Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
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A fundamental tenet of investing is buy low, sell high. So if we view these coins as investments, we would expect the larger holders to cash out on price rises, and buy back in on dips. And generally to lighten holdings as price trends higher. Because the wealthy could get trapped in an illiquid investment if they end up owning most of it at a very high valuation.
Also if we view these coins as cash, we would expect the wealthy would not hold most of their wealth in cash.
However, if we view a coin as the money system of society and we view control over the coin akin to control of a central bank, then we can expect the wealthy to obtain the majority of the shares of the central bank. As far as I know, this is in fact what they did in the Bank of England and the creation of the U.S. Federal Reserve.
Also if we view these coins as cash, we would expect the wealthy would not hold most of their wealth in cash.
However, if we view a coin as the money system of society and we view control over the coin akin to control of a central bank, then we can expect the wealthy to obtain the majority of the shares of the central bank. As far as I know, this is in fact what they did in the Bank of England and the creation of the U.S. Federal Reserve.
The important thing here is the stakeholders perception. Empirical observation shows that stakeholders are viewing their stake as an investment, not as a stake of the future money system.
During the ascension of the coin, they don't make theirs decisions as if they had a stake in the money system of the society, they make their decision as if they had a normal investment. So they sell when the price increase. And by the time a cryptocoin will become the money system of society, the bigger stakeholders will be vastly diluted by their own profit taking and risk managing.
Central banking was not instaured because the wealthy has most of the money supply but because of political coercition. The wealthy were not wealthy enough to control the money supply by themselves, so they use coercition to obtain that control.
They control all the fiat and credit of the world via the Central Banks. I surmise they can surely buy up a PoS system, transferring their control from existing fiat to this new fiat PoS system.
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If there was some profit to be made from processing blocks in PoS, then there would be a profit motive for obtaining more shares in the currency. Otherwise, the interest in monopolizing PoS shares will only come when the currency is a dominant political and economic factor in the real economy. At that point, the wealthy buy up say 50 - 80% of the shares, then the remaining shares become the cash in the economy and the wealthy hold their shares as if they are shares in a central bank. The point is that nobody will sell off the currency at this point because it is the dominant one. At that point, you are right back to a fiat system. Buying up that 50 - 80% share would likely drive the price higher, thus further cementing the dominant role in the economy and the lust to hold it. If they do this as a transfer of dollars to the coin, i.e. hyperinflation of the dollar, then there is no dollar to return to any more.
Neither NXT or Bitshare will be profitable for miners, see this thread for NXT https://bitcointalk.org/index.php?topic=458036.0. The ROI for NXT "mining" will be something like 0,05% per year, no incentive to hoard here. I don't understand the technical detail but I know Bitshares will implement also something that will make mining unprofitable.
Tragedy of the Commons. These systems won't be secure. Their designers are Communists disguised in Austrian economics facade, i.e. wolves in sheepskin.
How can PoS attain similar marketing and adoption?
For instance the distribution of PTS is done by POW mining, and PTS give a stake in Bitshares, which is PoS. So with Bitshares you have a PoS coin where coin distribution is done by mining. The best of both world.
Sorry this is not the "best of both worlds". This is a Frankenstein combo. The perpetual security of mining and ongoing (small, reasonable, annual percentage akin to gold's debasement rate) redistribution of wealth from the upper 1% to those who apply their ingenuity, risk, and effort to provide the security is replaced with a Tragedy of the Commons which is precisely the power vacuum chaos that will demand a leader step in and take control, i.e. fiat.
Bitcoin has similar Tragedy of the Commons problem, because new coin rewards decline and are replaced by transaction fees. I have explained this exhaustively already, so I won't repeat the argument.
Also when Bitcoin was mineable with a CPU, only a tiny fraction of the population was aware of what's going on. I think it's quite possible that today more people have the possibility to have a stake in a PoS coin via an IPO, than people had the possibility to mine Bitcoin in 2009/2010.
A one time event, like a land rush for money. Brilliant.
They have no clue about the Austrian theory of how money comes to be adopted, nor any sane logic about how to make a coin that sustains adoption and security growth ongoing.
Recently roughly 2m$ were burnt for the distribution of XCP. I think a lot less than 2 millions $ were spend in BTC mining materiel in 2009.
Scams abound now.
Furthermore we can except that several dozen m$ will be dedicated for the acquistion of Etherium coins.
I thought it was a PoW coin. Are they doing a land rush sale of a pre-mine? Or do you mean invested in mining it at launch?
Today if more ressources are devoted to coins acquisition than before, it's because there is more awareness among the crowd. More ressources devoted to coin acquisition mean today's coin (included PoS coins) start with a level of marketing/adoption which is way higher that the first PoW coins had.
Agreed. But this should be done through competitive mining, as this is a decentralized security and money model ongoing.