Topic: Distribution of bitcoin wealth by owner - page 8. (Read 153365 times)

Right.  You're a miner and you wanna sell 1,000 Bitcoins.  I send you the cash (or we use a middle man Broker like Shrem) cause we're both reputable people and you send me the BTC.  There's an obvious transaction for the simple transfer in the ledger [in the blockchain] but that's it.

The market price isn't affected at all by your huge sale to me unless I choose to dump it all at once to push the price down.

If you watch interviews with guys like Barry Silbert and other big buyers you'll see that they rarely buy any BTC on exchanges.  They buy from early adopters, miners and pools.  Off The Chain transactions and they get a bulk discount rate.

Given bicoin is so illiquid it wouldn't be difficult to use this mechanism to consistently drive the price down.

But don't fret, just as easily as Bitcoin can be manipulated down, it can even more easily be manipulated up.  The media will definitely get behind this next massive pump.


Edit:  Coinbase does mostly OTC transactions from what I've read.  It's a pretty common practice.

Are you saying that bitcoins are being transfered by simply providing the private key to an address?  I'm not understanding your suggestion that btc is being traded/bought "off the chain".  I assume you mean the transaction is not seen on the blockchain?

More Bitcoins trade off the chain than on exchanges.  The biggest deals are done off the books, not on exchanges, for obvious reasons.

If you're a mining pool and you need cash every month what would you rather do:  Dump thousands of Bitcoins on an exchange which can take days and significantly lower the price or get all the cash in one single trade and take only a small ~3% hit?

And like I said, the larger pools don't mind playing this game because the lower the price the less competition they'll have as smaller pools either shut down or quit and with a lower Bitcoin price less and less people buy mining gear so the difficulty remains lower for a longer period of time - rewarding the larger pools with more and more Bitcoins.

If you talk to guys in the know, like Charlie Shrem, you'll find out that there are massive cash buyers buying Bitcoins off the chain everyday.  Given Bitcoin is so illiquid, driving the price down (or up) is an easy task, especially for professional Wall Street traders.

Would need to be large quantities - where from ?

Edit; just looked into this - this article explains the process http://www.coindesk.com/bitcoin-brokers-trade-millions-without-exchange/.
Very interesting

I would also really like to see what the current distribution of coins looks like and I would really appreciate it if you could update the stats. Last update was in April and It'd be nice to see how the distribution changes with the next rise and before COIN hits the markets.

By the way is there anyway to automate your process? Maybe the community could donate some BTC your way for an open source software that can analyze the distribution (I know I would)

Mass manipulation by Banksters.  I've seen it with stocks so many times.  Price goes down for months straight while Goldman Sachs et al accumulate massive amounts.

Wall Street is here now and they know what the ETF means so they have to create this massive downturn to get as many Bitcoins as they can.

Given they can buy lots of Bitcoins off the chain (OTC) at a slight discount they can then constantly dump those coins on the open market so the buys are off the market but the sells constantly drive the price down a small % at a time.  Eventually, selling begets selling as people panic and miners become desperate as they're forced to sell more and more to pay their bills and in this manner the pro traders accelerate the drop and pick up as much Bitcoin as possible.

Also, the massive farms could be adding to this pressure given they know their competing smaller ASICS farms will shut down or go out of business thus making them stronger.  Lower price also means less people buy ASICS which again gives a big edge to the huge pools by keeping the difficulty lower and to negotiate better deals when buying up new gear.

So I suspect that the 2 or 3 largest pools are helping drive prices down to gain more market share and get bigger discounts on new ASICS.

This will continue until we get solid news [or rumors] of the ETF.   BIT should come this month, or latest next month.  COIN should be close behind that and that's the one that's gonna change the game cause that's the one which makes a public statement that the US government [via the SEC] supports Bitcoin.

And that will bring in not only tens of billions of fresh investments [all within months of approval] but also other countries will finally feel comfortable buying and using Bitcoin as a reserve currency knowing it now has the approval of the US government - which is why the ETF will push Bitcoin into the mainstream with massive force [next year].

Until then just keep buying - the current price is absolutely artificial and an absolute steal.  Bitcoin should easily see $10,000 next year and quite possibly much higher given the US alone has $8 trillion in just 401K and IRA retirement funds and $20 trillion in total investment assets - which will finally be allowed to invest in Bitcoin.

When this money starts to flow into Bitcoin later this year and especially next year, it will create the most astonishingly spectacular asset bubbles of all time.  Buy, buy as much as you can now cause this is the last chance to make millions off just a few thousand dollars.

Truly once in a lifetime opportunity!

Cheers!

So much to do, so little time (And it's getting worse once BTC starts to rise again!)

I'll have to think about it. This methodology only takes into account the beneficial owner - do you think the controller should be considered as well?

With Gox, the owner did not matter much if the controller is crooked. But with this line of thought, almost all property upon earth (including governments) belongs to the money masters, they belong to Satan, and Satan is a rebellious servant of God.

My way of thinking is that despite the ETF's, the distribution chart itself would change surprisingly little. The people in each category change, a lot.

Massive, massive amounts of bitcoins have changed hands during the downtrend, and many early buyers have been selling. Without this, how could the downtrend have continued so long?

We're now at 14+ million Bitcoins and we've has massive buying by banks and probably corporations as well.

Is there any way to get these numbers included in the calculations?

Or we may as well wait for the imminent Bitcoin ETF which will drastically change the distribution curve as money managers in charge of trillions of dollars will start to invest heavily in Bitcoin.

It should get very interesting next year - we should see massive change and Bitcoin should continue the charge well past $10,000, pushed mainly by the ETF.

I have selected this method because I see that all the other methods (used standalone) have much higher error margins, of which the people using these methods are blissfully ignorant.

To understand what "this method" actually is, though, you will have to read the whole thread.

Can the totality of bitcoin holders really be estimated as such? I see these as encouraging figure if so.

The chart is composed using statistical methods mainly. If the price, transaction quantity etc. things stay constant, and we don't have compelling evidence to the contrary, we cannot say that the adoption has increased, and there is thus no need for the update. People change between categories but the end result is the same.

I did compose a more detailed analysis about the distribution for Monero. I think the action is there currently. I saw the dynamic atmosphere of Bitcoin in 2010-11. Monero is now doing the same, and the market cap is also in the same range. Why not buy your 0.1%?

any chance for an update?

i saw him copying another message about showing bitcoin to friends at a dinner. He should be banned.

WTF you're doing here?

Sounds reasonable. The power law distribution should dictate that for the top 3% (top 60 holders) there is always 10 times more holders when the holding size goes to 1/10. That seems to hold true. The 100k+ are jokes, yes.

I would be surprised if sotoshi doesn't check up on bitcoin news and who says he wouldn't occasionally read reddit

theymos, evorhees came to mind quickly. I'm sure we can find a third one...

I can name one.    But what are those people doing in /r/bitcoin then?

I agree with both of these statements... I am even skeptical that 3 people have over 10kBTC on reddit...

Indeed.  But the lower end is unreliable too. People who own less than 0.1 BTC probably don't bother to read /r/bitcoin, and that may hold also for those in the 0.1-1.0 range.