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Coinbase mafia shows how tight a circle holds sway over Bitcoin

bloomberg.com

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Re: Coinbase mafia shows how tight a circle holds sway over Bitcoin

#11

Post by leto_ii »

ALittleLight wrote: post #5

"Mafia" seems a strange and prejudicial word to use here. "Less than 2% of the anonymous ownership accounts that can be tracked on Bitcoin’s blockchain control 95% of the digital asset" - at first I thought this was really astonishing. Now, I'm not so sure. My first interpretation was that 2% of bitcoiners have 95% of the bitcoin - but now I wonder how many addresses a typical person has. e.g. If I create an address…

I'm not sure about this, but does every person using an exchange get their own address?

My impression was that they don't and that a lot of transactions are actually settled within the exchange using good ol' relational databases and not the blockchain.

If that's the case, then all of these people will get lumped into just a few exchange controlled adresses, which will give an exaggerated impression of concentration.

Re: Coinbase mafia shows how tight a circle holds sway over Bitcoin

#12

Post by africanboy »

superbcarrot wrote: post #4
mrfinn wrote: post #3

Blockchain technology is doomed, and somebody will be, eventually, the last link of the ponzi scheme.

I don't get why people's thinking swings to these wild extremes. Why does it have to be either a societal disruptor that changes everything or a doomed ponzi scheme? Can't it be something like "oh we tried to have cool internet money, turned out that it's not that great, some people are still into it I guess".

because there is no such thing as "cool invented money" it is either useful for society or it is a scam.

Re: Coinbase mafia shows how tight a circle holds sway over Bitcoin

#17

Post by KirillPanov »

leto_ii wrote: post #11
ALittleLight wrote: post #5

"Mafia" seems a strange and prejudicial word to use here. "Less than 2% of the anonymous ownership accounts that can be tracked on Bitcoin’s blockchain control 95% of the digital asset" - at first I thought this was really astonishing. Now, I'm not so sure. My first interpretation was that 2% of bitcoiners have 95% of the bitcoin - but now I wonder how many addresses a typical person has. e.g. If I create an address…

I'm not sure about this, but does every person using an exchange get their own address? My impression was that they don't and that a lot of transactions are actually settled within the exchange using good ol' relational databases and not the blockchain. If that's the case, then all of these people will get lumped into just a few exchange controlled adresses, which will give an exaggerated impression of concentration.

> I'm not sure about this, but does every person using an exchange get their own address?

Definitely not. Exchanges that aren't stupid keep the vast majority of their funds in cold storage, which is held in a small number of addresses.

Most people store their bitcoin on exchanges, even though that's a pretty bad idea. Not your keys not your coins.

The article is massively misleading. It should say "95% of bitcoin is controlled by a small number of entities, most of which are exchanges". That's still not good, but at least it's not deceptive.

Re: Coinbase mafia shows how tight a circle holds sway over Bitcoin

#18

Post by ZeroMinx »

gnrlst wrote: post #13

Remember when BTC used to be fun and exciting? Stupid projects being created, tipping widespread all over the internet. It was created to be a "peer-to-peer electronic cash system" (quoting from the whitepaper title)... oh how far it has strayed.

Most of this also applies after a s/BTC/WWW/

Re: Coinbase mafia shows how tight a circle holds sway over Bitcoin

#19

Post by ur-whale »

mrfinn wrote: post #3

Blockchain technology is doomed, and somebody will be, eventually, the last link of the ponzi scheme.

And all the tin-foil wearing weirdos who had been hollering about it from their mum's basement will be vindicated.

That will be quite a day!

Re: Coinbase mafia shows how tight a circle holds sway over Bitcoin

#20

Post by barbegal »

gnrlst wrote: post #13

Remember when BTC used to be fun and exciting? Stupid projects being created, tipping widespread all over the internet. It was created to be a "peer-to-peer electronic cash system" (quoting from the whitepaper title)... oh how far it has strayed.

Yes I remember when you could send Bitcoins and your transaction was practically guaranteed to get into the next block. I had fun solving puzzles created using Bitcoin scripts. If you could solve the puzzle you could win some Bitcoins. Transaction fees were so low as to be irrelevant and you could send small tips to anyone you wanted, buy beers, gift it to strangers to try out...

But even then you could see that Bitcoin wouldn't scale. Most people couldn't run full nodes, block sizes were getting bigger and bigger. Bitcoin worked great when you had a few hundred thousand people using it but with 10s of millions it doesn't work well.

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