The Occupy movement that started in 2011 focusing on world wealth inequality.

Photo: Bloomberg

The global elite currently control around 50 per cent of wealth world wide, but that is likely to keep going up, the Commons research, commissioned by Labour MP Liam Byrne, stated.

If trends seen since the 2008 financial crash were to continue, the report notes, the mentioned 1 per cent will control 64 per cent of global wealth in only 12 years time.

According to the Guardian, which first reported the statistics, the wealth of the richest 1 per cent “has been growing at an average of 6 per cent a year – much faster than the 3 per cent growth in wealth of the remaining 99 per cent of the world’s population,” since the world financial crisis.

If the trend continues, the 1 per cent will have a total net worth of $US305 trillion ($393 trillion), more than double the $US140 trillion they now control in 2018.

“If we don’t move quickly to rewrite the rules of how our economies work, then we condemn ourselves to a future that remains unequal for good,” Byrne, the report’s commissioner said.

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“That’s morally bad, and economically disastrous, risking a new burst in instability, corruption and poverty.”

Last year, Swiss lender Credit Suisse published a report which found that the world’s richest 1 per cent of families and individuals already hold over half of global wealth, and argued that inequality is still getting worse almost a decade after the worst global recession since the 1930s.

“The bottom half of adults collectively own less than 1 per cent of total wealth, the richest decile (top 10 per cent of adults) owns 88 per cent of global assets, and the top percentile alone accounts for half of total household wealth,” the Credit Suisse report said.

Put another way: “The top 1 per cent own 50.1 per cent of all household wealth in the world.”

This story first appeared in Business Insider. Read it here or follow BusinessInsider Australia on Facebook.

Henry Sapiecha

Bitcoin is vulnerable to sabotage from the Chinese government because of its overwhelming exposure to the country, researchers have warned.

Beijing could render the Bitcoin network effectively useless by taking control of the powerful computers used to maintain the digital currency, which are largely based in China, according to a report from security companies Hacken and Gladius.

This is cryptocurrency explained in video

Bitcoin is seen by its supporters as free of government control, a feature that is highlighted as one of its key benefits.

The digital currency is maintained not by any central organisation but by a collection of “miners”, computers that are rewarded in new Bitcoins for updating the ledger of all transactions known as the blockchain.

As Bitcoin has grown, it has required more expensive and powerful computers, and meant mining has migrated to parts of the world where electricity is cheap, in particular China.

Some 77.7 per cent of the “hashpower” – the computing strength behind Bitcoin – is now based in China, according to the report, leaving the network vulnerable. The majority of the specialised hardware used to mine Bitcoin is also made in China.

“It is obvious what this country can do to the network. [It] is over-exposed to China and the government can sabotage it,” said Vladyslav Makarov, an author of the report.

Bitcoin transactions must be confirmed by a consensus of users, which protects the currency from cyber attacks.

However, if one party were to control more than half of its processing power, they would be able to manipulate Bitcoin in a way that renders it useless, the report says. Such a “censorship attack” would cause transactions to grind to a halt, be completed twice, or result in Bitcoins disappearing from wallets. These events could be launched by Beijing if it coerced enough miners in the country.

Beijing has already proven itself to be sceptical of Bitcoin and other cryptocurrencies, prompting fears about financial stability and capital flight. This year China has already banned initial coin offerings, a form of crowdfunding that involves companies issuing cryptocurrency-like tokens, and has shut the online exchanges that allow people to buy and sell cryptocurrencies.

Neither act dampened appetite for Bitcoin, whose price rose to an all-time high near $US20,000 this month, before dropping back last week.

An attack on the network could have potentially devastating effects. Even if it does not completely freeze the network, it could cause a confidence crisis that leads to Bitcoin’s price collapsing.

It is obvious that a huge amount of hashpower concentration in a single jurisdiction is detrimental to the health of the Bitcoin ecosystem.

“It is obvious that a huge amount of hashpower concentration in a single jurisdiction is detrimental to the health of the Bitcoin ecosystem,” said Hacken’s Hennadiy Kornev.

Adam Anderson from Gladius said that the damage from such an attack could be limited by cloning, or “forking”, Bitcoin to create a version less vulnerable to Chinese influence.

“[However], I’m not sure faith in Bitcoin could be restored,” he said.

The Sunday Telegraph, London

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