Distribution of bitcoin wealth by owner

[rpietila]

It looks from this like several million will be the correct figure.

I heard that only about 3 million bitcoin addresses are used. I would say that the number of addresses > number of users.

Myself, I have used dozens of addresses, and don't consider to be a heavy user of addresses.

http://bitcoinrichlist.com/charts/bitcoin-distribution-by-address
Total   11,462,007
10mils really don't matter so ......

The addresses above 0.001 threshold could almost directly be mapped to holders 1:1. But I know that holders use several addresses so that has to be accounted for.

What are the 10 million dust addresses anyway? Nobody buys with $0.10  

[1714034104]

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[niothor]

It looks from this like several million will be the correct figure.

I heard that only about 3 million bitcoin addresses are used. I would say that the number of addresses > number of users.

Myself, I have used dozens of addresses, and don't consider to be a heavy user of addresses.

http://bitcoinrichlist.com/charts/bitcoin-distribution-by-address
Total   11,462,007
10mils really don't matter so ......

The addresses above 0.001 threshold could almost directly be mapped to holders 1:1. But I know that holders use several addresses so that has to be accounted for.

What are the 10 million dust addresses anyway? Nobody buys with $0.10  

I know I'm gonna regret for saying this but..
People who heard about bitcoin , downloaded bitcoin-qt, tried to earn some satoshi with faucets and gave up.

[Rampion]

It looks from this like several million will be the correct figure.

I heard that only about 3 million bitcoin addresses are used. I would say that the number of addresses > number of users.

Myself, I have used dozens of addresses, and don't consider to be a heavy user of addresses.

I use at least 100 addresses per year, and i don't consider myself a heavy user. Just imagine how many addresses do Bitcoin businesses use.

[rpietila]

It looks from this like several million will be the correct figure.

I heard that only about 3 million bitcoin addresses are used. I would say that the number of addresses > number of users.

Myself, I have used dozens of addresses, and don't consider to be a heavy user of addresses.

I use at least 100 addresses per year, and i don't consider myself a heavy user. Just imagine how many addresses do Bitcoin businesses use.

Another thing that speaks against the millions-of-users hypothesis is bitcoin price. The market cap is $10 billion. Most of the users have bought in before this month. Even if their average investment is only $1000, this means that number of users is only 2 million. But many have bought last year or so, making their stash worth much more than $1000, even after heavy selling.

[niothor]

It looks from this like several million will be the correct figure.

I heard that only about 3 million bitcoin addresses are used. I would say that the number of addresses > number of users.

Myself, I have used dozens of addresses, and don't consider to be a heavy user of addresses.

I use at least 100 addresses per year, and i don't consider myself a heavy user. Just imagine how many addresses do Bitcoin businesses use.

Another thing that speaks against the millions-of-users hypothesis is bitcoin price. The market cap is $10 billion. Most of the users have bought in before this month. Even if their average investment is only $1000, this means that number of users is only 2 million. But many have bought last year or so, making their stash worth much more than $1000, even after heavy selling.

With 20 mils transactions in the blockchain I find it hard to believe.

[wachtwoord]

If there really are only 11.5M unique addresses I would estimate the number of users to be 1M at the absolute maximum.

Note that I don't consider people without at least a single Bitcoin address (so only held via 3rd parties) to be Bitcoin users. Some people will probably disagree with this assumption.

[rpietila]

If there really are only 11.5M unique addresses I would estimate the number of users to be 1M at the absolute maximum.

Note that I don't consider people without at least a single Bitcoin address (so only held via 3rd parties) to be Bitcoin users. Some people will probably disagree with this assumption.

Yes you are right they are not users, but I would classify them as "owners" still, with the disputed definition of ownership.

[AnonyMint]

It looks from this like several million will be the correct figure.

I heard that only about 3 million bitcoin addresses are used. I would say that the number of addresses > number of users.

Myself, I have used dozens of addresses, and don't consider to be a heavy user of addresses.

I use at least 100 addresses per year, and i don't consider myself a heavy user. Just imagine how many addresses do Bitcoin businesses use.

Another thing that speaks against the millions-of-users hypothesis is bitcoin price. The market cap is $10 billion. Most of the users have bought in before this month. Even if their average investment is only $1000, this means that number of users is only 2 million. But many have bought last year or so, making their stash worth much more than $1000, even after heavy selling.

With 20 mils transactions in the blockchain I find it hard to believe.

Coin mixers perhaps trying to shield identity from the coming confiscations...

[rpietila]

20 mils transactions in the blockchain

Coin mixers perhaps trying to shield identity from the coming confiscations...

Do coin mixers create bogus transactions? I thought their way was to just keep a pool of coins and try to have minimum taint between addresses A (recipient) and B (sender).

[AnonyMint]

20 mils transactions in the blockchain

Coin mixers perhaps trying to shield identity from the coming confiscations...

Do coin mixers create bogus transactions? I thought their way was to just keep a pool of coins and try to have minimum taint between addresses A (recipient) and B (sender).

You've still got to have transactions from all the set of input addresses to a new set of output addresses. And those who really want maximum anonymity would continually go through mixers to add more stages of obfuscation to the ownership trail on the public ledger.

The entire point is to add transactions to the public ledger that confuse the trail of ownership.

Btw, it appears to me that regular transactions are now broken. They weren't broken at $350.

Those 20 million transactions would also include SatoshiDice which is the majority and also FX to/from dollar, i.e. trading.

[calian]

The addresses above 0.001 threshold could almost directly be mapped to holders 1:1. But I know that holders use several addresses so that has to be accounted for.

