Bitcoin is largely concentrated in just a few hands, with the top 10,000 holders controlling one-third of the available coins. However, many members of the Bitcoin community are now saying that research into concentration is misleading.
According to a paper, written by two researchers at the National Bureau of Economic Research, the Bitcoin ecosystem is still dominated by large players whether that be large miners, bitcoin holders or exchanges.
The paper went on to explain, “This inherent concentration makes bitcoin susceptible to systemic risk and also implies that the majority of the gains from further adoption are likely to fall disproportionately to a small set of participants.”
Claims have also been made on twitter that the top 1000 investors control around 3 million Bitcoins, and that this concentration could be even bigger.
Nic Carter, co-founder of Coinmetrics, responded to these claims and aimed to debunk that BTC holdings are highly concentrated. The co-founder siad, “Look at the growing number of addresses with x amount of bitcoin and [its] undeniable supply is getting more dispersed.” Adding, “the distribution of supply by address size shows that smaller addresses are gaining a larger share of the overall coin supply.”
After debunking the article, the original Bloomberg tweet was deleted before being reposted without Carter’s comments. However, other members of the community were quick to point out the same thing.
One twitter user said, “biased article. Failed to mention the trend of redistribution.” Another user added, “FUD machine is starting the engines again.”
Carter’s view echoed research from on-chain analytics firm Glassnode. The research, published earlier this year, claimed that 2% of accounts own 85% of all Bitcoin circulation, the number was later found to be closer to 71%.
After this research was published, Glassnode’s co-founder and Chief technology officer claimed that “BTC ownership is much less concentrated than often reported,” adding that the report also proved that it has in fact “dispersed over time.”
The claims that Bitcoin is concentrated into just a few hands should not come as a surprise in the world of traditional finance. This kind of inequality occurs all the time, with CNBC reporting just last week that 10% of people in the US own 89% of all US-listed stocks. CNBC stated that this highlights the major role that the stock market plays in wealth inequality.
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