Bitcoin’s distribution makes it unsuitable to be a world currency

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The Bitcoin dream seems to run broadly along these lines:

1. Bitcoin has a finite supply and predictable issuance, which make it attractive as money because it is immune to debasement.
2. Bitcoin also has various other properties that make it attractive as money: it is easily transmissible, non-custodial, secure, etc.
3. Fiat currencies lack these properties and are consequently inferior forms of money
4. Therefore, in time, the world will adopt Bitcoin as a mainstream form of money.

I broadly agree with points 1, 2 and 3. The part where I think the Bitcoin maxi story falls apart is 4.

If we make the (dubious) assumption that all of the world’s governments are going to come around to the idea that money should have all of the properties of Bitcoin, why would they use Bitcoin instead of making an entirely new currency with those properties?

There are compelling reasons for world governments *not* to adopt Bitcoin as their ‘better’ currency. For the moment, the one I am really concerned with is Bitcoin’s distribution. Accordingly to Glassnode:

>**We can derive that around 2% of network entities control 71.5% of all Bitcoin.** Note that this figure is substantially different from the often propagated “2% control 95% of the supply”.

Source: [https://insights.glassnode.com/bitcoin-supply-distribution/](https://insights.glassnode.com/bitcoin-supply-distribution/)

You can imagine that if the entire world decided to transition to using Bitcoin today, these 2% of network entities would be enriched beyond anyone in human history. They would be, in all likelihood, richer than the vast majority of the world’s nations combined. I cannot fathom how anyone thinks it is realistic that governments would agree to this.

The fantasy generally seems to be: we are early, and latecomers (including nation states) will buy our bags and make us rich. I’m suggesting people should reflect more critically on that idea. Do you want to live in a world where 2% of network participants control 70% of the world’s money, and there is no way for governments to effectively tax that wealth because of Bitcoin’s security properties? That sounds an awful lot like the world we already live in, only worse.

Bitcoin is a cool concept. I own some for what it represents. But I think its adoption as a world currency would be a catastrophe for the human race and will never happen.

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