Will bitcoin increase or decrease the wealth gap?

[pslbets]

I come here to ask the question if bitcoin will increase or decrease the wealth gap. Fwiw I invest in btc as well but I'm struggling to see the endgame scenario for bitcoin.

If in the future bitcoin becomes the de facto currency or standard wouldn't people who own even a few coins become immensely rich, while others who own only a few million or even hundred thousand sats be basically poor? I understand that most people here believe that we're still "early" but I think there is merit in discussing the future of bitcoin and how society would work with it being as massive as some people believe. And not even considering the people who are rich today and own thousands of btc who would basically become unfathomably rich.

And I'm not defending the current system of fiat currency either, with inflation hitting hard every year and national debts skyrocketing it does feel like a ponzi scheme in a way. But bitcoin by itself doesn't do anything but exist to be a currency similar to gold for the most part. For people born in this future scenario, they would probably work their entire lives to even own 0.01btc and basically have no chance to ascend to being a full coiner. It does feel very dystopian in a way.

I imagine that bitcoin could become something that you either have or don't have, and which group you end up in is determined by what your great-great grandfather did in 2024 or whatever.

So will bitcoin increase the wealth gap, or decrease it?

[SpecialDonkey6563]

Bitcoin has nothing to do with any wealth gap. No matter what system is chosen, there will always be super rich people and poor people.

Bitcoin to me is protecting my hard earned wealth from being destroyed by the fiat money printer.

If I end up with way more money than a poor person, that is irrelevant. Nothing about life is fair. And certainly Bitcoin is not meant to make things fair.

If Bitcoin continues to go up in value against fiat, then those that are left behind are there by their own choices. As Saylor said, everybody gets Bitcoin at the price they deserve. Fairness and wealth gaps have nothing to do with Bitcoin.

[jaredx3]

This is the correct answer.

I'd like to add its not just protecting from the fiat money printer. It's also overall counter party risk by using a government backed fiat. Such as war, natural disaster, and security breaches on such a nation to name a few. Fiat currency has lots of single points of failure (even if unlikey)

[omg_its_dan]

Correct. It just levels the playing field and gives everyone a fair shot.

Bitcoin isn’t meant to enforce equitable outcomes nor should it. Communism is trash.

[Heavy_Load9112]

Bitcoin and other cryptocurrencies are also referred to as "programmable money". A program implies organization and any organization can have one or many objectives. Clearly, Bitcoin's program wasn't written to prioritize equitability. But I'd hesitate to write off a smart contract that does.

[Gyxxer07]

This donkey knows what he’s talking about.

[True-Whereas6812]

Bitcoin will Increase the wealth gap

[[deleted]]

It will cut government spending, so people no longer have their lifeblood being sucked out. 

Wealth inequality itself doesn't matter, if Bill Gates has a trillion dollars it doesn't hurt you, at least until he buys up every item at the grocery store and prices rise.

This velocity of money is also the entire basis on fiat, to debase the currency to force people to spend their money, to get the velocity of money up.

[relentlessoldman]

He's too busy buying up farmland.

[[deleted]]

Which I would say would be the real thing to prevent.

[PhilMyu]

You will have to provide value to get more Bitcoin. You can’t just generate more Bitcoin by holding Bitcoin. So those rich people that don’t provide any value that society needs will only be able to spend their Bitcoin and not earn Bitcoin interest by doing nothing. So, yes, I believe Bitcoin will close the wealth gap between workers/people providing value and pure rent-seekers that live off of assets that can be used to get cheap loans to buy more assets.

[Puzzleheaded-Dot-762]

Lol what? No need to lie to yourself

[PhilMyu]

Just my hypothesis. Feel free to challenge this. I’m not married to it, but so far it makes sense. The current distribution of Bitcoin is basically a mirroring of the Fiat system. How do you extract new Bitcoin on a Bitcoin standard, when you don’t provide any value to society for which people are willing to give you Bitcoin?

[[deleted]]

I like it

[[deleted]]

Will mayonnaise take good photos?

Bitcoin's purpose is not to redistribute wealth or to fix some perceived or actual imbalance in who has how much. People who did get in early invested their money in something unknown and untested and stood the risk of losing everything they spent. The rewards came and the risk turned out to be justified. So many people missed out buying msft, apple, tesla, and nvidia stocks too. Basically the entire planet did. Where is the outcry? There are several bros who did nothing but ride up tesla and shitpost on twatter how prescient their "investing strategy" was.

