[FoRK] bitcoin as a global medium of exchange (was Re: Interesting take on Sanjuro's Assassination Market)

Eugen Leitl eugen at leitl.org
Wed Nov 27 02:34:20 PST 2013


----- Forwarded message from Lodewijk andré de la porte <l at odewijk.nl> -----

Date: Wed, 27 Nov 2013 11:06:00 +0100
From: Lodewijk andré de la porte <l at odewijk.nl>
To: Ted Smith <tedks at riseup.net>
Cc: "cypherpunks at cpunks.org" <cypherpunks at cpunks.org>
Subject: Re: bitcoin as a global medium of exchange (was Re: Interesting take on Sanjuro's Assassination Market)
Message-ID: <CAHWD2rJxvzTVvm9QB0psOZop-iTDuR8T6qPyuMXKEpZHgLtx9g at mail.gmail.com>

2013/11/27 Ted Smith <tedks at riseup.net>

> I'm not sure how you're evaluating his "investment," which was solving a
> number of previously-thought-unsolvable problems in applied cryptography
> in a way that became wildly popular, widely used, and enabled a large
> amount of very influential services.
>

Then how can you say his work was published into any sort of market?


> Contributing to the world in such a manner rarely results in such
> wealth, but I don't see why it shouldn't.
>

Okay. Let me explain it a little bit.

Satoshi (and maybe some buddies in the very-very-early days) is (are?)
estimated to have 1.5MBTC (M for million, m for milli, k?). That's worth
about 900MEUR now. Let's make a generous assumption, that Satoshi started
working on Bitcoin right after DigiCash bankrupted (1998). That assumption
is a bucket of nonesense, I think 2/3 years would be more right.
Thebitcoin wik<https://en.bitcoin.it/wiki/Satoshi_Nakamoto>i
tells us he "has claimed that he has been working on Bitcoin since 2007",
the Bitcoin software was released 2009. Paper distributed in 2008.

Okay so: 1.5MBTC for 2 years. I doubt I'd have to show you that no other
scientist, no matter his contribution, got quite that amount of money for
his efforts. In fact most scientists waive what little they get because
they do not need it (their dedication is to science, not to carnal
pleasures). 1.5MBTC for 11 years is still a pretty high salary. But this is
in "employment terms".

If we compare to people like the creator of SnapChat, a hyperflawed
consequence free multimedia application (media is deleted after being
viewed for a specified amount of seconds), who's product is apperently
worth 4 billion on a functional market. We're doing okay right now, because
something far more usefull (it is) is priced at 1/4th of the price of
SnapChat.

However if you believe Bitcoin will stay at around 600 euro's (oh wait it's
700 today already, haha) than that's quite strange. If you think it'll stay
at around 4x more (2400) than you're probably still thinking quite
strangely. See, Bitcoin has a very unusual market mechanic. And Satoshi is
rewarding himself in how much the system is used, the sum of all banks his
software replaces will be his money. But nobody is paying him directly and
his efforts are definitely not a markted good.

Why shouldn't it? Because if satoshi lives in a huge home, spending freely,
with several people assisting him in whatever whilst owning some companies
that'll do things he deems important (squirrle rescue patrol, private
police, education, art displays, helping the poor, etc) then he didn't need
this much. Having this much of what might become world wealth simply isn't
reasonable for what the money stands for. Somewhere I feel it unfair that
someone who works at the top of his abilities in a more profitable field
gets paid more, but it isn't actually unfair. But the amount of buying
power that Satoshi now represents is so exeedingly vast, and will be so
much vaster, I cannot fantom it "fair".

The best we can go for is the amount being "realistic" and "result of a
fair and honest process". And I think that because a buyer of Bitcoin has
no reason to be interested in economic or Satoshi, just in his personal
profits, we have a game-theory situation where Satoshi is paid in a way
that nobody is interested in observing. After all, every Bitcoin you buy
makes the Bitcoin scarcer at your expense and Satoshi profits. And because
of this game theory problem I don't feel there is a market-related effect
being placed on Satoshi's efforts.


The bottom line is: wealth distribution fairness was never a core design
goal of Bitcoin.

----- End forwarded message -----


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