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The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

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Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#41

Post by drcode »

sevensor wrote: post #28

It's interesting to see how this is playing out. Libertarians have long argued that government-issued fiat currency is a tool of state oppression. Now we have a real-world experiment demonstrating on a grand scale what happens when you create a currency by consensual fiat. I'd be interested to hear what libertarians think about this: Is Bitcoin truly the kind of currency libertarians have been advocating? Have I misc…

It seems like every currency is going to have a power-law distribution of holders, whether it's Bitcoin or USD. I don't see how that undercuts the libertarian desire for currencies without central control.

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#42

Post by lancebeet »

sevensor wrote: post #28

It's interesting to see how this is playing out. Libertarians have long argued that government-issued fiat currency is a tool of state oppression. Now we have a real-world experiment demonstrating on a grand scale what happens when you create a currency by consensual fiat. I'd be interested to hear what libertarians think about this: Is Bitcoin truly the kind of currency libertarians have been advocating? Have I misc…

I don't understand the dilemma. Nobody is forcing you to use bitcoin and it's still an incredibly small market in the grand scheme of things. The libertarian position is (generally) that government mandated fiat currency is a tool of state oppression. No such force exists when it comes to bitcoin, and if people are unhappy with the concentration of bitcoin in the hands of a small number of people, they are free to use any other currency.

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#43

Post by tachyonbeam »

sevensor wrote: post #28

It's interesting to see how this is playing out. Libertarians have long argued that government-issued fiat currency is a tool of state oppression. Now we have a real-world experiment demonstrating on a grand scale what happens when you create a currency by consensual fiat. I'd be interested to hear what libertarians think about this: Is Bitcoin truly the kind of currency libertarians have been advocating? Have I misc…

I Am Not a Libertarian but a few thoughts come to mind. Bitcoin is just about as close to the libertarian ideal as you can practically get in this world. The two main flaws that I can see is that it's not as anonymous as it could be, and many governments have already imposed a number of burdensome regulations which prevent people from using bitcoin as they see fit. More anonymity would get around those regulations to some extent (not saying that I agree with doing that, it's just the pedestrian reality).

WRT most of the wealth being held by a small number of people, I think it's inevitable that power structures like this arise in human societies. If you leave things unchecked, some people will acquire way more wealth than others. Doing away with regulations will likely only make that worse, not better. I'm more of a socialist, so I would prefer that we somehow limit the amount of wealth that a single individual can hold, because it gives them a tremendously unfair amount of control over the destiny of humanity as a whole.

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#44

Post by opportune »

davidmr wrote: post #7
FLUX-YOU wrote: post #4

>Holders of large amounts of bitcoin are often known as whales. And they’re becoming a worry for investors. They can send prices plummeting by selling even a portion of their holdings. That's not indicative of something that's a store of value.

Is there any currency or commodity or derivative for which that statement is not true? It seems self-evident that if you own a lot of something like gold, dollars, BTC, sterling, etc. and you sell it, its value relative to what you're selling it for declines.

It only happens if the market is not there to "catch" the sell off. Say there are 1 000 000 X and the current market price is $100 each. If I have 40% of all X and I go to sell it, I first sell to everyone willing to buy X at $100 each. Then I sell to everyone willing to buy X at $99.9 each, etc. Once we stop selling at price Y, we've essentially sold X to everyone who would buy X for between Y and $100.

Note that this implies selling off X always decreases its price. This is not true if Y is $100 (people were willing to buy more X at $100 than we had X at all), but even so a market usually has something like a bid-ask spread, so if we were trading a small amount of X we could maybe even sell it all off without moving the big price.

So really, whether this crashes the market for X depends on how much people value X. If only a few people thought X was valuable, they probably all own it, so it's worthless. If everyone wants X and are willing to pay just a bit less to get it, Y doesn't really change much from $100. There are also non-currencies like equities that essentially have a price floor: below the price floor there is basically no risk that the item will ever be worth less than that (this could be determined by something like the total value of property owned by a business).

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#45

Post by tehlike »

drcross wrote: post #15

Whales can only sell once. It's also not in their self interest to make a market collapse, why would they depress the price of the thing they are trying to sell? When whales do sell many smaller buyers then take ownership of their coins decreasing the chance of future volatility. These concerns are being exaggerated too much.