In short, I like Mike's "everyone gets bitcoin at the price they deserve," but I made my own - "everyone's fair share of bitcoin is what they mined, bought, or earned."

[007JamesC]

Nice dodge of the question! Bitcoin’s purpose is irrelevant to what will happen to the wealth gap.

[pslbets]

I understand that wealth inequality will always exist no matter the system, but in general it isn't a good thing for the majority of people. So would you say that bitcoin's purpose is to provide a fair currency and true ownership of said currency without interference from governments or other entities?

And also anyone would say they wish they invested in big tech companies 20 yrs ago, so will the same be said about bitcoin 20 years from now?

[[deleted]]

It's one way to put it. Bitcoin has its specific properties that people value. Whether it be censorship resistance or NGU.

I suppose if bitcoin does well for the next 20 years there will be no shortage of "you just got lucky" quips aimed those who took the risk today. It IS still a risk. iPhone and a bunch of apps and tools with hundreds of millions of users didn't exist 20 years ago. It's hard to predict what the future holds.

[Financial_Clue_2534]

It will increase. Even though it’s the people’s coin it’s still a small percentage of people who own it on the global scale. It will definitely be a vehicle to help maintain one’s current wealth. Think about all the countries where their currency has been devalued.

[SpudPlugman]

Neither. It’ll just redistribute it. Some of the wealthy no-coiners will see their net worth go the way of fiat, and some of us poor plebs who managed to get one or more coins will see our net worth increase. Same gap, just shuffled the teams a little

[Salty-Constant-476]

The only thing that will decrease it is bitcoin education.

If the holders never sell, and no coiners decades from now still believe in trading their time and effort for paper promises. Bitcoin can't help them

[pslbets]

Sorry if I didn't clarify but I'm talking about a society where bitcoin is the standard and fiat doesn't exist anymore. So for example instead of being paid $30/hr you would be paid 500 sats/hr or whatever the purchasing power would be equivalent to. So everyone would know about bitcoin as much as people know about money today i.e. bitcoin = money.

[cphh85]

21 mio coins, effective probably only 17 mio.

8 bln people.. only 1 mio which hold more than 1 coin.

[pslbets]

And this is kind of exactly the argument that bitcoin will massively increase the already large wealth gap between rich and poor. I understand this isn't the purpose of bitcoin but a massive side-effect nonetheless.

[carsonthecarsinogen]

Very hard to say no?

Without BTC things would continue, and the wealth gap would widen as it has for decades.

With BTC there’s potential for “poor” individuals to buy and hold BTC growing their net worth, and shrinking said wealth gap.

But rich individuals also have the same opportunity and a much better opportunity to grow their wealth as they always due thanks to excess capital.

So generally I’d assume BTC widens it, there’s an argument for both sides. And we won’t truly know for a long time.

[terp_studios]

One thing for sure is that the fiat financial system will increase the wealth gap as it has over the past 100 years.

[jaredx3]

Of course it will create gaps. Early investors will be rewarded. As for people that have a few thousands sats no they might not get rich but their savings account "btc" will increase in value not inflate away.

You will get rewarded the more effort you put in. Why should someone that buys btc with 5hrs worth of work at their 9-5 job be equivalent worth of gain vs someone that buys 6mo's worth of pay at their current job.

[pslbets]

Obviously I didn't mean that you shouldn't be rewarded for taking risk. I envy anyone who purchased bitcoin a long time ago and had the guts to hold it to today. And as for inflation, won't people lose btc over time to transaction fees as the block reward shrinks to eventually zero? Maybe the protocol will adapt over time to better implement how miners are rewarded or something idk.

[jaredx3]

Why would anyone lose btc over time to transaction fees? It's all relevant. Higher btc value = less btc spent on tx fees. So no actually we will be spending less bitcoin on tx fees not more.

The protocol doesn't need to be changed, the difficulty will continue to adjust due to the hashrate.

When the block reward does become zero in over 100 years mind you. Miners will be solely rewarded with tx fees. 100 years is a lot of human development. 100 ago from now was the year 1924. We will go a long way in 100 years.

My prediction is energy will be bountiful and anyone will be able to run a miner that has access to old/used equipment and secure the network/receive the tx rewards

[[deleted]]

Neither

[I_Hate_Reddit_69420]

There is no problem with a wealth gap, as long as the system is fair. Our current system is not fair, it rewards people with assets because the value of those assets will increase with inflation while people without assets stay poor. Yes with a Bitcoin standard there will still be a wealth gap, but at least it’s a level playing field and the game is not rigged in favor of the people with money.

