Hopefully, people here won’t get some rash just because I mention thus centralized IETF, but maybe it’s worth to read about their experiences, reflections and methods on rough consensus: https://tools.ietf.org/html/rfc7282
Even if in a decentralized, anonymous crypto-space certain things can’t and/or shouldn’t work the same way, I believe it contains quite a lot of “keywords” that has to be considered and answered here too.
For example if people not being directly involved on this crypto-vehicle (not like investors, gamblers, miners, developers) shouldn’t have any voting power. Or in other words: code and stake is law => developers and whales are the new politicians. All the rest please shut off! (question mark!)
Practical examples of such people that - even if they regularly work and live instead of temporary care for someone else - maybe easily become forgotten by investors and crypto-nerds: kind of nurses, teachers… or even craftsmen: should (must) they invest their income into crypto to have a voice or is it a good practice in traditional (healthy) economics to invest in the own company and employees?
Or let’s talk and think about minorities: Do they simply have no rights and no chance that their needs and wishes get considered in some ways? (without going in detail and become OT, let me say that I live in a region where we are a linguistic and cultural minority in another nation, and I believe we have solved this over decades after WW2 now in a pretty good but anything else than easy, ignorant or simplifying way)
What about voting on others? I mean a majority voting for a solution constraining a minority (5) to contribute much (20) instead of accepting that a larger majority (20) must only contribute a bit (5)
Here too a practical example that should tell ya it’s not only and always about $$$, Bitcoins, ADA’s and hopefully soon the moon.
There is a small town in the middle of the Alps, who has voted against Glyphosate. Absolutely no pesticides should be allowed in their district.
Sounds good, right? Well in fact it’s pretty bullshit because the people living there voted with over 70% to prohibit pesticides, but much more than 70% are still buying and consuming industrial produced food. So in fact they only decided that they don’t want the pesticides close to where they live. Someone else should bear the burdens. It’s the same like you’re making it publicly clear that you are against child labour, while you wear a 3.99$ T-Shirt made in Bangladesh.
And I would say it’s even worse, because such decisions/votings give the impression that a problem can “easily” be solved by burdening all on a small group of “culprits” with an awesome side effect: you declare yourself as non-culprit. That let’s you feel relative good, morally superior and (the worst) there is no need for action and contribution from your side because you’re the good one.
BTW: these mechanisms are well known and absolutely nothing new in this worlds history. Ignoring such things when it comes to a new way of global economy is highly ,highly, highly dangerous.
As I see it BOTH sides are guilty of leaning too heavily on theory.
@ADALove is absolutely right, IMO, in his understanding of how, generally, those with some wealth and power tend to use them to accumulate ever more wealth and power at the expense of the rest, and there need to be structures and institutions to mitigate that, of which democracy is the most important. But IMO he overestimates the likelihood of the ADA whales actually causing any significant problem for Cardano, and I think he might be underestimating the difficulties of forking the project (one or two others on that side certainly do so).
@Adafans_io on the other hand I would say is a fundamentalist regarding economics and, like all fundamentalists, tends to ignore matters of degree and context. In reality, systems that work well on a small scale and in the context where they evolved often break down when radically scaled up and/or exported to a significantly different context. In particular, small, local economic systems work within a social context that just does not exist at a much larger scale. This is the central issue in “the tragedy of the commons”. It ignores the social sanctions that in traditional communities prevent individuals from taking undue advantage of common resources. Some try to get around that by rationalising that to take such advantage is natural and right, but most people are “community-minded” enough to know better by instinct.
Anyway, I’ve been spurred into producing this but now I’d much prefer to retire back into the shadows, as regards this particular debate, so anyone who replies to this should not be surprised if I don’t come back to them. And I definitely won’t if the response is abusive!
A last post from me in this thread before I also withdraw into the shadows. Is it clear what the questions are that we need clarity on to assess whether there is an issue or not?
I want to know exactly, and I am speaking to everyone in this post who believe this whole “Whale issue” I know personally it is not an issue - but I invite anyone who thinks it is, to SPECIFICALLY address. Specifically tell me a real-life situation what you believe could happen. What are you afraid of, lets say 200 Whales has 50% of ADA (a fictive scenario, its much lower than that in real life, and will diminish over time)
I’ve read a lot of whales is bad nonsense and a lot of vague ideology. Lets hear some actual concrete scenarios so we can boil it down.
Tell me, what is it in your mind that you believe can or would happen? Give one example, and keep it short.
It is claimed above that 100 whales own about 50% of the current supply, and overall 75% is owned by whales. Maybe it would help if we can get some agreement on the numbers. I don’t qualified to tackle that myself, but it’s obviously central to these arguments.
