Is Bitcoin fair?
Some critics argue that Bitcoin is unfair, claiming it could increase wealth inequality as a global currency. It’s true that a few entities control large sums of Bitcoin, but this isn’t due to any dishonest or unfair design of the system.
A Fair Start: Bitcoin’s Open Beginnings
Bitcoin began as an open-source project in 2008, proposed by Satoshi Nakamoto in a whitepaper. Satoshi shared the code with anyone interested, and the first block called the Genesis block was mined in 2009. Over time, more miners and developers joined, and Satoshi gradually stepped back, allowing Bitcoin to decentralize.
Anyone who learned about Bitcoin early on could have joined and accumulated coins. Despite holding around 1 million Bitcoin, Satoshi never moved or sold them—a strong contrast to other crypto projects where founders often profit from early holdings.
Why Is Bitcoin’s Distribution Uneven?
A fair system doesn’t always lead to equal outcomes. Bitcoin’s distribution may seem uneven, but it was achieved fairly. Here’s why distribution analyses can be misleading:
- Multiple Addresses: Users often create new addresses for privacy, so one person may control multiple addresses, appearing as separate holdings.
- Exchange Wallets: Many large addresses are exchanges storing Bitcoin for thousands of users, not single individuals.
How Market Cycles Spread Bitcoin More Evenly
Bitcoin’s value has gone through cycles of booms and busts. During price surges, early holders often sell some of their Bitcoin to new investors, spreading ownership. This trend has helped to gradually distribute Bitcoin more evenly over time.
Bitcoin’s Monetary Policy: The Only Fair Policy
Bitcoin’s monetary policy is neutral, neither inflating nor deflating. Inflation devalues savings unequally by adding more currency into circulation (known as the Cantillon Effect), while deflation would require deciding which money to remove—a process that could never be fair.
Bitcoin’s supply cap of 21 million coins avoids both issues, creating a system that doesn’t favor any single party.
Who Controls Bitcoin?
The Bitcoin network has three main participants: miners, nodes, and users.
- Miners: Process transactions and add blocks.
- Nodes: Validate transactions and uphold network rules.
- Users: Hold and transact Bitcoin. While miners add blocks, they can’t alter Bitcoin’s rules. Nodes validate blocks and ensure they follow Bitcoin’s protocol. This setup was proven in 2017 during the Segregated Witness (SegWit) upgrade when nodes rejected a miner-driven change, demonstrating that nodes ultimately control the network.
Final Thoughts
- Open Distribution: Bitcoin’s early distribution was fair, and Satoshi never sold or used his coins.
- Neutral Monetary Policy: Bitcoin avoids inflation and deflation, providing a fair approach to money.
- Network Control: Miners do not hold the power in Bitcoin, no single party can manipulate the system. Bitcoin’s fair structure and decentralized nature make it uniquely positioned to provide a transparent, neutral currency for anyone to use.