Topic: Bitcoin Price aside - Given a few assumptions (Bitcoin/Users) (Read 896 times)

A large part of gold are hold at banks for decades without moving, maybe will never move again, does not affect gold's price. As long as they do not appear on market, they just like non-existing

Suppose that you have 1 million ounce of gold, dumping them in the market will just crash the price and destroy your wealth, so you might just spend 1000 ounce maximum and hold rest of them, it doesn't hurt to hold billions of dollars worth of gold

And stay away from bitcoin just because early adopters has gained large amount of them just sounds strange. Early adopters can only cash out ONCE, once it is done, they are redistributed forever, not like fiat money, banks cash out fiat money everyday, forever

I really think it would be a bigger problem for bitcoin if it were more widely known that there are so many addresses with more than 10k BTC that have never spent or transferred a Satoshi out of them ever.

In the alt coin world, people generally stay clear of coins with poor distribution, because it means that the earliest adopters are getting rich from it, and can also collapse the price at will.  I think the general public would feel the same about Bitcoin. 

I agree a few participants in the network will own a disproportionate amount of the coins, in my mind anyone who has more than 7 has more then their "share". If anyone owns more than 7 Right now they have purchased more than their given ratio, the reason this is ok now is not many users buy more than 1 Coin so theirs always 1-6 BTC available for the richest to purchase up. When we get more users, their ability to purchase whole BTC's will be impeded severely as more participants change the ratio of available coins to users.


Thank's for linking this, I have been to this site a few times before in the past, looks like the UI has been updated a bit. I guess it did not occur to me to look at it and take any of these numbers into consideration. I wish the site had a restapi or something to query, but its easily parse-able.

I think the real reason I avoided looking at individual addresses is its not quite indicative of how many coins are available to a given user in the network. Looking at those numbers it is surprising to me that we only have 15k Addresses with more than 100 Coins, this will allow me to create a more tailored distribution model Bitcoin currently has though.

https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html

Please consider this, the top 1699 Richest Bitcoin Addresses, everyone at least owns 1k bitcoin!
http://bitcoinrichlist.com/top100?page=17
According some analysis, their hoarding is still increasing. Most of the newly minted coins probably just go to their wallet!
But I do agree you conclusion! The more users, the more scarcity of bitcoin will become!

My Internet was out for a few days a couple of weeks ago, during this time I was catching up on some reading. After a 'bit' I got to thinking about Bitcoin and a few ratios I think are important, primarily these are thoughts on the Availability/Scarcity of the current mined Bitcoin per Users in the network. Here are a few thoughts I wanted to share with the community, I make a number of blanket assumptions and I don't have an official background in Economics, I am not even sure if this is the right area for this post, so take what I say with a grain of salt

Given we have ~14,000,000 BTC Mined and Spendable currently
Given we have an estimated number of users of ~2,000,000 (Inflated Slightly from the recent Juniper Networks Study which estimated 1.5 Million Unique Users of Bitcoin, I bumped it to 2 million to make things rounder and in case we have grown a bit since then)

That gives us a ratio of ~7BTC/1 User in the network. Currently I think their exists an abundance of Bitcoin due to the fact that not every user in the network will buy 7 or more coins, I understand the fact that many users in the network own much more or much less than this number, but let us temporarily ignore this fact and just make assumptions for the sake of round numbers. I don't think every-time a Block is solved (25 BTC), ~every 7 new Bitcoins Minted into the economy a single user in the network is investing upwards of 1162-2100 USD or more based on the current price into Bitcoin, so every-time a block is solved we need more than ~3 new Users to eventually purchase these newly minted coins.

If we assume a few gross distribution ratios just for sake of gathering more numbers, in the United States 2011 (I believe):
1% of the Population owned ~34.6% of all the wealth in the United States

We can describe the above ratio we arrived on previously as - 700BTC/100 USERS

So 1 User out of 100 would ~ own 700BTC*.346 of the BTC available = ~242.2BTC, which leaves the the other 457.8BTC/99 Users

So even if a small percent of the networks users own a disproportionate amount of the Bitcoin, their are still ~4.5BTC/1 User which I think is still too much of an investment for every user in the network to make.

I think that until this Available Bitcoin to User Ratio gets closer to 1BTC/1 User or even flips to 1BTC/2 Users or lower than this, things in Bitcoin land will get much more interesting. So we need our user-base too grow roughly 7 to 14 times the number of Users to 14 Million or 28 Million Users or more. In regards to a time-span that a shift like this could occur with a globally adaptable technology, it took a network like Facebook to grow from single digit million number of Users to ~100 million Users in ~1 years time-span.

If anyone wants more stuff, I wrote some Python code to calculate the all of the categories in the 2011 US Distribution model (Not just the top 1%) and I did this for a Champagne model (20% own 82%), I also looked at other variations like nearly 21 Million BTC available and things like Multiple Billions of users as well. Let me know and I can collate the info/post the scripts.

TLDR; The more users we get makes our ability to purchase a single coin much more scarce. Eventually we will have more users than the number of Bitcoin available, a shift like this can take 1 years time once a few million users vested and actively using the technology.

Cheers,
juju