That would be indeed very nice to visualize, I’ve asked the initiator of the topic before for this.
Also, for what it’s worth, a few days ago the numbers were as follows:
the richest 5000 accounts held 86% of currently circulating ADA
Just to throw some numbers out there, not deriving any judgement from this.
Lastly, I specifically said “a few days ago” because in the meantime I’ve checked the numbers again – this time for the richest 100 holders – and there has been some consolidation, i.e. the last person on the list now holds more.
Perhaps this aspect is what ADAlove feared? I don’t know. Who knows? Is that bad? Good? Just natural? People will make up their own minds.
Have a pleasant evening, everyone.
P.S. I despair at the level of vitriol that some people have brought into the conversation. So blind to the fact we’re simply a bunch of guys/gals, and I literally mean a few dozens, who are discussing things. No one’s getting sent to the electric chair, none of use have any power to actually do anything significant by themselves.
The first question before the (short) example can be brought up is: What are we talking about?
Crypto-Doggies?
A couple of Burger-restaurants and real-estate’s you can pay in cryptos? (if you’re brave enough and don’t worry about paying a pizza today, instead of a penthouse next year)
A replacement for Gold?
Or a global economic finance system essentially evolving or completely replacing communism, capitalism and whatever else we know today?
So what could happen if
1.) crypto’s could become a noticeable monetary trading and exchange system
2.) offering anonymity, avoiding regulation and taxation
3.) governed by anonymous, rich people
Ok 5000 Holding 86%, I can believe that at current point, and I am probably among them. I still dont see any specific issue raised, and I call to anyone who can, to do. I will answer @werkof in a moment.
Well first… The original founders and adopters of crypto were mainly libertarians, aka “pure capitalist” even the anarchist segment are actually capitalist, they just dont know.
For the essence of capitalism to work you need fundamentally strong and honest money, which is what crypto will provide.
Yes there will be a top 10% who holds 80% of the assets, or even more concentrated this will always happen over time. That group changes all the time, the same 10% are going to be very different 50 years later. This is the natural order of things. For every 100 born, most are not leaders, most are not creators, most are not innovators, most have no interest in building and cultivating assets. They just benefit from the yield of these assets, and thats OK. We all become more wealthy in this process, this is why today even the poorest in countries who have had lots of capitalism have more convenience and higher living standards than kings 2000 years ago.
Most people just work, get a salary, spend it. When they die, they left nothing behind in this world. No assets, no creations, what they gave in (their labor) equals the value they consumed. A zero-sum actor. No assets were created (surplus) - and thats totally fine, nothing wrong in this - but this is why the most amount of assets are always in a small segment of the population. It is not because they “took” these assets from anyone, these assets were created out of thin air. Additions to the economy, it is not a zero-sum game. Of course you can create straw-man examples, but on a total sum net-basis this is how it works in a free market.
To the point, you bring up the governance by rich people as bad, lets say there are 5000 that owned 90% of ADA. Whats the point? What are they going to do collectively? What is there incentive? How are they going to rip-off anyone? Tell me exactly how, give an exact specific scenario and situation. Not some vague conspiracy, that it is somehow obvious.
Even if I run my own company for almost two decades, and my country (Italy) is having one of the highest tax rates (because the southern part is professionally, largely and illegally avoiding them) I can’t resist to raise my voice here for a certain balance and protection against a constant move of money away from the poor people upwards to the richest 10%.
Look at this graphs over time to understand what I mean: Wealth Inequality - Inequality.org
I had already mentioned the panama paper’s. There you can find a very lot of thus upper 10% people.
And you can find big global companies, who have ressources, knowlege and ways to use countries like Panama to avoid taxes and hide their huge earnings. Chart: How Much Taxes Do U.S. Tech Giants Actually Pay? | Statista
If crypto - significantly governed by such people and companies - will become a global standard (or at least one way) for such financial transactions, then I expect a huge increase in involved people and volume. All of this at full cost of the lower half of the worlds population.
thats quite the opposite of “banking the unbanked”.
counterquestion 1: who does expect that an anonymous system favours a fair and good development?
and regarding your statement:
counterquestion 2: so what exactly is the difference between the current FIAT and the Crypto system you describe?
First any tax-evasion that exist is good for the economy, since the government squanders resources more than anyone. The reason for this is simple, they dont have any incentive not to, and all the incentives to do. This is why we need “for profit” because this is the only mechanism that kills of squandering of resources and encourages growth of resources… and if someone chooses to squander, at least it only affects themselves and not anyone else.
