Topic: Distribution of bitcoin wealth by owner - page 31. (Read 153396 times)

if you don´t believe in the game we play, why bother players forum 

Currently there are very few ways to store wealth that is non physical, resistant to theft or confiscation, somewhat anonymous, easily divisible and transportable.  There are ways that fulfill some of those things but bitcoin fits them all.

In fact, everything you do involve some kind of decision making, thus make it a speculation by default

The difference between speculation and investment maybe is that investment usually produce something that is beneficiary for other people. But that does not necessary to be a physical product (investment in gaming industry is also a good investment). And due to most of the demand has been fulfilled, the ultimate demand is a store of value, invest in a long term store of value system is also a good investment

You can directly invest in bitcoin network by buying mining equipments and run them

You can also investing in bitcoin if you just buy it, especially when there is a crash. Your purchasing support will raise its value and make this wealth store system more stable and popular

To the end, you are investing in something very big that will add to the world's stability, since currently there is almost nothing that can store value safely and most of the people are in debt

I've been lurking on this thread for a while and the numbers seem to be getting closer to accurate---based on my own speculation of course---I'm not sure if this has been raised already but i think it's relevant to bring up how many bitcoins are lost. I wrote a post on reddit a while back talking about how, if bitcoin is widely adopted, it would be impossible for the value of a single bitcoin to be less than <$1000 a coin. See here if interested: http://www.reddit.com/r/Bitcoin/comments/1cta25/why_i_think_bitcoin_cant_survive_if_its_not_at/
Most in the bitcoin community have come to realize this idea already, if not long ago.
Annnyywayyy, i'm getting off topic. My point here is the need to add the variable of "lost" bitcoins. Not just the ones sitting on the FBI's wallet but those belonging to people who bought a bunch of bitcoins 6 months/1 year/2 years ago and can no longer access their wallet. I would be willing to bet a satoshi that many of these "super-rich" holders being discussed are actually "lost" bitcoins; someone that bought 100 bitcoins for $80 years ago and have long since formatted theyre hard drive, had it crap out, didn't know or think to back it up. Not even just those that bought 100 but those that bought or earned or traded 1 or 2 coins....these especially would be easy to forget or not make an effort to recover throughout 2011 and 2012 when bitcoin "died" at its $30 peak. I find it impossible to believe that ANYONE would buy say 5, 50 or 500 bitcoins at ~$1 and wouldn't cash at least some of them out at $50, $100, $200.(well at least 95% of people anyway)
If anyone knows how to analyze the wallets out there based on last transaction date that would be immensely helpful to determine this magic number.
This number of missing coins becomes especially relevant in the future. Let's say (hypothetically of course) in 2016 If there are only 12 million bitcoin, instead of 14 million, to go around between say a billion people with a total of $500bln they want to spend this means the average bitcoin is 15% higher in value(about $42k a coin instead of $35k/coin...i'd be happy with either though ) These are illustrative numbers of course but you get the picture.

Anybody good at analyzing the blockchain that can determine how many btc have been sitting for in the same wallet, say, 1 year or more?

Thank you. Heard about it before, now need to read carefully.

For comparison: a paper I've found some time ago
http://eprint.iacr.org/2012/584.pdf

Yes, this is the consensus. But actually this number has never been significantly higher. The thing is - there are certain properties of the distribution, and one of them is that if we take the average holding of people in a bracket, it is 2.8x the lower limit (if there are enough holders).

Therefore since we know that there are people with 100k+, we can estimate their number and multiply by 280,000.
For 10-100k, we also estimate the number and multiply by 28,000.
For 1-10k, multiply by 2,800.

The average number of coins of the people who have BTC1,000 or more is quite much higher than BTC1,000 and the number of people is commensurately lower.

When you slice and dice the numbers, you arrive at the conclusion that the number of 1kBTC+ holders has been about the same ever since. The number of 10k+ holders has decreased and smaller holders has increased.

In the nearest future, I expect the number of 1k-10k to suffer the most. I have also other predictions but first it would be nice to verify the current numbers. Help is still appreciated!

The purchasing power of the physical monetary stock of gold may actually go up. The paper gold charade will be destroyed along with dollar and all fiat currencies, which leaves only physical gold. At present, people think they collectively hold more gold that there is, which is one reason to gold's cheap price vs. the dollar, but the market cap (7T) is generally estimated using the actual stock. (Otherwise it would be maybe 70T which is not bad at all.)

If Bitcoin becomes uncontested, gold may experience a decline of value. Also silver may experience spikes. We continue to live in a world of uncertainty so the best bet is to distribute the bets in the ratio of your choosing.


50:1 is just my hunch and may be off. It is very hard to estimate these things and there is great fluctuation.

I would not buy altcoins just now, but the main reason is their short life. It is just not worth the hassle, also they are not bringing anything to the game. If litecoin dipped to 0.005 I might consider buying some but even then it would be a play, not a long-term investment in Litecoin's future, of which I know nothing.

