What are the impacts of the Ethereum pre-sale, pyramidal wealth distribution, and mysterious lack of concern within a decentralized financial system? [closed]

Question

As an Ethereum developer, one facet of it I have never understood is its unequal wealth distribution. Unequal wealth distribution makes fees more expensive for everyone because wealth is concentrated in the hands of a few, who can drive up fees for dApp developers. Even for a cryptocurrency, 72 million Eth were mined in its genesis block through a pre-sale -- that's nearly 80% of outstanding Eth, sold at around 40 cents per Ether.

Yet, on the Ethereum wikipedia page https://en.wikipedia.org/wiki/Ethereum, it says that only 13% of the total supply were mined in the initial pre-sale. Why do they say that, when it is on everyone's computers in the actual blockchain? https://etherscan.io/stat/supply. Additionally, I get the feeling that this facet of Ethereum's roots has been "whitewashed" from the internet and within Etherem's companies, because it looks bad on Ethereum and its founders have the wealth to do it. I have never seen an article describing the potential impact of such an uneven wealth distribution within the future of currency.

In my opinion, Ethereum in 2018 might appear to be a great product but it's not suitable as a public currency. Ethereum, like most other cryptocurrencies, is way more pyramidal than any other financial system. Ethereum, in fact, is more pyramidal than other cryptocurrencies.

Imagine if 80% of all US dollars were controlled by less than 100 people, as happened in the pre-sale. Who would ever want to own a currency like that? Regardless of whether you think the pre-sale holders sold, I don't trust an anonymous currency that's price could crash at any time due to one of the founders selling off. Overrall, this is really bad for long-term adoption of Etherem, because people won't want to join an "old boy's club" of pre-existing wealth

Answer 1

I can't see a question in your post, so it'll likely be closed as off-topic. Reddit would be a better place to invite discussion, which isn't what Stack Exchange is for. I'll respond to several of your points in the meantime, trying to remain as objective as possible.

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Yet, on the Ethereum wikipedia page https://en.wikipedia.org/wiki/Ethereum, it says that only 13% of the total supply were mined in the initial pre-sale. Why do they say that,

There's some ambiguity here.

The 13% they mention is what was premined for the Ethereum Foundation itself.

You'll see from EtherScan that the presale of 72M ETH was split into "60M Crowdsale + 12M Other". The 12M ETH was kept by the Ethereum Foundation, which at the time was ~17% of the total. This now accounts for ~13% of the total, which is what your Wikipedia link says.

At the time, there was only 72M ETH in existence, so ~83% was sold to the community. The current supply is 99M ETH. You'll see on EtherScan that the 99-72 = 27M ETH has been mined by the community, further diluting the original holdings of the Ethereum Foundation (and those who bought at the presale).

Additionally, I get the feeling that this facet of Ethereum's roots has been "whitewashed" from the internet and within Etherem's companies, because it looks bad on Ethereum and its founders have the wealth to do it.

The Ethereum Foundation is a registered non-profit company in Switzerland. Their status as a non-profit limits what they can do with the money. (I'm sure if you Google "Stiftung Ethereum" or "Ethereum Switzerland GmbH", their formal name, you can dig up various publicly available documents that formally state how much money they have and what they do with it. Which is presumably "pay people to make Ethereum stuff better". Note also that the tax laws for Swiss non-profits became more stringent at the start of 2018, so there's likely even more information out there.)

In my opinion, Ethereum is a great product but it's not suitable as a public currency.

(Next part is speculation): I'm not convinced it was ever meant to be. Certainly nothing on the Ethereum homepage has ever claimed that as a use-case. (There's always been something about issuing your own currency through smart contracts, but nothing about ETH.)

I have never seen an article describing the potential impact of such an uneven wealth distribution within the future of currency. Imagine if 80% of all US dollars were controlled by less than 100 people

The 3 richest Americans are as wealthy as the 160 million poorest Americans put together (Forbes article). That's close enough for me. (I'm British - I'm sure a similar thing holds here.)

Answer 2

It's not such a crazy conspiracy... Those of us who were on the subreddit /r/bitcoin in mid-2015 received mass spam messages from Ethereum bagholders, telling us about this new and upcoming smart contract currency. When Reddit admins were asked about why/how they were allowing these weekly messages, they looked the other way. Since then, nobody's even talked about it.

It's ultimately something to just accept about Ethereum and the world in general. People with money use that money to make more money, and all people without money can do is hope to join the right team at the right time.