Wealth concentrations and inequality are one of the great challenges of our time, and new research from the National Bureau of Economic Research (NBER) has highlighted this phenomenon as an emerging trend in the digital asset space.
The research report included a three-part study of Bitcoin network transaction volume and participant structure, the concentration and composition of active SHA-256 BTC miners, and an analysis of Bitcoin holdings (and their holders). ).
BTC ownership is more concentrated than previously thought, NBER findings showed that the top 1% of Bitcoin owners own over 27% of the total supply – and that’s regardless of the fact that several wallets can belong to the same owner.
On-chain analyzes demonstrated that approximately 8.5 million BTC are held by individual investors, with an additional 5 million BTC held by intermediaries such as exchanges.
Although initially this paints a gloomy picture for crypto, surprisingly these results still suggest that Bitcoin has more equal concentrations of wealth than the fiat world.
After all, globally, the top 1% still owns over 50% of the world’s wealth, and furthermore, America’s 1% has 16 times the relative wealth of the bottom 50% of the United States. – so by comparison, BTC could be considered remarkably equal – for how long? Only time will tell.
Halving Events Force Mining Concentration
NBER research into Bitcoin mining also shed light on the impact of the Chinese May release on the SHA-256 hashrate; and the repercussions it has created.
It would appear that BTC mining is increasingly focused on a handful of major players, and this concentration appears to be linked to event cycles being cut in half – with reduced rewards increasing pressure on smaller miners freelancers – leading to an increase in the market share of large companies.
This could impact the future integrity of the Bitcoin network, as reductions in mining activity during and after the halving events significantly expose the network to its only real risk of a 51% successful attack.