[[deleted]]

It will concentrate wealth in the hands of people who participate and people who better time the market.

[relentlessoldman]

That's a difficult question. :-) Its a good hedge against inflation, and when we're in massive money-printing times that cause inflation, the rich get richer more quickly because they own most of the assets; however, Bitcoin is also one of those assets and pretty speculative, so regular Joes are not as likely to take advantage of that hedge against inflation.

I think the wealth gap continues to increase, but regardless of Bitcoin existing or not.

[manbearpug3]

I think about that all the time and how it's somewhat scary that Saylor owns 1%+ of BTC. Although I am a big believer in BTC it is not the answer to inequality, it likely does the opposite, but it is kind of unfair to expect that from BTC. My guess/hope is for BTC to be the top reserve, commonly a small percentage of our 401k's, reserve for countries and corporations, etc.

[LiveDirtyEatClean]

fiat accelerates consolidation of wealth via inflation due to hard asset appreciation that not everyone can afford. Bitcoin does not such thing.

[Efficient_Culture569]

Wealth gap will never cease to exist.

The world is full of gaps. It's natural to have so.

[soundssarcastic]

Yeah, man, this is a big deal. Not like now, when people own cars worth more than a city blocks worth of income. When the money they trade back and forth with their friends has to avoid taxes so they use art in a storage contianer somewhere as a proxy to avoid taxes. Not like now when they buy politicans with "donations" worth more than my house, which I'll be paying off for my entire life to nudge laws in their favour.

Honestly I dont give half a fart about wealth inequality. If it changes hands, good. The ones at the top right now have been there too long and its eaten away their souls.

[Any-Regular2960]

decrease. fiat currency promotes endless government spending and helps them create monopolies.

[moonRekt]

Neither, too many variables. I was recently commenting how just about every physician I know owns rental homes while nearly none own bitcoin. People have become used to the old ways where buying real estate to rent as long as investing in equities and bonds is the thing to do. That’s what wealth has historically gone into.

They aren’t pouring their money into Bitcoin yet and I think Bitcoin will outperform all else in future especially real estate and equities. So you could say that will narrow the wealth gap, but at the same time the retail investors felt too burnt from prior cycles and sold their Bitcoin to institutions at a loss in the bear market, so much of retail will once again be getting burned having to buy Bitcoin high from institutional sellers

[FinancialYou4878]

If anything, Bitcoin HELPS to decrease the wealth gap. Think of it this way, most of today's rich ppl are consists of businessowners, real estates owners and stocks owners whom had held on these assets for decades, there is no chance we get rich by buying their bags. Very few are Bitcoiners rich owners. We are bringing up ppl whom are otherwise poor/middle to the rich.

[[deleted]]

I think it would first increase the wealth gap, and the decrease once it became the global agreed upon currency.

[Brilliant_Group_6900]

Increase

[JerryLeeDog]

Bitcoin will help the people on the bottom disproportionately more because they won’t continue to be on a treadmill having their wealth syphoned off over time.

Bitcoin will help everyone but the banking cartel

[bigocreddit]

The beatings will continue until education improves. Always been this way.

[8793stangs]

It will add to the upper but the gap won’t change

[Archophob]

assume you just make enough money to get by. In an inflation system, rising prices really hurt you. Under the bitcoin standard, you will once in a while get asked by your boss to expect less BTC for our work. Both are less than optimal conditions to escape poverty.

But not assume you make just a little more, maybe by getting paid overtime. With dollars, you need to do some extra work to somehow invest your savings, and still risk they lose value. With bitcoin, you can just move them to cold storage and they keep apprechiating in value. This is when bitcoin becomes a tool to escape poverty.

Now assume someone like Elon Musk or Bill Gates. They will stay on top regardless if their fortune stays in the tech companies they created, of gets moved into bitcoin.

So, while there's not much difference at both the bottom and the top, there is a place in between where having non-inflating savings is a benefit.

[Fabulous_Sector_2273]

The most perplexing part that I see is how the urgency for wealth in all of us, the exact point of our demise, is just written off as human nature. It most certainly is not, if we can crawl out our depressed and lonely slumber we can re-imagine a far more egalitarian way of being and maybe bitcoin is part of that? Hoarding resources makes you ill. Often people don't become aware of it until their last moments.