Distribution of bitcoin wealth by owner

[aronnov]

I believe that the holder of the largest bitcoin will soon be handing out their bitcoin for bitcoin holders are very few like me, this is what distinguishes between the holder and the fiat currency bitcoin, I believe bitcoin holders of high sense of community than the owner of a fiat currency , hopefully ... 

[1714861567]

1714861567

[1714861567]

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[1714861567]

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[contagion]

I'm Business Class in BTC and definitely First Class in XMR. when will i get rich?  

I believe the key is in empowering and providing services to the class that is one below your own.

With this in mind, I have been aiming my Bitcoin Supernode initiatives to the ones having BTC100-BTC10,000, and my XMR hangaround gang is also the large holders.

So who do Bitcoin holders < 1BTC serve? Should we empower the dust transactions class?

You are espousing the hierarchical management of Theory of the Firm model. This is for bean counters and the small minded. Some work gets done in this model, but it is more attuned to the deterministic, methodical, dying Industrial Age where capital was fungible and knowledge was replicable, than to the serendipity and chaos of the Knowledge Age where capital is knowledge and not replicable.

Whereas, the truly revolutionary, powerful actions or paradigm shift inventions empower and provide services across a range of classes.

You are applying an old world economy (dinosaur) model to a revolutionary Knowledge Age paradigm shift. The passive investor class is a dying model. The rise of the investor who invests in his own knowledge generation is rising.

I really don't read your posts. I click at random infrequent (was months hiatus from reading you) intervals on one of your threads, and almost invariably I find IMO to be myopia. Again this is my opinion and you and readers are free to disagree.

[rpietila]

Whereas, the truly revolutionary, powerful actions or paradigm shift inventions empower and provide services across a range of classes.

Try CK then.

I really don't read your posts. I click at random infrequent (was months hiatus from reading you) intervals on one of your threads, and almost invariably I find IMO to be myopia. Again this is my opinion and you and readers are free to disagree.

Well my communications skills are legendary bad, that alone does not mean that I would not understand things.

[bitcoinmining]

Thank you for this beautiful publishment. Also it's interesting to see that 0.5 M BTC is lost, we should find a way to rediscover this missing BTC

[contagion]

Whereas, the truly revolutionary, powerful actions or paradigm shift inventions empower and provide services across a range of classes.

Try CK then.

I don't know who had the idea first to create a game to drive interest in crypto-currency. I know I mentioned it early this year on the forums and probably also in passing in discussions with you or smooth et al. I hope you realize that one game doesn't make a movement. Rather need a paradigm shift in game development.

Any way, IMO your myopia is always consistent. You believe the way to effect change is by organizing capital and then applying that capital to build certain features or set rules of engagement via stake.

Afaics you still apparently don't understand the distinction between that and a paradigm shift which is typically born from chaotic experimentation by numerous uncontrollable entities[1]. And the difference in the rate of scaling between the two[2]. A paradigm shift is where the natural forces have been altered and no one is directing the capital nor rules, they just shift because of the fundamental change in the structure of the incentives (in terms of game theory). I presume you naturally resist such an understanding, because it means all your stored wealth is mostly irrelevant. Paradigm shifts are black swans, you can't finance them into existence.

So afaics (although I don't know all your et al thoughts and plans) you are still 10 steps behind me at least in terms of what needs to be done in crypto-currency.


[1] One could argue Tor (onion routing) was born in a Navy funded lab and the initial internet funded by government grant. But it is what the chaotic innovation did with these events that mattered.

[2] Bottom up scales at Metcalf's law square of the number of users, i.e. network effects take over. Top-down is rigor mortis.

Edit: add these two linked posts to footnote [2].

[DonQuijote]

Where can i see the % now?

http://bitcoinrichlist.com/charts/percent-bitcoins-owned-by-richest

I didnt see your answer, thanks!

[newIndia]

There is a nice list in the OP. Can we have the 2015 update ? The last one is more than 6 months old now...

[rpietila]

There is a nice list in the OP. Can we have the 2015 update ? The last one is more than 6 months old now...

The problem is that the model is built on the distribution to small hands that follows when price shoots up. This has been analyzed in quite a detail ever since the first exchange opened, from the trade logs that have been available.

