How Bitcoin Is Like North Korea
North Korea's Korean Central News Agency/AP
In it, he makes an important observation about the extreme inequality in the
The uneven distribution of Bitcoin wealth may be the price to be paid for getting a rapid dissemination of the Bitcoin payments and store of value technology. If you build a better mousetrap, everyone expects you to profit from your invention, but users benefit as well, so there are social benefits even if the innovator grabs a big share.How problematic is the unequal distribution of Bitcoin?
If you harbor the notion that Bitcoin is an alternative to the US Dollar/Fed system (as many diehard Bitcoin true believers do) then this seems very problematic, as a world where Bitcoin became the primary unit of exchange would be a severely unequal one.But if you see Bitcoin as just a payment system that augments the US Dollar - but doesn't replace it - then it's not clear how bad it is. Severe inequality in any given country has social problems because there's no easy escape from that world. Nobody is forced to live within the Bitcoin system, so it's not going to create the same kinds of social problems. This is a bit like the concerns that Bitcoin is deflationary, because the supply is fixed. This would be a problem if a country adopted Bitcoin and everyone were forced to use it... then that would create an incentive for everyone to horde, and commerce would grind to a halt. But since participation in Bitcoin is a fluid things (you can quickly enter into and out of Bitcoin participation) the deflationary aspect is there. As we've argued before, holding Bitcoin is in some sense holding equity in Bitcoin (even though it's not exactly a company). Thus talking about the Gini coefficient might make as much sense as talking about the Gini coefficient of, a public company, which has a combination of ultra-large individual and institutional shareholders and then a series of irrelevantly tiny minnow shareholders. Does that unequal distribution matter? Eh, not that much.
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