What are the 10 million dust addresses anyway? Nobody buys with $0.10  

Every losing Satoshi Dice bet used to pay out 0.00000001 to the betting address. Obviously it costs a lot more to spend these outputs than they're worth so most of them are stuck.

[rpietila]

FX to/from dollar, i.e. trading.

Hardly generates any transactions in Bitcoin network..

Are you sure? Looks to me all localbitcoin.com trades are on the public ledger.

Ah sure, but that is not "trading". And they are not sub-1mBTC, which was the issue here.

[AnonyMint]

FX to/from dollar, i.e. trading.

Hardly generates any transactions in Bitcoin network..

Are you sure? Looks to me all localbitcoin.com trades are on the public ledger.

Ah sure, but that is not "trading". And they are not sub-1mBTC, which was the issue here.

The post I was responding to was to the source of the 20 million transactions on the public ledger and whether that constitutes evidence of a large number of Bitcoin owners and thus a lower concentration of ownership. I am asserting that it is probably mostly transactions of trading, coin mixing, and SatoshiDice. Not evidence of separate ownership, just recycling amongst the small number of Bitcoin owners, some where in the realm of 350,000 to million owners perhaps.

P.S. I read a thread today about a guy who started with 5 BTC and is down to 3 BTC because he was trying to time the dips. You know many are doing that since that huge crash early in Bitcoin's life. There are numerous threads about how to hedge Bitcoin, as owners are justifiably very anxious.

[rpietila]

I will try to derive a calculation concerning the "eventual distribution" of bitcoins, which is the dynamic equilibrium. Soon...

[rpietila]

Let us assume that Bitcoin has completely taken over as a currency, and is now used worldwide. Because the emergence of Bitcoin has made commerce boom, the world GDP has grown such that bitcoins alone account for as much value as the physical and financial world did in 2012.

The world uses other methods for everyday payments. Bitcoins themselves are used for large transactions only and a measured in units of mBTC. The wealth is distributed in a similar way as in the article, but to quite different people.


In this order,
* the top 29,000 people would have 5,000mBTC or more, a huge fortune comparable to 100 million of today's dollars.
* the top 1 million people would have 500mBTC or more, corresponding to 10 million or more dollars
* 29 million people have at least 50mBTC, which puts them among the most affluent 0.6%, previously called 'millionaires'
* the upper middle class of 350 million people worldwide, owns 5mBTC or more
* lower middle class consists of 1 billion people is characterized by ownership of 0.5mBTC or more
* the lower class of (3+ billion) owns less than 0.5mBTC including people who don't have any or have negative worth.


Even if you find it hard to believe the dollar part, the number of bitcoins existing is still constant, and will likely be distributed quite exactly according to the table above, when the initial distribution period is completed and bitcoins are used everywhere.

[rpietila]

We are so far from mass adoption that it is not even funny.

[wachtwoord]

I like your posts so much man. Claiming you only need 5 BTC to be in the top 29,000 people

The wealthy will inherit the Earth!

[rpietila]

are you sure about those numbers?
cause the first 5 sum up just 4,345,000,000mBTC

They are the lower bounds. Eg. "0.5mBTC or more" means the same as "0.5mBTC - 4.99999mBTC".

In totality, this model assumes 15 million coins. Some of the top 29,000 have vast fortunes such as 50,000mBTC, the early block reward/VIP tag.

[wachtwoord]

We are so far from mass adoption that it is not even funny.

That's very true. But I think you need to account for alt coins.  LTC is at 2% of BTC now and who knows where it will be later.  The more widespread BTC becomes there more widespread other alt coins become so it isn't really 21million coin cap.  Someone who starts a popular alt coin and retains 10-20% might equate to 1% of BTC.

Actually LTC is at 8% of Bitcoin as there is a 4 time larger supply. I kinda think it's overpriced.

[Adrian-x]

Let us assume that Bitcoin has completely taken over as a currency, and is now used worldwide. Because the emergence of Bitcoin has made commerce boom, the world GDP has grown such that bitcoins alone account for as much value as the physical and financial world did in 2012.

The world uses other methods for everyday payments. Bitcoins themselves are used for large transactions only and a measured in units of mBTC. The wealth is distributed in a similar way as in the article, but to quite different people.


In this order,
* the top 29,000 people would have 5,000mBTC or more, a huge fortune comparable to 100 million of today's dollars.
* the top 1 million people would have 500mBTC or more, corresponding to 10 million or more dollars
* 29 million people have at least 50mBTC, which puts them among the most affluent 0.6%, previously called 'millionaires'
* the upper middle class of 350 million people worldwide, owns 5mBTC or more
* lower middle class consists of 1 billion people is characterized by ownership of 0.5mBTC or more
* the lower class of (3+ billion) owns less than 0.5mBTC including people who don't have any or have negative worth.


Even if you find it hard to believe the dollar part, the number of bitcoins existing is still constant, and will likely be distributed quite exactly according to the table above, when the initial distribution period is completed and bitcoins are used everywhere.

are you sure about those numbers?
cause the first 5 sum up just 4345000000mBTC

They are the lower bounds. Eg. "0.5mBTC or more" means the same as "0.5mBTC - 4.99999mBTC".

In totality, this model assumes 15 million coins. Some of the top 29,000 have vast fortunes such as 50,000mBTC, the early block reward/VIP tag.

I applaud you methodology, and your sentiment issued elsewhere when referring to the redistribution of wealth in Russia, redistributing to a similar hierarchy.   

But I think the distribution may be slightly misguided to base it on the existing distribution, as the existing system transfers wealth from the last earners of money to the top of the primed to the first to spend the newly created money through inflation by design.

Bitcoin will fall into a more natural distribution, not artificially influenced by inflation, and I think the numbers will be more generous to the people at the bottom of the pyramid.