From: Lodewijk andré de la porte <[email protected]>
2013/11/27 Ted Smith <[email protected]> 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 wiki >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. BRAVO! A magnificent explanation, and I agree in all the details. The design of the Bitcoin system contained hidden 'features' (for Satoshi) that were designed to earn him the 'seigniorage' http://en.wikipedia.org/wiki/Seigniorage of a rather large portion of the Bitcoins issued early in the process. Accident? I don't think so. I've already said that I think Satoshi's entitled to about $1 billion (USD), approximately, as reward for what he has done. Which, about now, he has received. (At current Bitcoin prices, or at least as of a month or so ago.) But, as you also noticed, the situation isn't static, and he is virtually guaranteed far more value if he simply doesn't cash-in his current Bitcoin holdings. This isn't market-driven: It is algorithm-driven, defined by the assumptions and decisions baked into the software Satoshi 'so generously' (<AHEM>!!! Sarcasm-warning!) provided the world. Had just a few things been changed, the amount he could reasonably have expected to 'earn' would have been very different. Bitcoin should have been harder to 'mine' at the beginning than it was; Bitcoin should be easier to 'mine' now than it actually is. I think that it is the ratio of these difficulties which define how much advantage an early-adopter has had over those who came later. This difference is not defined by a law of nature, it is defined by algorithm and software. And I strongly doubt that many people (other than Satoshi) realized this in 2009. Jim Bell
