Bitcoin is largely controlled by a small group of investors and miners • Hacker News Board

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

#471

Post by latchkey » Thu, Oct 28, 2021, 9:27 PM UTC

littlestymaar wrote: post #465

latchkey wrote: post #446

Earlier quoted context omitted.

What I said is not rewriting history at all. It literally says it in the document you quote: "Note that in the future, it is likely that Ethereum will switch to a proof-of-stake model for security" It doesn't get more clear than that.

If you aren't able to tell the difference between “the goal is X ” and “it's likely we do X in the end for security reasons” then there's not much point to have a conversation.

You are being pedantic. Your argument is that the authors of that document can predict the future and only make definitive statements. You're effectively basing your entire argument over a single word. The intention was clear or they wouldn't have mentioned it at all.

Ok, you win! Nobody knew PoS was coming! What a great surprise! /s :facepalm:

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

#472

Post by int_19h » Thu, Oct 28, 2021, 9:51 PM UTC

qeternity wrote: post #442

int_19h wrote: post #427

Earlier quoted context omitted.

And? You don't pay capital gains on that. You pay it on the increase relative to the original cost to you (which you payed with already-taxed money). Why shouldn't the increase be taxed same as any other income? Or more, actually, since it's not earned by productive labor?

Capital gains arises (on average) when a company grows and thus makes more money. Corporations pay corporate tax on those profits. Why should my share of those profits be taxed again at the individual level? Additionally, the higher the capital gains tax, the higher the expected returns have to be. Lower capital gains incentivizes riskier investment, which, within reason, is a net positive for society.

Your share of those profits is dividends, not any gains from increased value of the underlying asset.

And I don't think we need to incentivize even more investment, given where things are at the moment. All it does is concentrate more market in the hands of the same people (who already have enough money to throw it around). It doesn't actually benefit the society as a whole, unless your metric for that is some mindlessly averaged metric like GDP.

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

#473

Post by exporectomy » Fri, Oct 29, 2021, 1:12 AM UTC

zepto wrote: post #409

exporectomy wrote: post #30

Earlier quoted context omitted.

Really? Can you point to any hype from the last, say, 5 years that even hints at thinly spread mining or ownership? Individuals were mining on their PC in its first couple of years, but that ended long ago.

That’s a straw man. The hype is all about how it’s distributed and nobody controls it, when in practice it’s not much different from conventional money except that those with power are even more hidden.

Its distributedness is still worth something even if only a small number of people control most of it. If they go rogue or get stopped by the government, others can take over. That's quite unlike any centralized system.

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

#474

Post by skinnymuch » Fri, Oct 29, 2021, 3:17 AM UTC

somethoughts wrote: post #455

gitfan86 wrote: post #346

Earlier quoted context omitted.

The big difference between BTC and MSFT/TSLA is that successful companies have cash flow. MSFT has a dividend that it pays out every year. TSLA is eliminating debt and adding cash to its balance sheet. If everyone stopped buying BTC and only held BTC and bought another crypto currency, BTC would go to zero since no one would be putting money in. Similar to a pyramid scheme, once there is no new money it collapses. On…

Sorry for the late reply - yeah I was mostly talking about 2008 negative income TSLA when they only made the Tesla roadster, and no income MSFT when they made Windows 3.1 and their PE ratio was 80. Perhaps its better to throw in some growth stocks that ended up not being particularly amazing such as WeWork, Evernote, Zynga, etc. All had low stock float, no/negative income and so were trading on emotion.

WeWork went public this week. Zynga is the big example used all the time as a huge failure. When it isn’t so bad. Evernote isn’t public. It’s been down hill for a while.

Are you talking secondary markets?

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

#475

Post by skinnymuch » Fri, Oct 29, 2021, 3:19 AM UTC

SergeAx wrote: post #231

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.

Do you mean Elon Musk? Because data available for me says that top shareholders are Vanguard and Blackrock funds with ~6% and ~5%.

That’s probably a list of institutional funds only

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

#476

Post by derangedHorse » Fri, Oct 29, 2021, 3:49 AM UTC

bart_spoon wrote: post #408

spiorf wrote: post #133

Earlier quoted context omitted.

Motivation of participants is irrelevant. Bitcoin is working because its participants are greedy and behave as such.

> Bitcoin is working It isn't working though. It isn't practically useful for anything . They only people getting value out of bitcoin are doing so by converting it back to fiat. You can't buy virtually anything with Bitcoin. If Bitcoin was meant to be a pyramid scheme where you get rich by convincing others to prop it up long enough for you to cash out, it is working. As a currency, its a total failure.

This is a false statement, communities have found value in Bitcoin. El Salvador being the go-to example but we're also seeing adoption in other places, exemplified by the acceptance of Bitcoin at the Venezuelan airport. In addition to that we're seeing companies dedicated to the ad-hoc conversion of crypto to local currencies using specialized debit/credit card. This will effectively help facilitate the move to the ubiquitous spending of crypto.

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

#477

Post by derangedHorse » Fri, Oct 29, 2021, 4:14 AM UTC

FabHK wrote: post #342

mateuszf wrote: post #280

Earlier quoted context omitted.