Sure Litecoin will go up and down, XRP went to 100%+ of Bitcoin. It just tells that there is liquidity crunch and it is overvalued. I don't care about short-term moves.

Yeah... what happens when you transfer most of the wealth from psychopathic bankers and corporatocrats to a bunch of freedom-loving open-minded and somewhat rebellious cryptoanarchists?

I think it's a good change.

Thanks for the thought provoking thread, rpietila! Glad to see you're doing fine and continuing to bring interesting material to the forums!

Concerning the rather top-heavy distribution of btc today:

I don't see any big problem with that. As has been mentioned, the biggest stashes are controlled (mostly) by early adopters who took big risks and it is in big part thanks to them that btc has taken off. Even from a moral viewpoint, the reward seems fair enough.

Eventually these huge stashes will dissipate I reckon. Early adopters will cash out in order to retire, or alternatively just start living off their accumulated coins once the infrastructure of the btc economy is developed well enough. The further spreading out of coins among a greater number of individuals will bring greater (not only price) stability to the whole system.

Meanwhile we have an elite rich in btc, which consists of smart, tech-savvy individuals ready to take big risks with their wealth out of conviction that something will succeed...seems like a group much preferable to the group which represents the individuals most rich in fiat, which seems to consist mainly of generations old money acquired by colluding with the government to exploit various aspects of the insane monetary system we live under.

That can be said about fiat as well.  Look at forex, stock, bond, real estate etc... total fiat volumes.

And yet 99.99% of Bitcoin transactions are speculative in nature.

If I was the type of girl that required he take my name then he would have never asked me to marry him!  Trust me on that one!

I guess he thought it would be a funny user name.  He just spends more time on Reddit and Slashdot but I found I liked this forum more.  Maybe I should go on Reddit and Slashdot and register as his wife there now? 

Well we know who wears the pants. He's called Bitchickshusband and not the other way around. Did you assume her last name too?

wtf, bitchick has husband. the only chick in town  

you really like to smear it in our faces

get another name please, so I can continue dreaming

seriously though, I no like your name for some reason

Well, I started looking because you appear to be too top-heavy.  Pareto analysis seems to say the same thing.  Just sayin'

Hi, after having so many mentions of you, it is cool to have you here


Pareto principle is not a magical formula, for example in the United States, 20% of people own 85% of wealth. Now we have 20% owning 95% which admittedly is quite top-heavy.

But bitcoin ownership is not universal yet, which makes it immature to run this kind of test yet. Ripple ownership would not pass

Since the distribution must keep its shape (you cannot add more coins to a lower bracket, because that would lift those people to the higher bracket, prompting an increase of coins where you wanted a decrease to happen), your suggestion can be achieved only by reducing the number of Bitcoin users significantly to 100-200k and making the distribution more equal and concentrated in BTC5-50, which I don't think agrees with the known largish number of larger holders.

Interesting to think about, could change pretty quick if we see a mass adpotion eventually.

Love this thread, it's fascinating and finally got me to register here instead of just lurking.  

How well is this holding up against the Pareto principle (the "80-20 rule")?

https://en.wikipedia.org/wiki/Pareto_principle

In your model, do you have 20% of the people with 80% of the wealth and vice versa?  Since the Pareto principle is so well-established, I would think that if your current model doesn't follow it, it is almost certainly wrong.

Based on this:

#People   #Bitcoins   #TotalBitcoins
50   BTC10k+   2.9M
1100   BTC1k-10k   3.1M
12k   BTC100-1k   3.3M
58k   BTC10-100   1.8M
110k   BTC1-10   0.4M
110k   BTC0.1-1   0.1M
57k   BTC0-0.1   0.0M

Total: 11.5M bitcoins, 350k owners

The top 4 rungs is almost exactly 70k users (20% of the people), so that means that their total coins must almost certainly be 80% of the wealth (9.2 million coins).  The bottom 80% of the users by Pareto principle (bottom 3 rungs), must have 20% of the coins, but you are currently showing them as having .5M, when they should have $2.3M.

So I think you need to move about BTC2m down from the top 4 rungs to the bottom 3.

The fact that you got so close to the Pareto principle without even trying proves that you are very accurate IMO.

This is so true.

Current large holders will spend their coins, make bad investments, pass them on to descendants and thereby distribute the coins. Also don't make the mistake (as I did until some years ago) to think that charging interest is evil and will result in accumulation of wealth systemically over time. It doesn't because there can be defaults.

As long as investors are made to carry the risk and have to suffer the consequences of their actions when they make bad loans/investments, there is nothing evil or bad about charging interest.

In the current system of course, there is a lender of last resort (who, via money printing, just takes the wealth of all holders of the currency) and the governments will bail out certain investors (or gamblers) who fucked up their bets/loans/investments. (centralized profits, socialized risks).

This can't happen with sound money because of the inelastic supply.

So yes: some people got stinkin' rich by adopting bitcoin early (and taking HUGE risk), but that's not a bad thing per se.

If you envy early adopters, just get your fucking 2100 bits and wait a couple of years.