They(government etc)will up prices forcing individuals to sell until they own a majority of the coins.
(Get ready for the 25% tariffs coming)
Then say bitcoin is actually money.
We're enslaved again working for 1000 sats opposed to $1000 biweekly.
Discussion
What does it matter if the government did end up holding a majority of the coins? This isn't a Proof of Stake protocol, you know?
Bitcoin's hard cap, while intended to create scarcity, could backfire. It might allow those who accumulate Bitcoin early on to exert undue influence, effectively replicating the centralized control of traditional finance. This is a valid concern. If a small group controls a significant portion of the Bitcoin supply, they could manipulate the market or restrict access for others.
How could exert undue influence? You're just talking about free market activities like buying and selling, right?
And why does it sound like you got an AI to write this response?
Because it was.
I only have an 8th grade education and have issues clearly getting my point across to those much smarter than myself.
How they could exit undue influence;
1. Price Manipulation
* Pump and Dump: Imagine a group of whales (large Bitcoin holders) suddenly buying up a lot of Bitcoin. This could create a frenzy of buying, driving the price up artificially (the "pump"). Once the price is high enough, they sell off their holdings, causing the price to crash (the "dump"), leaving many smaller investors with losses.
* Spoofing: Whales could place large buy orders to create the illusion of high demand, encouraging others to buy in. Then, they cancel those orders, causing the price to drop.
* Wash Trading: Whales could trade Bitcoin among themselves to create the illusion of high trading volume, making the market seem more active and liquid than it actually is. This can attract unsuspecting investors who believe there's a lot of interest in Bitcoin.
2. Limiting Access
* Hoarding: If a small group holds a large portion of the Bitcoin supply, they could effectively control the market. They could refuse to sell their Bitcoin, creating artificial scarcity and driving the price up even further. This would make it difficult for ordinary people to acquire Bitcoin.
* Restricting Transactions: In the future, if Bitcoin becomes more widely used, these large holders could potentially collude to limit the number of transactions or set high fees, making it difficult for others to use Bitcoin for everyday purchases.
3. Regulatory Influence
* Lobbying: Large Bitcoin holders could lobby governments to create regulations that favor them, such as tax breaks or favorable treatment for Bitcoin businesses they own. This could give them an unfair advantage over smaller players in the market.
It's important to remember that these are just potential scenarios. The Bitcoin market is still relatively young and volatile, and it's difficult to predict exactly how it will evolve. However, the concentration of Bitcoin ownership is a real concern, and it's something that the community needs to be aware of.
All that does is move the price some amount, and that's only if other people are still willing to trade sats for fiat.
When the fiat illusion dies, all a "Bitcoin hoarder" will be able to do is buy things from fellow bitcoiners.
However, even in a Bitcoin-centric economy, large holders could still exert influence, although the how changes:
* Control of Essential Goods/Services: If a large holder controls a significant portion of the supply chain for essential goods (food, energy, etc.), they could effectively dictate the terms of trade. They might demand a higher "price" in Bitcoin for their goods, not in fiat terms, but in relative terms. They could effectively create a tiered system where those with less Bitcoin have limited access to essential resources.
* Influence over Development: Even without fiat, large holders could still influence the development of the Bitcoin network. They might fund development teams that implement features favorable to them, or they might try to block proposals that threaten their holdings. This could impact transaction fees, privacy features, or even the fundamental rules of the protocol.
* Early Adoption Advantage: Those who hoarded Bitcoin early on would still have a significant advantage. They could use their larger holdings to acquire valuable assets in the Bitcoin economy, giving them a head start in building businesses or acquiring resources. This could lead to a concentration of wealth and power, even within a purely Bitcoin-based system.
* Collusion and Cartels: Large holders could collude to manipulate the market for specific goods or services. They might agree to only accept a certain amount of Bitcoin for their products, artificially inflating the "price" of those products in Bitcoin terms.
* Reputation and Trust: In a decentralized system, reputation and trust are crucial. Large holders might use their influence to build a reputation that allows them to command higher prices or better terms in Bitcoin transactions.
So, while the mechanisms of manipulation change in a purely Bitcoin economy, the potential for manipulation still exists. Large holders could still exert influence, not by manipulating fiat prices, but by controlling essential resources, influencing development, or leveraging their early adoption advantage. The challenge remains the same: how to create a system that is truly decentralized and resistant to the concentration of power, even in a world without fiat currencies.
