New research reinforces the fact that — for the most part — a small number of individuals own a large chunk of the crypto in circulation. It’s a similar picture when it comes to mining.
Bitcoin has long been presented as an asset that democratizes finance and serves as an antidote to Wall Street.
But new research reinforces the fact that — for the most part — a small number of individuals own a large chunk of the crypto in circulation.
According to the National Bureau of Economic Research, 10,000 people own about a third of the Bitcoin that has been mined.
And here’s another sobering statistic: the top 1,000 individual investors collectively own a whopping 3 million BTC.
That’s equivalent to an eighth of Bitcoin’s total supply — including the coins that are yet to be discovered, and those that have been lost forever.
Unfortunately, there are limitations to the data, as it can be difficult to know whether an address actually belongs to a person or a corporation.
Beyond crypto ownership, the NBER’s research also found that the world of Bitcoin mining is also dominated by a small number of big players.
According to its figures, 10% of miners control a whopping 90% of capacity. Drill down into these numbers even further, and you’ll find that just 50 miners control close to 50% of capacity.
The authors warned that this could ultimately increase the risk of a 51% attack in the future — creating a danger that previously verified records in the blockchain could end up being altered.
Igor Makarov and Antoinette Schoar concluded:
“Despite the attention that Bitcoin has received over the last few years, the Bitcoin ecosystem is still dominated by large and concentrated players, be it large miners, Bitcoin holders or exchanges. 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.”