That would create a fork that nobody would use (because bitcoin holders are incentivised by the halving mechanism).

> a fork that nobody would use Except the "small group controlling 90%" of mining power that introduced that change (in the hypothetical example) would use it. And their chain would grow longer and be the canonical one (though that, of course, is also just a convention encoded in the code). And they could still spend some 20% or so of their hash power to entirely mess up the one true chain, if they so desired.

If they moved to that chain and contributed their hash power there, it wouldn't automatically make the chain they're working on the canonical one. A change in the the protocol would not ensure consensus between the 2 chains. And regardless of how much hash power they have they probably wouldn't be able to "mess up the one true chain".

The history of the bitcoin blockchain can't be changed unless a miner can contribute the same amount of work it took to generate the section of blockchain they'd wish to change (so from a historical start block to the latest block). Even then, the most they can do is undo payments and double spend coins. This would probably not be economically viable since Bitcoin clients would probably start to blacklist expenditures from the miners addresses if suspicions of a double spend attack arose. Because wallets and nodes can tell when there's forks, people would also pick up on double spends which would disqualify any and all money attempted for the double spend. Overall it would probably be cheaper to just spend coins fairly.

Also, as an aside, the protocol-valid bitcoin blockchain with the most work gets chosen, not the longest* blockchain

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

#478

Post by jimmydorry » Fri, Oct 29, 2021, 4:29 PM UTC

postalrat wrote: post #415

jimmydorry wrote: post #45

Earlier quoted context omitted.

Corrupt states have a monopoly on violence. There is no such similar force ensuring people have to use the crypto made available to them. The Bitcoin network operates by balancing the economic incentives of each party, and at any point, any party is free to walk away. __Developers:__ * Profit motive: Paid salaries / bounties / donations by users, business that build off the Blockchain, miners, and appreciation from t…

Three groups all seeking profits, but where do the profits come from? Tether?

Users: Profit through deflationary design (demand higher than supply). Most currencies are inflationary by nature, while Bitcoin is designed to be the opposite (the first phase aimed for growth is inflationary, but this pressure decreases substantially every halving).

Developers: Profit from being a user, as well as from the power to drive additional demand by improving the ecosystem (make it easier to use, more powerful or more efficient), and lastly by way of bounty/salary/donation based on how well they are achieving #2.

Miners: Arbitrage between cost of electricity and price of crypto, transaction fees mined, block reward, and finally from being a user.

The funny money some exchanges offer to make moving fiat easier or faster between other exchanges is pretty irrelevant. As long as tether is not committing massive fraud by minting billions to buy crypto on a fraudulent basis, it doesn’t matter what token people use to move their fiat. Tether could explode tomorrow or in decades from now, but I don’t see them bringing down crypto longterm, just like I don’t see an Elon tweet having the potential for long term impact.

I would certainly never touch Tether, and anyone who does is taking a not insignificant risk of getting burnt if there is no-one willing to buy their tether when they want to sell (Tethers are not and have not been redeemable for dollars from Tether corp for a long time).

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

#479

Post by CryptoPunk » Sat, Oct 30, 2021, 3:02 AM UTC

webinvest wrote: post #463

anonporridge wrote: post #105

Earlier quoted context omitted.

Yes. Inflation is a tax.

Inflation is a tax that subsidizes transaction fees. Currently 98% of the miner revenue is paid out by inflation and 2% by the transaction fee.(1) As the Bitcoin inflation rate falls, transaction fees will rise. (1) https://www.theblockcrypto.com/data/on-chain-metrics/bitcoin...

There is no in-protocol mechanism to increase transaction fees in reaction to declining inflation.

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

#480

Post by hnbad » Sat, Oct 30, 2021, 1:55 PM UTC

jessaustin wrote: post #331

hnbad wrote: post #200

Earlier quoted context omitted.

Except crypto isn't currency, it's an artificial resource with no inherent usefulness beyond exchange. States won't give up their currencies because that would put all of them in the position of, say, Liberia, rather than the position of the US, EU or China who can literally print money to pay. And even if all state currencies vanished over night, this would change nothing for individuals because the vast majority of…

States won't... El Salvador is considered by many to be a state.

It's interesting that you didn't correct me on Liberia, which actually merely had its currency pegged to the US dollar temporarily. I must have mixed up Liberia with another country.

El Salvador is a fun case because they didn't exactly switch to the US dollar because their economy was doing so great but because it was either that or massively devaluing their already dodgy currency because they are a very small country and their economy heavily relies on international trade.

They introduced Bitcoin as "legal tender" on top of the US dollar against the will of the majority of their citizens but the law was part of a program to lure in foreign investments. This too followed earlier economic problems, so it's more of a cashgrab than a genuine interest in crypto currencies.

El Salvador replaced its currency with the US dollar. It did not replace its currency with Bitcoin. It also didn't replace the US dollar with Bitcoin, it just added it as a form of legal tender. It also suffered almost immediate consequences when the price of Bitcoin crashed and they had to dump additional money into it to compensate for this.

It's too early to say but at the moment this doesn't sound like a wise political move for El Salvador rather than a risky publicity stunt for the president.