It is considerably more difficult to model the cross-effects of whale accumulation when the price again drops (as viciously and persistently as has happened in the whole of 2014) while also the real-world usage has grown more than ever, in connection - or not! - with the small positions of the users.

In sum, giving any numbers should be based on a decent model, which I don't have for a downtrend

[jehst]

There is a nice list in the OP. Can we have the 2015 update ? The last one is more than 6 months old now...

The problem is that the model is built on the distribution to small hands that follows when price shoots up. This has been analyzed in quite a detail ever since the first exchange opened, from the trade logs that have been available.

It is considerably more difficult to model the cross-effects of whale accumulation when the price again drops (as viciously and persistently as has happened in the whole of 2014) while also the real-world usage has grown more than ever, in connection - or not! - with the small positions of the users.

In sum, giving any numbers should be based on a decent model, which I don't have for a downtrend

Blockchain analysis indicates that bitcoin holdings become more concentrated during a downtrend. I wouldn't be surprised if the number of bitcoin users has been halved in bitcoin's current economic climate.

[rpietila]

Blockchain analysis indicates that bitcoin holdings become more concentrated during a downtrend. I wouldn't be surprised if the number of bitcoin users has been halved in bitcoin's current economic climate.

Please share this analysis in public! It will help the thread readers

[jehst]

Blockchain analysis indicates that bitcoin holdings become more concentrated during a downtrend. I wouldn't be surprised if the number of bitcoin users has been halved in bitcoin's current economic climate.

Please share this analysis in public! It will help the thread readers

http://bitcoinrichlist.com/charts/number-bitcoins-owned-by-richest

Of course, many of the Top 100 or so addresses are exchanges, but the holdings of the Top 500 addresses are increasing their holdings even more compared to the Top 100. Some may say that you can draw no conclusion from this information, but I don't think so. I think bitcoin newcomers who have seen their holdings decrease by 70 or 80% are divesting and I think the bitcoin Old Guard are accumulating even more.

[newIndia]

Blockchain analysis indicates that bitcoin holdings become more concentrated during a downtrend. I wouldn't be surprised if the number of bitcoin users has been halved in bitcoin's current economic climate.

Please share this analysis in public! It will help the thread readers

http://bitcoinrichlist.com/charts/number-bitcoins-owned-by-richest

Of course, many of the Top 100 or so addresses are exchanges, but the holdings of the Top 500 addresses are increasing their holdings even more compared to the Top 100. Some may say that you can draw no conclusion from this information, but I don't think so. I think bitcoin newcomers who have seen their holdings decrease by 70 or 80% are divesting and I think the bitcoin Old Guard are accumulating even more.

You are talking about addresses whereas rpietila is talking about users...

[jehst]

Blockchain analysis indicates that bitcoin holdings become more concentrated during a downtrend. I wouldn't be surprised if the number of bitcoin users has been halved in bitcoin's current economic climate.

Please share this analysis in public! It will help the thread readers

http://bitcoinrichlist.com/charts/number-bitcoins-owned-by-richest

Of course, many of the Top 100 or so addresses are exchanges, but the holdings of the Top 500 addresses are increasing their holdings even more compared to the Top 100. Some may say that you can draw no conclusion from this information, but I don't think so. I think bitcoin newcomers who have seen their holdings decrease by 70 or 80% are divesting and I think the bitcoin Old Guard are accumulating even more.

You are talking about addresses whereas rpietila is talking about users...

No, I'm talking about users.

[rpietila]

Blockchain analysis indicates that bitcoin holdings become more concentrated during a downtrend. I wouldn't be surprised if the number of bitcoin users has been halved in bitcoin's current economic climate.

Please share this analysis in public! It will help the thread readers

http://bitcoinrichlist.com/charts/number-bitcoins-owned-by-richest

Of course, many of the Top 100 or so addresses are exchanges, but the holdings of the Top 500 addresses are increasing their holdings even more compared to the Top 100. Some may say that you can draw no conclusion from this information, but I don't think so. I think bitcoin newcomers who have seen their holdings decrease by 70 or 80% are divesting and I think the bitcoin Old Guard are accumulating even more.

You are talking about addresses whereas rpietila is talking about users...

No, I'm talking about users.

So you use the address-based data to draw conclusion on users. Can you share the methodology?

