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Comment by throwaway82652 | Hacker News Reader

>If you study the history of bitcoin (or were around and paying attention), it wasn't at all designed as a cult or a scam.

I'll have to disagree there, go take a look at Satoshi's net worth. I'm honestly amazed the crypto community hasn't come out unilaterally against the concept of premining and ICOs because if it works the way it's supposed to, there is no way it won't end up as a scam where the founders of the token end up staying richer than everyone else. I mean we've seen this over and over again.

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I'm definitely not a supporter of cryptocurrency, but it's fair to defend Satoshi here. They did not pre-mine bitcoin. They released the software and started mining. Anyone else could have joined in at the beginning, Satoshi did not pre-allocate lots of coins, unlike just about every other coin.

Now, the end effect is still similar: the early adopters got the lion's share of the coins and the 'cult of bitcoin' is trying to lure in greater fools so that they can cash out, but I think that Satoshi's motives weren't greed. They had a clever idea (however flawed the economics were) and implemented it. Everything snowballed from there.

Perhaps Satoshi was appalled by what they had created, and that's why they've disappeared?

I don't blame Satoshi. Though maybe the whole thing would have needed bit more consideration on long term viability.

Those who came relatively shortly after that... Yeah, I saw enough those who were there to be the next plutocracy...

>They did not pre-mine bitcoin. They released the software and started mining. Anyone else could have joined in at the beginning,

I'm sorry but this is a bogus statement. I can't stand when people say this, it's an empty statement, it's like saying "anyone could have founded Amazon". Yeah maybe that's technically true but it didn't happen and the chances of it happening to anyone else were extremely small. The basic facts are this:

- most people are not ever going to become miners, anyone launching a cryptocurrency knows this full well

- bitcoin was designed to make mining harder and harder over time, making it much easier for early adopters to mine

- bitcoin was designed to be deflationary

Combine those things, and you get a system where the founders and early adopters are practically guaranteed to gain more wealth than everyone else, like to the point of ridiculous imbalance. And if you have an unpopular token in the beginning it's the same thing as a premine. I don't think this is exactly controversial to point out that bitcoin was designed to multiply the wealth of the HODLers, that's the only reason anyone still cares about it.

Amazon is not a scam and anybody could have founded it. Both those statements are true so I’m missing the analogy.

>anybody could have founded it

No they couldn't? At bare minimum: A lot of people were babies or were not even born yet when Amazon was founded. A lot of people were not in the financial position to go do a startup in the 90s. A lot of people did not have computer science or business skills at that time (and still don't). A lot of people just did not ever care about buying and selling books online. I'm sure you can think of a lot more examples here.

And if Amazon was trying to push a new AmazonBucks cryptocurrency as the new global currency with Jeff Bezos holding a large percentage of them, then yes I would probably call it a scam. Remember when Facebook basically tried to do that a few years ago?

Yes, people born in the 1400s couldn't have founded it..good point? I think it's pretty obvious that I didn't mean literally everyone (the unborn, dead, sick, disabled etc). In your post you even said it's "technically true" that anybody could have founded Amazon, so I'm not sure why you're trying to get me on an obvious technicality here.

Again, the reason bitcoin is a scam and Amazon is not, is because Amazon is not trying to promote themselves as a currency. Regardless of their stock price or how rich the founder is, Amazon is still a productive company that does useful work.

Sure you could make that claim but not sure how a comparison to Amazon furthers it. Bitcoin is a currency and therefor a scam, Amazon is not a currency and therefor not a scam?

No, neither are currencies. Cryptocurrencies try to promote themselves as currencies, but they're actually not, and they can't ever function that way, for a number of reasons.

> I'm sorry but this is a bogus statement. I can't stand when people say this, it's an empty statement, it's like saying "anyone could have founded Amazon".

It's true. The software was freely available. Anyone could have run it at the start. Back then, you didn't need specialised hardware. That's a far cry from founding and running a company, I don't understand how this even compares to Amazon (and anyway, Amazon does useful things!)

Now, there's a huge world of difference between saying anyone could have mined bitcoin at the beginning, and everyone could have mined bitcoin at the beginning. As I said, and you seem to agree with, the economics hugely favour the early adopters.

> Yeah maybe that's technically true but it didn't happen and the chances of it happening to anyone else were extremely small.

It's not a question of chance, it was simply a matter of running some software, and being there first.

> you get a system where the founders and early adopters are practically guaranteed to gain more wealth than everyone else, like to the point of ridiculous imbalance

We're in complete agreement here. But back then, no-one seriously thought bitcoins would be valued in the thousands of dollars. I doubt Satoshi released bitcoin and sat back thinking "now I'll become a billionaire".

