Venture Capitalist firms have taken a liking to Bitcoin and invested millions of dollars into the industry in 2015, including some of Silicon Valley’s best-known venture firms.
The question is: Has there been a Bitcoin trickle down effect? But, first, let’s define a Bitcoin trickle-down effect. It’s not like Reaganomics, in the low tax, political sense.
Rather, a Bitcoin trickle-down effect is whatever the opposite of a few people accumulating and controlling all the coins and never spending them on anything that’s a net positive for anyone other than themselves.
With few people holding onto the greatest hoard of bitcoins, do those coins ultimately find their way in the hands of Bitcoin’s “poor? (who are probably actually quite rich all things considered). In other words, are those users who do not have a bunch of coins truly making considerable money or are the Bitcoin riches being enjoyed solely by VCs, owners and so on.
The data is scarce. What I can find is only anecdotal, having spoken with numerous people who work in the space. Most people are indeed receiving money from their own projects, the entrepreneurs. But, in terms of those people looking for gigs and jobs, the workers, Bitcoin velocity is slow.
It seems that there is no trickle down effect in Bitcoin thanks to Gresham’s Law, an economic principle that states: “When a government overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation.” People want to send PayPal payments instead of Bitcoin transactions.
This is, even more, the case when the price of Bitcoin rises, which leads people to hold onto bitcoins as opposed to spending them.
Some posit that, because Bitcoin is innately deflationary, people with the most Bitcoin will automatically […]