(If you can express the method in a limited text of plain English, I can feed it to my distribution generator and get results.)

[jehst]

Blockchain analysis indicates that bitcoin holdings become more concentrated during a downtrend. I wouldn't be surprised if the number of bitcoin users has been halved in bitcoin's current economic climate.

Please share this analysis in public! It will help the thread readers

http://bitcoinrichlist.com/charts/number-bitcoins-owned-by-richest

Of course, many of the Top 100 or so addresses are exchanges, but the holdings of the Top 500 addresses are increasing their holdings even more compared to the Top 100. Some may say that you can draw no conclusion from this information, but I don't think so. I think bitcoin newcomers who have seen their holdings decrease by 70 or 80% are divesting and I think the bitcoin Old Guard are accumulating even more.

You are talking about addresses whereas rpietila is talking about users...

No, I'm talking about users.

So you use the address-based data to draw conclusion on users. Can you share the methodology?

(If you can express the method in a limited text of plain English, I can feed it to my distribution generator and get results.)

My observation is that the address-based data closely mirrors the Mtgox leak of user data which is the basis of your estimate. For example, according to your estimate, there are ~70 users with 10,000 bitcoins or more. If you look at the pure address data, there are ~94 addresses with more than 10,000 bitcoins. Roughly 15,000 addresses have 100 or more bitcoins according to the pure address data. This is roughly the same as in your estimate. The same goes for the other categories. So although these addresses do not correspond to individual users, we nevertheless find that the distribution of addresses mirrors the distribution of users. I cannot explain why this is the case, but it is the case. I cannot prove it, but It's my guess that if bitcoins are being more concentrated among top addresses, then they are also being concentrated among top users. It's probably not appropriate to readjust your estimates based on this guess.

[JorgeStolfi]

So you use the address-based data to draw conclusion on users. Can you share the methodology?
(If you can express the method in a limited text of plain English, I can feed it to my distribution generator and get results.)

My observation is that the address-based data closely mirrors the Mtgox leak of user data which is the basis of your estimate. For example, according to your estimate, there are ~70 users with 10,000 bitcoins or more. If you look at the pure address data, there are ~94 addresses with more than 10,000 bitcoins. Roughly 15,000 addresses have 100 or more bitcoins according to the pure address data. This is roughly the same as in your estimate. The same goes for the other categories. So although these addresses do not correspond to individual users, we nevertheless find that the distribution of addresses mirrors the distribution of users. I cannot explain why this is the case, but it is the case. I cannot prove it, but It's my guess that if bitcoins are being more concentrated among top addresses, then they are also being concentrated among top users. It's probably not appropriate to readjust your estimates based on this guess.

I would expect a connection like that.   While there are certainly many exceptions, a person who has N bitcoins in total should have at least one address that contains a significant fraction of those N bitcoins.   For example, a person who has 10 BTC will probably have at least one address with 1 BTC in it.

There are many users who leave most of their BTC in Coinbase, Circle, or some exchange, and some users who split their coins into hundreds of small addresses; they will be undercounted by this method.  On the other hand, there are many users who own two or more addresses with significant balances; they will be overcounted.  @Jehst's comparison suggests that the two errors are not too large, and/or they mostly cancel each other.

[Joe200]

Hi guys,

Just wrote something on the future distribution of coins. Would appreciate your thoughts.

https://bitcointalk.org/index.php?topic=946938.0

Also, very curious about how you calculate the distribution and the number of holders. That's a complete mystery to me. It's not just the gox leak, right? How then will you know the number in the future?

[rpietila]

Also, very curious about how you calculate the distribution and the number of holders. That's a complete mystery to me. It's not just the gox leak, right? How then will you know the number in the future?

Reading the thread might help...

[Joe200]

Since you are considering the full distribution, could you also please post the Gini coefficient?

The only estimate of Gini that I've found so far is from 2011: https://bitcointalk.org/index.php?topic=51011.0

[JayJuanGee]

Also, very curious about how you calculate the distribution and the number of holders. That's a complete mystery to me. It's not just the gox leak, right? How then will you know the number in the future?

Reading the thread might help...

Hey Risto:

Do you believe that the last 6 months of downturned BTC market has significantly affected bitcoin distribution?   Is there a possible projected distribution update coming out, or has such update been posted in another thread?