Look, in a free market. Lets say I sell you a iphone, you paid 1000$. Now I have 1000$ but you have the phone? If you look on paper, now I am 1000$ richer. But wait a minute, you wanted the phone more than the 1000$ and I wanted the 1000$ more than I wanted the phone, so its win-win for us both. We both choose to do the transaction for our own benefit and we still chose to do it. So we both created value for each other, we both became richer in this transaction, we created this out of thin air. I dont want the 1000$, I want stuff, but you didnt have any stuff I wanted, thats why we use money, so we dont need to barter directly with each other, but we can quantize the economic input in money, and store it there. So if someones makes a profit in a free market, lets say you accumulate 1 billion USD. Then thats the value you put into the system, to fully understand this you need to go deeper into the mechanics of profit, I cant just explain it over a short paragraph here, Its not completely intuitive.
Now, where everything is being fucked up is when you dont have a free market, aka. where companies can use a government for favors or benefits that inhibitors otherwise free-market competitors. Patents, regulations… Like regulations, or minimum wages. They increase price for doing business, so only larger companies can survive, this benefits larger companies… Min wage. If there was no min wage and regulations unemployment couldn’t exist… The only thing min. wage hurts are people who cant produce the value of the min. wage and cant get a entry into the market to acquire these skills… Because it is economically impossible to hire someone at a higher price than what they can produce.
Well lets first start with Bitcoin… Nobody can govern anything… It would takes a mass mass collusion to alter the ledger. So mass that it is completely unlikely, so unlikely that the threat of it is worth having for honest and sound money (which bitcoin is not, but if it was). In bitcoins case, it would be so costly making it not-worthwhile.
In terms of POS - even if someone wanted to collude, (this is why proof of stake is better) if trust in that currency was broken the value would immediately plummet hurting the mass holders more than anyone else. Its just bad incentive. You actually have to own ADA, being at monetary risk, rather than just having a bunch of mining power (POW)
How is it different from FIAT? Well most gov fiat is controlled by just a very few people in a central bank lol, and they actually control it, and they have political incentives that are not for profit. Which always leads to money-printing - other than that, it means they can seize, or control transactions within that system. But the most toxic part is the incentive… You know a unbacked currency would have never worked, because everyone back in time knew this, it could never have been sold to the public as a unbacked currency… The dollar was backed by gold, thats the only reason people chose the dollar to begin with. The dollar was the claimcheck to the money that was sitting in a vault, which was gold. The dollar was never meant to be the money.
Cardano. The governance structure is not meant to have complete control, I am not sure exactly how it is going to work, but I am sure there are limits of what that can actually do and any control beyond that would have to be done by a hard-fork. Any collusion would be limited in damage of what you could actually do.
Just out of the top of my head (the possibilites are limitless to be honest as long as a small group has a majority voting power. And with small I am talking and group able to vote as a group. As long as there is no laws/rules against it it would be compleatly legal for them to do to and basically a way to take money for free.
Propose and get voted a new system where stake reward is disproportional to amount of ada owned (causes skewed wealth over time say if you stake more than 1 million you get X reward and if you have 10000 or less you get only y reward)
Propose and get voted in geographical limitations and/or other hardware limitations on staking that causes one group/nation to benefit.
Taking some inspiration from real world cases : Propose and get voted in that a majority can purchase all ada of minority user for X cost as compensation (takeover bid)
More real world cases: Propose and get voted in that more ada will be created in a ICO but only if you can purchase X amount of ada or more you can contribute (benefiting the rich holders and diluting minority stake holders)
Hostile takeover of ADA where a majority wants the currency to be sold / distributed into another coin created by whales/groupes so they get a disproportional financial benefit.
Etc etc.
I am sure many examples are far fetched but the point is only the creativity is the limit here. Once you have a majority vote in the hands of a group able to vote together as a group you can do all kinds of havoc. And as long as there are no rules protecting against these things they are legally free to do it. I am not saying any of these is going to happen any time soon but in theory and in the future it could happen if there are absolutly no rules on voting.
Great and to the point post, thanks! First one Ive seen. I will address it, with my take on it. These are some great points and potential issues - which can all be solved by putting in place limitations on the governance system, I will get back and address each point of how I see each could be preventable.
Great looking forward to that. Thanks for keeping this discussion civil. I will respect any argument with validity. Lets show that this comunity is more than lambos to the moons and trolls not allowing bridges to be crossed.
Suppose we trust your statement and in best case you know some other whales and can tell us about a whales typical point of view: can you list up at least two, or better more arguments discussed in this thread by ordering it from true/important down to wrong/meaningless.
I know both my request and your answer could be considered highly speculative and written by someone not being a real whale. That’s why it would be awesome to see a real whales statement about his motivation and expectations (I personally would be interested much more in some shared ideas about possible social, moral, global impact, and not if you expect 10, 100 or 1000% of speculative profit.
