Sunday, 10 October 2021

The Future of Bitcoin: the "Poverty Ratchet"

 In zoology and population genetics its a well established fact that small populations are much more vulnerable to extinction than large populations. Its a simple feature of resilience that large populations can survive a much larger mortality event, or crisis than small populations. A large population after all is just a collection of smaller populations and so to make it extinct a number of small populations must go exist. And this ignores any emergent properties from those smaller groups interacting.

And so it is with Bitcoin. The poor are much more likely to go bankrupt in life and need to sell those bitcoin than the rich. And the rich have much more disposable income to invest than the poor and so on average will be the ones who buy up bitcoin. And so, as in Capitalism, as time progresses simply by the laws of probability the wealthy will end up owning all the bitcoin. The only bitcoin held by the poor will be that small, highly volatile subset of bitcoin that are changing hands.

The principles of Capitalism destroy everything and create inequality and poverty in its wake no matter what vehicle is traded.

I'll call this the "Poverty Ratchet."

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