Quote from: galambo on February 22, 2013, 04:30:58 AM

OpenCoins decision to go with an 80%/20% distribution, similar to Freicoin except we give our 20% to the miners, and the discussions which have occurred since have caused me to start thinking about the philosophy of this choice. I have come to the conclusion that a pre-mined distribution, as long as it is done fairly, is more decentralized than Bitcoins mining subsidy.

Bitcoins mining subsidy guarantees that a very small number people will have Bitcoin: those who are technically capable and have a low self-evaluation of the value of their immediate time. I understand that may seem harsh or a difficult opinion to read. This is not to diminish the efforts of Bitcoin miners, because from the Gold Mines of Alaska to the Oil Fields of Texas some of Americas greatest wealth was made by people fitting this description. However, if your goal is to distribute a new currency to a broad cross-section of the worlds population then this is not the way to do it.

Mining subsidy is a design choice and not a moral certainty. There is no scientific principal by which a person can claim the original design for Bitcoin subsidy is superior to a "premined" coin with a fairly administered initial distribution. A choice to award X units of currency to the person who mines a block is completely arbitrary. The block reward should fundamentally be understood, by all Bitcoin users, to be one of the most obvious and common changes made to a new cryptocurrency. Altering this scheme should not be thought to be fraud unless there is direct proof that the scheme declared is unfair by definition.

Subsidy is so important in mining it promotes the creation of large mining pools which increase the centralization of Bitcoin. It turns out, with the subsidy being the reason for Bitcoins existence for many, that the culture around Bitcoin has organized itself around collecting the subsidy and nothing more. I am describing the meta-stable arrangement where all of the mining power is concentrated in the hands of just a few web-savvy administrators, or mining pool operators. With the arrival of ASIC miners this situation is expected to become even worse. Miners are encouraged to pool their computing power for no reason but to lower the variance of the subsidy. There isn't any other technically justifiable reason for pools. For example, we do not see mining pools with protein folding computer services. Clearly this is not a possible end state for Bitcoin and services like p2pool are part of the remedy to this problem. A new definition for cryptocurrency is another possible solution.

Just to be completely clear, Freicoin is not anti-miner: Freicoin's strategy is to initially distribute with low mining subsidy, and to reward miners long-term with a demurrage award of 5% of the currency per year.

I hope the discussion in this post has helped to explain why Freicoin, and by extension OpenCoins Ripple, has chosen to distribute some of the coins without mining. I believe that Freicoins distribution will be done in a fair manner, and believe at the moment that OpenCoin has the same intentions.

Let's be generous. 10,000 miners vs. 7,000,000,000 billion people on the planet. 1 in 700,000 people on the planet actually mine. Of that a smaller percentage and that can be calculated I guess get the lion share of coins and that number will continue to drop as ASICs come online. Fewer and fewer people with more concentrated hash power on machines that are virtually useless for anything else but mining bitcoin.

Compare that to XRP where they can distribute XRP to a much wider range of people in different languages and via different platforms like phones, tablets etc. I bet they can and will distribute the coin over a wider base faster and more economically than Bitcoin simply do to the electricity that has already been consumed for the mining.

If you dispute it give me the exact numbers for bitcoin and then tell me how anyone with half an idea couldn't distribute coin more equitably? Even if you distributed every account on say Facebook an equal number of XRP you would still do better than bitcoin. Alot better infact even with the massive number of double accounts.