Countries Of The World Have A Better Wealth Distribution Than Bitcoin Per Calculated Gini Coefficients

Countries Of The World Have A Better Wealth Distribution Than Bitcoin – Report

The number one cryptocurrency Bitcoin has seen a massive adoption, at least within the cryptoverse. It is currently the most popular cryptocurrency with over 32 million wallets on its network holding varying amounts of Bitcoin. However, the amount held by individual wallets vary significantly.

As one of the major aims of Bitcoin is to ensure all users have access to an equal market, a Bitcoin software developer and technologist Tamas Blummer went into a little research to see how Bitcoin is achieving this goal. Blummer used data collected from the past 1 million transaction to perform an analysis.

Using the Gini Coefficient, he calculated the inequality in wealth distribution among Bitcoin holders. He only utilised data from transactions with single outputs or those with two outputs as these two types suggest the sender is likely the owner of the wallet.

Blummer found that there is a huge gap in the distribution of wealth among Bitcoin holders. While some wallets have only a few Satoshis, some hold thousands of Bitcoins. In fact, data from blockchain research firm Chainalysis shows that only 32 persons on the Bitcoin network hold 1 million of the 17 million Bitcoins mined till date with the smallest owning 12,000 BTC and the biggest having 85,000 BTC.

Among these whales are criminals, miners and early adopters, traders and lost wallets. Of course exchanges hold the largest amounts of Bitcoin but they are customers’ wealth so are not included in the analysis.

According to Blummer’s findings, the distribution of BTC is far more skewed that wealth distribution in the worst of economies in the world where fiat currencies are used. This calls for concern as it is against the core motivation behind the creation of Bitcoin. However, it appears the distribution is affected by several factors such as interest in the asset, early adoption at a cheaper price and so on.