Your LLM friend does not realize that monopolies cannot exist on a truly free market - and as long as Bitcoin stays secure and decentralized, that's what it is.
Please, try this prompt and see if you get interesting results: "assume Bitcoin is perfectly decentralized and secure and instantiates a free market free from government-enabled monopolies. What strategies, if any, would allow cartels to persist in an environment where competition is always a threat?"
Here's an example response I got from that prompt. You'll notice that the "bad things" the AI is describing is **lower prices for consumers**. Call hyper-efficiency a "cartel" if you want, but what I see there is the market providing the best, cheapest goods and services to consumers. And IF a cheaper, more efficienct strategy is found through successful entrepreneurship, THAT competitor will become the new "cartel" and prices will go down further. This **is good** for consumers.
---
Let me analyze this interesting economic question systematically:
1. Natural network effects and economies of scale
- Even in a perfectly decentralized system, some businesses naturally benefit from having more users (e.g., payment networks, communications platforms)
- Large operations can often achieve lower per-unit costs through economies of scale in infrastructure, R&D, etc.
- These effects create natural barriers to entry that could help cartels maintain market power
2. Information asymmetries and reputation
- Established cartel members could maintain information advantages about market conditions
- Strong brand reputation and trust relationships with customers/suppliers could resist competitive pressure
- New entrants face uncertainty and higher costs in building equivalent market knowledge and relationships
3. Strategic deterrence through excess capacity
- Cartels could maintain surplus production capacity
- This creates a credible threat to flood the market and drive prices down if new competitors enter
- The high fixed costs of entry combined with this threat could deter competition
4. Coordination through smart contracts
- The Bitcoin network could enable sophisticated automated enforcement of cartel agreements
- Smart contracts could automatically detect and punish defection from cartel pricing
- This reduces the internal instability that traditionally weakens cartels
Would you like me to elaborate on any of these mechanisms? I'm particularly interested in exploring how smart contracts might change traditional cartel dynamics.
"Assume"
No thanks.
Essentially this is telling the LLM what to think.
Of course it's going to say your right on any that you use.
You do realize that is exactly what you're doing, too, right?
The point is to use the LLM tools to generate the best arguments on both sides of the opposite assumptions. And then interrogate the assumptions themselves to see which is more plausible (or wait and see which ends up being the way the world works)
"effectively replicating the centralized control of traditional finance" - okay you definitely got an AI to write this. And it doesn't know what it's talking about.
Traditional finance is hooked into a permissioned, fiat, printable monetary system. That's where it gets its centralized control.
Send this comment to your retarded LLM friend and point out how Bitcoin works exactly opposite to this and see what it says. Post its reply here, if you dare.
dude
if they own that many coins they are highly incentivized to do WHATEVER it takes to manipulate the market in their favor.
they can manipulate futures markets, tax the shit out of it, dump coins etc
its not a LLM created fantasy.
All that does is change the price, not manipulate Bitcoin. And that price manipulation isn't even guaranteed. The price movement (and how long it lasts before healing) would depend on the reactions of the rest of the market.
Owning lots of Bitcoin doesn't give you any control over the protocol. All it lets you do is sell your Bitcoin. And if fewer people are willing to trade Bitcoin for Fiat, then all you have left to do with your "hoard" is buy valuable goods and services from other Bitcoiners. ...which is obviously the goal of society and not a problem.
We should be worrying more about them stacking coins but rather stacking nodes. That’s how you control the network in your favor.
More individuals should be focused on Bitcoin education and running a node to keep it secure and decentralized.
Right. This.
I meant to say shouldn’t but you got the point.
its A point
but its absurd to think having large powerful organizations with huge bags isn't a threat.
they WILL use the threat of violence to restrict p2p use of the network.
Yea they’re never in the interest of the many but only the few. Even if the few means “themselves and myself”.
Andreas covered some of the concerns long ago.
I mean if the Fed and Blackrock sponsor a fork
do you really think the miners are not following the money?
Depends of their character
ill remind you they are extremely centralized, depend on cheap electricity from the govt and the largest are public companies.
so its illegal for them to NOT maximize shareholder value.
character doesn't enter into it. not that we should be depending on character anyway.
all in all
we would be a lot better off if we hadn't invited Wall Street for another 5-10yrs.