When it comes to being anti-establishment, Bitcoiners and cryptocurrency fans are in an uproar. You can see them bashing the dollar, the euro, and other fiat currencies and calling them a scam and a means of widening the wealth gap. The claim is world’s reserve currency, i.e., the dollar, is in the hands of a corrupt federal reserve, and it’s injecting it wherever the Federal government of the U.S. is finding to be fit.
Meanwhile, They’re extremely concerned that this immense power will lead to the broadest wealth gap in history. Having the top 1% percent receive most of the currency injected into the economy.
As Anthony Pompliano (A well-known Bitcoin promoter) puts it:
Another somewhat extremist Bitcoiner named Max Keiser also says:
These claims are the essence of bitcoin promotion; Because bitcoin is said to “dethrone the dollar” and sit on the throne as the new high king of currencies! And bitcoiners are the true knights of this new coming king who pledge their allegiance to his noble cause.
No one would disagree that closing the wealth gap is indeed a noble cause. The fear of this enormous wealth gap is a concern for most people. Imagine living “paycheck-to-paycheck” after years of hard labor. Meanwhile, a newbie on Wall street is earning your entire salary just by speculating on some meme stocks in a week!
But in this skirmish between disadvantaged people and the ultra-rich, Bitcoin is in NO WAY the king. It’s merely a clown!
The proof for that is Bitcoin’s awful wealth gap within its own system.
Satoshi Nakamoto is said to have 1 Million Bitcoins! It’s 1 out of 21 million Bitcoins ever mined!
Surprisingly, that mining Bitcoins was done almost without any cost by a simple laptop or a PC!
If Bitcoin were to be the dominant reserve currency, It would mean that Satoshi Nakamoto owns ~5% of all purchasable goods and services in the entire world economy!
Besides, about 40% of all Bitcoins are in 1,000 digital wallets. That would mean 1,000 people or less holding Bitcoin till its enthronement, would own 40% of the world economy!
How could anyone conclude that Bitcoin can fix the wealth gap while it is suffering severely from it?
Bitcoiners might say: “If Satoshi spends some of his 1 million bitcoins, he will not possess them after that. Transferring wealth from Satoshi to the producers, and thus fixing the gap. Unlike the dollar system, which is continually supplying the rich with newly created dollars, the supply of bitcoin is limited, and this will circulate the wealth back into the economy.”
But this is not the entire story. Deflationary currencies, like Bitcoin, increase in value while the economy is growing. Let’s consider this simple example:
Suppose the entire economy is a big cake. The cake is sliced into 100 pieces, each piece having a note indicating its owner. So that would be 100 cake slices and 100 cake notes. Consider the whole cake to be 10 pounds (~4.53 Kg). One slice would be 0.1 pounds (~45 g), and the owner of 1 cake note can take 0.1 pounds out of a cake.
If the cake grew to be double the size (remember the cake is the economy and economies can grow), Now the cake is 20 pounds (~9.07 Kg), and each slice is 0.02 pounds (~90 g), and the owner of 1 cake note can take 0.02 pounds from this cake.
Suppose Satoshi owned five slices of this cake. Each year on a Bitcoin standard would mean Satoshi is getting a heavier cake than last year, and that’s all for mining Bitcoin on a laptop. He can live like an absolute monarch while other people have to work like slaves to fulfill his entitlement to the 5% of the economy!
If we consider the GWP (gross world product) to be the entire world economy, 5% of that would be approximately 5 trillion U.S. dollars!
Let the reader decide:
Is providing 5 trillion dollars worth of goods and services for a man mining digits on a laptop, slavery, or a choice!