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The traditional finance system is that a single central bank, owned by a cartel of rich banks- chase, jpm, etc-- issue the currency, charge us to use it and get first dibs on the benefits of monetary inflation -- google "cantillon effect".

The now much more diverse mining space is much better than completely centralized in one entity current system.

And bitcoin community has a way of working to fix weaknesses wherever they find it... there is active campaigns to diversify mining, as you pointed out those are pools-- and pools are being made obsolete. behind those pools are thousands or tens of thousands of mining operators, of all sizes, as it's viable at industrial as well as individual scale-- many use it to heat their house for less than the alternative, the earnings don't have to cover the full cost to be beneficial to people.

discuss

Matthyze|7 months ago

Googling "Cantillon Effect" gives suprisingly few results. Out of the top five results, two are Bitcoin-related, one is Reddit, and one is the Wikipedia page of Richard Cantillon himself.

The top comment on /r/AskEconomics is:

"The cantillon effect doesn't really exist in any significant capacity. Central banks nowadays announce their actions well ahead of time, that means before the actual expansion of the money supply, people know this expansion will happen, and markets price in that expansion. So there really isn't much benefiting from being "early".

Beyond that there really isn't much empirical evidence on the cantillon effect to exist in any significant capacity."

Since I know little about this topic I'd appreciate HN's view.

zer00eyz|7 months ago

Cantillon's essay is not terribly difficult of a read and the "Cantillon Effect" has to be the least interesting part of it. It and Smiths Wealth of Nations are both free on the web and well worth the read.

Angostura|7 months ago

Your claim is that European, Canadian, UK, Australian central banks are 'owned by Chase, JPM etc'?

Shaanie|7 months ago

FED is owned by private corporations?..

aziaziazi|7 months ago

OP mixed the "central bank" as an unique one (it doesn’t exists, although MFI could be representative for the west) and the multiple national ones (FED for the US). They arguments doesn’t hold as the national ones creates money and the are much more numerous and diverse in interest around the world than the ~5 bitcoin pools mentioned ahead.

The FED is quite powerful and US strongly influence many other banks but that’s by situation, not by design.

FabHK|7 months ago

Nonsense. While thousands of commercial banks are formally shareholders of the 12 (not one) Federal Reserve Banks,

> the "ownership" of the Reserve Banks by the commercial banks is symbolic; they do not exercise the proprietary control associated with the concept of ownership nor share, beyond the statutory dividend, in Reserve Bank "profits." … Bank ownership and election at the base are therefore devoid of substantive significance, despite the superficial appearance of private bank control that the formal arrangement creates.

https://en.wikipedia.org/wiki/Federal_Reserve#Legal_status_o...