Bitcoin brings together ideologues from all ends of the spectra – and not to mention a few normal people, too.
Ostensibly, everybody can find something good, and bad, about Bitcoin.
Recently, many individuals have been posting about the unfair distribution of Bitcoins, thanks to the inherent transparency of the protocol which allows us to observe the largest wallets – certainly not indicative of individual holders, but at least a proxy into the coffers of the early adopters.
As Bitcoin undergoes its 4th (or 5th?) bubble bursting, it may make sense to evaluate the inverse inevitability of the process: A high Gini Coefficient, a measure of the inequality of assets among a group of people, also necessitates an overrepresentation of losses on behalf of those who own a larger portion of Bitcoins. I would like to direct the following questions to those who believe that the distribution of Bitcoin is somehow unfair:
1) I have personal friends who have lost over $50 million “on paper” over the last couple of days. Do you think that this loss is unfair?
2) I know at least 2 individuals who have invested over $100,000 in USD in Bitcoin when it was $1,000 per coin. They have also lost a significant amount of capital. Was this unfair?
3) As the price grinds lower, the Bitcoins that were so inaccessible yesterday have drawn within reach. Perhaps this is an opportunity for those who did not previously score highly on the Gini curve to accumulate more coins. Would you agree?
Depending on your reaction, I hope that you will at least consider the possibility that unfairness cuts both ways. The word “risk” is used relatively loosely in normal conversation, but in the financial world it is very precise. What appears to be somewhat axiomatic, regardless of the political system, religious system, or social system, is that risk and reward are intertwined – two sides of the same coin.
I sympathize with those who view financial inequality as corrosive. But somehow I cannot agree. I’m more concerned with how the poorest fare on an objective basis. Do they have food? Do they have shelter? Do they have a 50-inch television?
Bitcoin is designed to be fair, in the utmost sense. It doesn’t play favorites, cannot be arbitrarily allocated, and isn’t controlled by a human. Most importantly, nobody is forced to use Bitcoin. If you don’t like it, you are welcome to abstain, and even encouraged to do so if your appetite for risk is low.
Could it be that the Bitcoin distribution is fair?