Now, everyone is into cryptocoins for the money (hence all the identikit coins out there)

I wonder how bitcoin would have fared had it not been released with the deflationary logic built in. I suspect it would have been pretty similar. Ethereum has no cap on coins, other than a built-in 'difficulty bomb' that the developers repeatedly keep delaying...

>It's not a question of chance, it was simply a matter of running some software, and being there first.

And yet many people were still not there, because you have to be a super nerd to even care about this stuff to begin with, never mind go through the bother of:

- Figuring out what "mining" actually is and why you should care

- Correctly running some random unproven open source code to do it

- Manage the wallet and figure out how to actually trade with somebody else

- Follow all the other super nerds who are doing this to make sure you're not doing it wrong

It goes on and on here, none of this stuff is obvious to people who weren't already familiar with what was going on here and had enough obscure cryptography knowledge to understand what anybody was even talking about. And it's still not obvious, most people "investing" in crypto still have no idea about any of this stuff. I'm not particularly interested in commenting on the founder's intent because it doesn't matter much here. The outcome is still going to be the same.

>I wonder how bitcoin would have fared had it not been released with the deflationary logic built in. I suspect it would have been pretty similar.

Well yes, because basically every other cryptocurrency including ETH still favors the HODLers for a lot of other reasons.

> Satoshi did not pre-allocate lots of coins

By designing half of all bitcoins to be emitted in just the first 4 years, they ensured that early miners like Satoshi would end up with a large slice of the pie.

Uh, the bitcoin community has come out unilaterally against the concept of premining and ICOs. Bitcoiners fucking hate that shit and have been heavily criticizing it from when it first started. Which was substantially after bitcoin started, i.e. literally years later.

What you need to realize is that the bitcoin community != the crypto community.

Bitcoin was not premined and did not have an ICO.

It's weird to talk about "Satoshi's net worth." Satoshi may not have been a single person, may be dead, and anyway, it doesn't look like those coins will ever be spent, so if Satoshi is alive, he hasn't profited financially from the coins he mined and is presumably living a poor or middle-class life, unless he happened to be independently wealthy before---but we'll probably never know.

I do realize that, that's why I explicitly said the crypto community and not the bitcoin community. You misunderstand. And I would consider Satoshi's early actions to be functionally the same as premining, and there are lots of other people besides Satoshi who got rich through the same actions. So I don't think you can actually say the bitcoin community is against it in practical terms either, otherwise they would have stopped using bitcoin or forked it long ago to remove the unearned wealth from the early miners. The fact is, they actually can't do that, because the super wealthy already control the bitcoin network, and the community does not.

>Satoshi may not have been a single person, may be dead, and anyway, it doesn't look like those coins will ever be spent

I hope you can also see how this is precarious and irresponsible of the bitcoin community to allow this situation to continue, you just have to hope that this anonymous and unaccountable billionaire (or group of billionaires) is dead or benevolent, because if they aren't they could seriously screw up the network.

Go with independently wealthy, and probably highly engaged in other pursuits. That’s a massive amount of potential money sitting there.

Of course, if you can trace the coins’ motion, cashing in may break anonymity too, so maybe they need to sit there like the money bag in Get Shorty.

You should absolutely examine every coin and token's premine, distribution, issuance policies, caps, and the control and malleability of those over time.

But you're barking up the wrong tree here. Bitcoin is one of incredibly few cryptoassets with no premine. I hesitate to say only because I don't keep track of the myriad uninteresting derivatives. You could have been Hal Finney or someone else as equally receptive and enthusiastic on the open mailing list right from the outset.

We don't know that there is no premine. There were very many blocks early on that are thought to have been mined by Satoshi. He/they could have discarded the key or could emerge sometime in the future and cash out.

You can directly inspect the Bitcoin blockchain. The genesis block pointedly includes the headline it does to demonstrate it could not have been created before 3 Jan 2009.

After that date the blocks Satoshi produced, as a requirement to process and validate transactions to bootstrap the network were simply mined not pre-mined, in a manner open to all.

They could indeed transact in the future. Although I suspect at this juncture should that ever occur it would be to make a political statement since I find people of that intellectual bent tend to be poorly motivated by base material wants. Anyhow, that's pointless gossipy speculation.

Ah. Yes, I had in my mind a sloppy, incorrect meaning of “premine”.

My point remains the same for questioning the intent of the founders. We have no idea what Satoshi might do with the power he has in the form of early blocks.

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