They can crash it to rebuy. It happened pretty often in altcoins.

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#46

Post by metalliqaz »

sevensor wrote: post #28

It's interesting to see how this is playing out. Libertarians have long argued that government-issued fiat currency is a tool of state oppression. Now we have a real-world experiment demonstrating on a grand scale what happens when you create a currency by consensual fiat. I'd be interested to hear what libertarians think about this: Is Bitcoin truly the kind of currency libertarians have been advocating? Have I misc…

I have a very difficult time separating "true" libertarians with members of libertarian parties. Like people don't readily give up how pragmatic they are. On one end, there seem to be people who really yearn for pure individual freedom with no government at all. I'm pretty sure that was tried for the first 50,000 years of humanity and the results are well documented. (spoiler, for populations larger than ~100 people, your chance of ending up a king's subject is >99%) The other end doesn't seem to mean anything concrete, other than a distaste for OSHA or environmental laws.

Anyway, I think most Libertarians would be cool with a handful of ultra-wealthy, because they really think they can conquer the market someday and be one of them.

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#48

Post by pc86 »

FLUX-YOU wrote: post #16
davidmr wrote: post #7

Earlier quoted context omitted.

Is there any currency or commodity or derivative for which that statement is not true? It seems self-evident that if you own a lot of something like gold, dollars, BTC, sterling, etc. and you sell it, its value relative to what you're selling it for declines.

I'd bet that large holders of gold sell small amounts all the time without the market going nuts and kicking off volatility swings. But I could be wrong. It's less the mechanism and the implication that people imply by following whales. Why should a store-of-value market react when someone sells a small amount regardless of their current holdings?

I agree with you but this is an apples to oranges (or perhaps apples to 747s) comparison. The top 1000 holders of gold don't have anywhere near 40% of the market. Not to mention that 40% of the market for BTC is only a few million coins.

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#49

Post by knocte »

simias wrote: post #20
marsrover wrote: post #2

I really enjoy investing in cryptocurrencies. However, I have a lot of doubt this is going to make the world a more fair or better place. It's going to create a wealth gap like has never been seen in first world countries.

It seems pretty obvious to me as well. Given huge speculation surrounding them at the moment I'm surprised we don't hear more people warning about these things. I don't think I want to live in a world where BTC replaces the USD/EUR/... Untraceable money means that corruption and tax evasion would be easier than ever. Democratic governments would be worse off in dealing with that, because unlike totaliatrian regimes t…

> Untraceable money

Bitcoin is not untraceable money, it can be even more traceable than normal currency. It could be stablished as a law that public money when being spent in the blockchain needs to be auditable by the people (identities of sender and recipient known), and this way you would end up with even less corruption than the current system.

> Deflation means that the rich will get richer

Wrong. Rich people don't have money, they have holdings. Most of the holdings that rich people nowadays have are not money. Deflation just benefits the savers, as opposed to the spenders. Some savers might be rich but not all. Incentivising saving instead of consumption may make the planet a bit greener. Plus, if one day we stop measuring cryptocurrency value with a fiat-unit of measure, maybe we find out that the cryptocurrency value is actually the stable value. The asset that is not stable is the fiat currency because it's being depreciated all the time. The day all stores in the planet denominate prices in cryptocurrency, the bad consequences of deflation (hoarding for the sake of profit) will be almost imperceptible.

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#50

Post by theorique »

simias wrote: post #20
marsrover wrote: post #2

I really enjoy investing in cryptocurrencies. However, I have a lot of doubt this is going to make the world a more fair or better place. It's going to create a wealth gap like has never been seen in first world countries.

It seems pretty obvious to me as well. Given huge speculation surrounding them at the moment I'm surprised we don't hear more people warning about these things. I don't think I want to live in a world where BTC replaces the USD/EUR/... Untraceable money means that corruption and tax evasion would be easier than ever. Democratic governments would be worse off in dealing with that, because unlike totaliatrian regimes t…

BTC is not "untraceable money". Everybody has (or can have) a copy of the blockchain, which is the cryptographically signed and verified ledger.

If anything, it is more traceable and public than physical cash. The difference is that you don't know who 63dca1f6eddfb659d71ec5244ab950a4 or e3557c1e589e2a687f6afe1a253196ca are. But when you do associate a person with a given key, that association probably persists over time.

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