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It's time for an inequality index for cryptocurrencies distribution

news.ycombinator.com

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Re: It's time for an inequality index for cryptocurrencies distribution

#41

Post by ur-whale »

EMM_386 wrote: post #27
atmosx wrote: post #13

> This concentration not only risks to threaten blockchain's own premises [...] BTC was designed specifically to avoid any kind of _state control_ and by _state control_ I mean something along the lines of a central bank. Adding protections here and there will inevitably lead to a system that is similar to current financial system with all the bells and whistles. I think you're missing the point: BTC tries to sell la…

The silly thing is that crypto is now following the stock market for the most part, at least the big coins like BTC/LTC/Doge/etc are. Market goes down, crypto seems to go down with it. Look at something like 1-month BTC and 1-month APPL or something. It's not supposed to be doing this. I think this is happening because it's become so easy to purchase that people now just have it in their "portfolio", basket of everyt…

> it is getting tied into the existing financial system

The fact that its price somewhat correlates with the stock market and the fact that two parties can exchange bitcoins without any government being able to prevent the transactions from happening are two entirely unrelated things.

What's more, the first matters little (only because volatility can sometimes be annoying), while the second is an essential, even defining property of the system.

> It's not supposed to be doing this.

Why not? Again, Bitcoin was designed to solve one problem: allowing economic entities to exchange value freely.

Other than - maybe - the fixed supply, nothing was ever built in the protocol to control its price.

Re: It's time for an inequality index for cryptocurrencies distribution

#42

Post by ur-whale »

micromacrofoot wrote: post #31
maxwell86 wrote: post #18

Earlier quoted context omitted.

bitcoin has no banks, period.

right, most people keep their crypto in exchanges which are definitely not just worse banks

> most people keep their crypto in exchanges

Do they?

What is your evidence for this?

Also, if we assume they do, well ... their BTC is now potentially subject to seizure, hacking, fees, bankrupt exchanges ... well, their choice.

Darwinism at work as far as I'm concerned.

Not you keys, not your coins.

Re: It's time for an inequality index for cryptocurrencies distribution

#45

Post by jonathan-adly »

micromacrofoot wrote: post #31
maxwell86 wrote: post #18

Earlier quoted context omitted.

bitcoin has no banks, period.

right, most people keep their crypto in exchanges which are definitely not just worse banks

source: trust me bro!

Bitcoin maxis literally go insane telling people to take their coins off exchanges. It's part of the dogma.

Re: It's time for an inequality index for cryptocurrencies distribution

#46

Post by marto1 »

So we have an asset that follows a Pareto distribution[1]. Now if one has spent any time and resources investing they'd notice that this holds true for a lot of assets. Bitcoin is really not exceptional in this.

Are you after an asset that doesn't follow that distribution ? Do you consider this a good thing ?

[1] https://en.wikipedia.org/wiki/Pareto_distribution

Re: It's time for an inequality index for cryptocurrencies distribution

#47

Post by tromp »

nbaksalyar wrote: post #2

> 95% of Bitcoin is owned by 2% of accounts The problem is, how do you measure this reliably? I'd wager that a large chunk of 95% of Bitcoin is either irrevocably lost or owned by Satoshi (estimate is at "between 750,000 and 1,100,000 bitcoin" -- and arguably these TXs will never be spent). Simply put, there's no way to differentiate between coins that are just sitting there unspent and coins which no one can access…

Besides inequality in individual ownership of Bitcoin, there is also inequality of acquisition cost. The two are related since lower costs make it much easier to acquire large amounts as demonstrated by Satoshi himself. While we cannot reliably compute individual ownership inequality, all we need to compute cost inequality is the price history of Bitcoin.

Let d_0..d_n be all days in Bitcoin history sorted by price on day d_i. So d_0 is launch day, when Bitcoin was worthless, and d_n is the day when price last peaked.

Plot a graph where x coordinate is Sum 0If Bitcoin were a stable coin then this would produce a straight diagonal line. But not only did the price go up exponentially, at the same time the emission went down exponentially. The extent to which the graph lies below that line is the Gini index of Bitcoin price inequality.

Re: It's time for an inequality index for cryptocurrencies distribution

#48

Post by mrtksn »

atmosx wrote: post #13

> This concentration not only risks to threaten blockchain's own premises [...] BTC was designed specifically to avoid any kind of _state control_ and by _state control_ I mean something along the lines of a central bank. Adding protections here and there will inevitably lead to a system that is similar to current financial system with all the bells and whistles. I think you're missing the point: BTC tries to sell la…

I’m baffled how people miss this even if it’s the mission statement of Satoshi himself: Bitcoin is a tool to prevent wealth re-distribution. It’s whole idea is to ensure that the accumulated wealth is preserved. In 2008 it was against the government bailing out the failed banks but it’s also against any government interventions, including easing the wealth inequality.

In essence, the idea is that if a teenager in 2010 acquired 10,000BTC the society owes him food, shelter and luxury for generations to come.

It’s like being a landlord whom passive income guarantees him and his family a good life with no work when people working their arses off to be able to pay the rent.

Re: It's time for an inequality index for cryptocurrencies distribution

#49

Post by adhoc32 »

paulpauper wrote: post #34

>It is quite famous that 95% of Bitcoin is owned by 2% of accounts. This concentration not only risks to threaten blockchain's own premises, but also exposes minor investors to risk of whales who lead the market and can easily speculate on prices since they can influence the price trends. It doesn't threaten it though. It would only threaten it if miners colluded. Crypto may be manipulated, but so is everything else,…

https://www.youtube.com/watch?v=XbZ8zDpX2Mg

Re: It's time for an inequality index for cryptocurrencies distribution

#50

Post by headmelted »

baby wrote: post #38
paulpauper wrote: post #34

>It is quite famous that 95% of Bitcoin is owned by 2% of accounts. This concentration not only risks to threaten blockchain's own premises, but also exposes minor investors to risk of whales who lead the market and can easily speculate on prices since they can influence the price trends. It doesn't threaten it though. It would only threaten it if miners colluded. Crypto may be manipulated, but so is everything else,…

Jul 16 2021, bitcoin was 30k, today it’s 40k, how is this a deflating bubble?

Because you just picked a randomly favourable date from an escalating speculative asset?
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