The initial distribution of Bitcoin was the most equitable of all possible
While people tend to view initial Bitcoin emissions through current prices and bewildered by the disproportionate asset allocation, Interchange co-founder Dan Held argues that the structure used by Satoshi Nakamoto was the most fair of all available to him at that time. He published a paper entitled “ The distribution of Bitcoin was fair, ” in which he expressed his thoughts on this matter.
Held argues that Bitcoin "continues to challenge conventional thinking" along with its growing popularity. At the same time, he acknowledges that there is still a certain set of prejudices around the protocol associated with the process of its formation.
“One of them is the claim that the distribution of Bitcoin was“ unfair ”, especially in the early stages of its development. But Satoshi used the fairest possible system, ” he writes.
In his study, Held goes back to the early days of Bitcoin development, when the concepts of “pre-mining” and “instaining” did not exist. Pre-mining allows developers to mine a large amount of cryptocurrency in closed conditions. As a rule, they keep the coins they receive in this way.
Held draws attention to the fact that Satoshi gave society two months to get acquainted with his concept, before he released the first block in the Bitcoin network . Enthusiasts like Hal Finney showed interest even then and started mining Bitcoin with Satoshi. Network survival in those days depended on this small group of miners. Moreover, they stopped mine cryptocurrency, as soon as the network became stable enough without their participation.
“During the first year of Bitcoin’s existence, Satoshi and other miners couldn’t collect enough hash rates to release more than 144 blocks a day and cause an increase in complexity,” Held writes, adding that Satoshi had dropped mining as soon as this was no longer necessary.
“He slowly and steadily reduced the percentage of hash rates. Initially, he planned to reduce the hash rate by 1.7 Mhps every 5 months, but a month after the second decline, he abandoned this method in favor of a continued decrease in the hash rate. ”
Previously it was assumed that Satoshi extracted about 1 million bitcoins. However, one of the studies of the BitMEX exchange showed that the real value is closer to 700,000 BTC. In addition, a significant part of the mined coins was never moved after being credited to the miner's wallet.
Held draws attention to the fact that the cryptocurrency initially had no value. At first, early supporters of Bitcoin distributed huge amounts of coins for free. He recalls the existence of “bitcoin cranes”, such as “Gavin's tap, through which 10,000 BTC were distributed, and others like him.” This week, Jeff Garzik also mentioned in his Twitter that in 2010-2011. he distributed 15 678 BTC as rewards for developers.
Held admits that Satoshi was not perfect, but claims that at the stage of starting Bitcoin, the most equitable distribution of assets of all possible was carried out, "considering what he created / time / audience."
Satoshi tried to “give a signal to everyone” that Bitcoin is not just another “fraudulent scheme ,” writes Held, adding:
“A conservative way out of mining , leaving the community, refusing to spend extracted bitcoins and using our influence for any purpose suggests that he wanted the world to make up his own idea of his project and evaluate it in his own categories.”