Post
Topic
Board Speculation
Re: Bitcoin trades the inequity of dynastic power for the inequity of early adoption
by
Red
on 15/04/2013, 21:19:04 UTC
Meh, here's the thing about having a lot of bitcoins. If you don't spend them, there's no difference. If you do spend them, you get cool stuff but you also have less bitcoins (and somebody else has more).

It's not like the current situation where the rich can position themselves at the output hopper of the printing presses and fill their pockets at will with the proceeds of your savings account.

This argument has gotten repeated on this site since its founding. That doesn't make it logical or correct.

Suppose Satoshi had decreed that their shall forever be only 10,500,000 bitcoins instead of 21,000,000. And instead of deciding to spread the generation over multiple 4 year periods he decreed that all coins would be distributed in the first 4 years. Or in other words, what if the initial distribution of bitcoins was already finished. Everyone in the world had to work with the bitcoins that already exist today.

Now what mathematical law will forever dictate the value of each bitcoin? It's pretty simple and not at all rhetorical. Each bitcoin's value becomes proportional to the total value of external goods/services that humans wish to exchange among themselves using bitcoins to facilitate that exchange.

Current bitcoin owners want to exchange a certain amount of external goods/services among themselves right now. These same people likely have the potential to exchange more external goods/services among themselves. (They could sell each other their cars and houses.) But that group has a finite upper bound. Taking the group of bitcoin owners as a whole, they only own so much stuff. All the upside comes from people who DON'T currently trade their external goods/services using bitcoin.

So say I have 1,000,000 BTC today. That's $100 million today. Say I want to spend $1 million a year. That doesn't mean my BTC will be exhausted after 100 years. The more noobs I convince to use bitcoins the more value my coins have. If the value of BTC goes up exponentially then the number of BTC I have to part with is reduced from linear to logarithmic. In other words, I couldn't spend them all if I wanted too.

That is why with Gold as a currency and land a property Royal families could say Royal for generations.