it is the first digital, global money that isn't protected by the proof of violence of the state. No, not really. At all. You're trying to make it sound like everyone is just an anarchist activist trying to fight the power, when in reality it's just people scrambling to make a quick buck. Let's be real and put it in perspective: do you feel that peop…

> do you feel that people such as the Winklevoss twins give a damn about theoretical concepts such as "proof of violence by the state"?

They of course do give a damn about theoretical concepts such as "The Great Monetary Inflation"

They make a pretty good case for bitcoin at https://winklevosscapital.com/the-case-for-500k-bitcoin/

But don't worry about all of this, I'm sure you can just dismiss this all. Meanwhile our investments are going through the roof :P

Re: Bitcoin is largely controlled by a small group of investors and miners

#147

Post by supermatt »

sunshinerag wrote: post #124

what does control mean here? they can print more bitcoins into existence? they can fake a transaction? they can undo a transaction? they can steal from other wallets?

They can undo transactions. Its a bit more complicated than that, but thats the gist of what control enables.

Basically, the first to mine a block has control over the history since the previously mined block. Because they have superior mining capability, they are more likely to be first to mine a block. They are also able to refuse to accept others blocks, which could effectively fork the blockchain, causing a split head, which results in other other issues.

EDIT: just reread, and theres 2 aspects to control. Theres the mining aspect (which i mention above) and then there is the market manipulation aspect (which is to do with pump/dump - unrelated to above).

Re: Bitcoin is largely controlled by a small group of investors and miners

#148

Post by corobo »

anonporridge wrote: post #108
nuerow wrote: post #94

Earlier quoted context omitted.

> Soooo. . . you're saying a tiny fraction of the population controls the vast majority of the resource? You mean just like every other major resource on the planet? :) I understand the need to try to dismiss this problem, specially from those who have a dog in the race, but the dream of having a magical pseudo-currency that solves all problems and unexplainably makes everyone richer and richer just falls out flat if…

> magical pseudo-currency that solves all problems and unexplainably makes everyone richer and richer That's not what's exciting about bitcoin. What's exciting is that it is the first digital, global money that isn't protected by the proof of violence of the state. The US dollar is the world reserve currency because the United States is the best in the world at deploying destructive power, and the British and French…

That would have been the case if crypto had been used as a currency instead of as any other stock asset

You can't use it anywhere as currency! I guess you can buy weed with it online, but that's about it

Re: Bitcoin is largely controlled by a small group of investors and miners

#149

Post by bserge »

anonporridge wrote: post #108
nuerow wrote: post #94

Earlier quoted context omitted.

> Soooo. . . you're saying a tiny fraction of the population controls the vast majority of the resource? You mean just like every other major resource on the planet? :) I understand the need to try to dismiss this problem, specially from those who have a dog in the race, but the dream of having a magical pseudo-currency that solves all problems and unexplainably makes everyone richer and richer just falls out flat if…

> magical pseudo-currency that solves all problems and unexplainably makes everyone richer and richer That's not what's exciting about bitcoin. What's exciting is that it is the first digital, global money that isn't protected by the proof of violence of the state. The US dollar is the world reserve currency because the United States is the best in the world at deploying destructive power, and the British and French…

Energy and compute power backed by, you guessed it, proof of violence.

Re: Bitcoin is largely controlled by a small group of investors and miners

#150

Post by [deleted] »

hutzlibu wrote: post #131
nuerow wrote: post #94

Earlier quoted context omitted.

> Soooo. . . you're saying a tiny fraction of the population controls the vast majority of the resource? You mean just like every other major resource on the planet? :) I understand the need to try to dismiss this problem, specially from those who have a dog in the race, but the dream of having a magical pseudo-currency that solves all problems and unexplainably makes everyone richer and richer just falls out flat if…

"but the dream of having a magical pseudo-currency that solves all problems and unexplainably makes everyone richer and richer " I never heard that claim from crypto supporters, only from critics.

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