Sirwin
Sirwin

Is all the bitcoin really concentrated in the hands of a small, wealthy elite?


Distribution or concentration? - Misconceptions about Bitcoin (BTC) are tough, and the mainstream media are doing everything to contribute. It is precisely to take the opposite view of a Bloomberg article that the experts at Glassnode go into more detail about the concentration of bitcoins in a reduced number of addresses.

Highly concentrated bitcoins? It's far from the absolute truth:

On-chain data aggregator Glassnode wanted to fight an overly easy claim by the Bloomberg newspaper: "2% of accounts control 95% of all bitcoin." 

As Glassnode explains very well in his analysis, to speak of "accounts" as if it were a single user per account is misleading and has 2 major problems:

            Bitcoin addresses (a much more accurate term than "accounts") may very well be those of crypto exchange platforms which, by definition, hold     the funds of hundreds of thousands, or even millions, of customers (Coinbase lists 43 million 'verified users);

          It should also be taken into account that the same user of the Bitcoin network can very well hold several addresses, just as conversely, an address can hold the funds of several users thanks to the so-called multi-signature wallets (without however that or that of a crypto-exchange). 

Thus, Glassnode goes well beyond prejudices in its analysis, and takes into account in particular exchange platforms (at least, those whose addresses have been made public), as well as the addresses of mining pools, which concentrate the rewards for minors before distribution.

From the smallest shrimp (less than 1 BTC) to the largest whales (5,000 BTC and more), including small fish and other sharks, Glassnode illustrates below a much better, and more realistic, distribution of bitcoins.

The only truth is: whale addresses are accumulating more and more BTC

Ultimately, users who could be described as "individual" (less than 50 BTC) still own almost 23% of existing bitcoin.

In contrast, the biggest whales (from 1000 BTC and above) account for 25% of bitcoins. Considering these numbers, it is immediately less impressive than the Bloomberg claims, isn't it?

And small carriers certainly represent an even larger share, since crypto exchanges and mining pools - and their many users - account for 22.4% of existing BTC.

The thing that is true, however, is that the biggest investors, the institutional ones, are hoarding bitcoin now more than ever before.

Since the start of 2020, the biggest whales have increased their bitcoin positions by more than 27% (with a crazy acceleration in the last 2 months). They areFinally, Glassnode notes that over time, the distribution of bitcoin improves among all these different classes of entities. Indeed, until 2010-2011, almost all BTC belonged to either minors or whales. In the end, therefore, there is little reason to be concerned about the distribution of bitcoins. also more numerous, with 13.4% more occurring over the same period.

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TOMYBUILDER@
TOMYBUILDER@

I have been interested in blockchains and Bitcoin since 2016 and even mined some at the time. The ensuing bubble turned me away from it, but I've been back to it since 2017 and have been studying them with passion ever since.


Understanding Bitcoin and Cryptocurrencies
Understanding Bitcoin and Cryptocurrencies

This blog, which is not very technical and aimed mainly at newbies, is intended to increase awareness and understanding of Bitcoin and the hundreds of other cryptocurrencies in existence. It is based on a deep conviction: Bitcoin is the first global universal currency; crypto-currencies will create new value systems, transparent and decentralized (and bring to the web the monetary and financial layer that it lacked); and more generally, blockchains will establish themselves as new universal data processi

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