Bitcoin Ownership Is Not Highly Concentrated. But Whales Are Accumulating | Hacker News Reader

Bitcoin Ownership Is Not Highly Concentrated. But Whales Are Accumulating

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>We can derive that around 2% of network entities control 71.5% of all Bitcoin.

This strikes me as misleading. If you exclude miners and exchanges from the "entities" side, you should also exclude them from the supply side. Just eyeballing it from the chart, it looks like around ~3% of all entities control around ~95% of all non-exchange-non-miner supply, which is very close to the number they set out to refute.

This, these studies are inherently misleading

I am just waiting for the tether investigation to conclude before thinking about cryptocurrencies again. The market will be a different one after that.

It will be interesting to see what happens, but the market cap of Tether is only 27 billion and BTC + ETH caps are almost a trillion. Even if all Tether are suddenly worthless, it would be a speed bump in the cryptosphere.

The prices are sort of set at the margins. There was a study a while ago that a relatively minor amount of actual cash can move the btc price (a couple million, despite market cap then in the billions) by carefully driving it up.

I don't know what they're currently printing weekly, but afair they print a billion or so every couple weeks when they're really at it, that's probably enough to substantially move the market, or at least support it.

What happens when there's no more $1B over a few weeks to support BTC when the price is under pressure next time?

I'm not saying that's necessarily the case but the problem with tether and how it's used is potentially much bigger than the market cap indicates.

Glad they mentioned the caveats of such analysis:

1) Many users can share the same address (e.g. exchange based wallets).

2) A single user may control multiple addresses (this is the default mode of operation of Bitcoin wallets).

What I don’t understand about Bitcoin, is what’s to stop another organization from creating an alternative coin? Call it Botcoin, if you will.

Then, you now have Bitcoin and Botcoin.

Just this week, schemers were hyping up Dogecoin. The mascot is a picture of a dog!

This has already happened. Bitcoin has been forked many times. Also, there are literally thousands of cryptocurrencies. Bitcoin has the first mover advantage. Craigslist makes 100s of millions of dollars every year. Bitcoin also has huge momentum with its network of miners and now some large institutional investors. It has survived 10 years with no successful hacks or 51% attacks. The market cap is almost 700 billion, so a lot of people have a vested interest in seeing it succeed. Botcoin not so much.

You could also print your own paper currency and call it the Duller.

It wouldn't work because few people would knowingly trade anything of value for it.

As with most assets, Bitcoin has value because it has a track record of people knowingly trading things of value for it.

So you’re saying that Bitcoin should create its own country. That way Bitcoin can mint it’s own sovereign currency.

They should buy an island somewhere and declare it as an independent country to the UN.

There's no "they". It's distributed and owned by no one. But, to your point, theoretically, it could become the world's reserve currency. ;)

Does anyone have any ideas what will happen to BTC value when final coin is being minted? I tried to run few scenarios in my head and the most logical are huge big-ass crash/selloff. With the miners hoarding much of the coins, there won't be anything more for them to do; no more work to be done. Time to cash out, no?

Miner get transaction fee. It is already a sizeable chunk of reward: 1.1 BTC for last block (and 6.25 generated).

That's a great question! I used to worry once miners are no longer enticed with newly minted coin their activity would trail off - particularly when transaction fees were close to $0. But fees have gone up since then without curtailing use, meanwhile a succession of halvings has significantly reduced the rate of coin issuance. And mining is still going strong.

Presently fees make up 13.5% of total block rewards. Here's a graph of how that's varied over time: https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.h...

It will shift toward 100% as we approach the 21M mark. As long as people still want to transact in bitcoin, I think mining will continue to be viable. Of course there will always be competition from newer, more efficient protocols with lower fees.

Rightfully so. Bitcoin is becoming the new go-to store of value.

Follow the big money. Because why would you not?

https://twitter.com/Crypto_Ed_NL/status/1356972853791514624

Because tulips. Other currencies can store value and have better properties like low fees on the base layer (the un-censorable layer).

It's worth pointing out "tulip mania" is a somewhat over-hyped term that conveys an exaggerated view of historical events. See https://en.wikipedia.org/wiki/Tulip_mania#Modern_views

That part of the wiki is so eerily similar to the GME story.

Tulip FUD, really? It's always been a disingenuous argument. Tulips literally die in days.

This wasn't about flowers. It was about bulbs, which can sit in storage for months if not years.

Other currencies also have the "feature" of the government/central banks being able to print money at will, devaluing the hard earned money that people worked for, and to pay for bad decisions made by the governments to take on debt.

Because salty nocoiner.

“We can derive that around 2% of network entities control 71.5% of all Bitcoin. Note that this figure is substantially different from the often propagated "2% control 95% of the supply".”

“The above figures are an estimate for an upper bound of the true distribution of Bitcoin ownership. We expect the actual distribution to be more evenly distributed across entity sizes.”

“ Since the beginning of 2020 the supply held by large entities (whales + humpbacks) has increased 13.4%, and their number by more than 27% to over 2,160 whale entities. See in particular the huge uprise in 2021 – this supports the current narrative that high net worth individuals and institutional investors have been entering the space.”

“I believe this to be bullish for the future price of Bitcoin in the upcoming months.”

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