Distribution of bitcoin wealth by owner

[Xav]

3. Dec 2013

#People	#Bitcoins	#TotalBitcoins
47	BTC10k+	3.5M
880	BTC1k-10k	2.6M
10k	BTC100-1k	3.0M
63k	BTC10-100	1.8M
210k	BTC1-10	0.6M
350k	BTC0.1-1	0.1M
350k	BTC0.01-0.1	0.0M
210k	BTC0.001-0.01	0.0M

Total: 11.6M bitcoins (0.5M bitcoins assumed lost)

1,200,000 people own bitcoins that are valued at more than $1 (BTC0.001 or more)
280,000 people own bitcoins that are valued at more than $1,000 (BTC1 or more), up from 120,000 last month
930 people own bitcoin that are valued at more than $1 million (BTC1,000 or more)
1 person owns bitcoins that are valued at more than $1 billion (Satoshi, estimated to be BTC980,000)

What would you do if you were one of the founding fathers of Bitcoin, and you target on 3 main goals; 1. implement a brand new revolutionary digital currency, 2. compete (and maybe defeat) the current conventional currencies, 3 (why not?) get rich yourself.

In the very early stage, when mining was cheap, mine as much as possible. Then use a required amount for speculation as to increase hardware requirements for system's integrity. In time the creation rate of new coins shall diminish (2017 ca. 4%) and the price for Bitcoin will stabilize. Then and only then it will be time to 'go full swing'.

  

[macsga]

3. Dec 2013

#People	#Bitcoins	#TotalBitcoins
47	BTC10k+	3.5M
880	BTC1k-10k	2.6M
10k	BTC100-1k	3.0M
63k	BTC10-100	1.8M
210k	BTC1-10	0.6M
350k	BTC0.1-1	0.1M
350k	BTC0.01-0.1	0.0M
210k	BTC0.001-0.01	0.0M

Total: 11.6M bitcoins (0.5M bitcoins assumed lost)

1,200,000 people own bitcoins that are valued at more than $1 (BTC0.001 or more)
280,000 people own bitcoins that are valued at more than $1,000 (BTC1 or more), up from 120,000 last month
930 people own bitcoin that are valued at more than $1 million (BTC1,000 or more)
1 person owns bitcoins that are valued at more than $1 billion (Satoshi, estimated to be BTC980,000)

What would you do if you were one of the founding fathers of Bitcoin, and you target on 3 main goals; 1. implement a brand new revolutionary digital currency, 2. compete (and maybe defeat) the current conventional currencies, 3 (why not?) get rich yourself.

In the very early stage, when mining was cheap, mine as much as possible. Then use a required amount for speculation as to increase hardware requirements for system's integrity. In time the creation rate of new coins shall diminish (2017 ca. 4%) and the price for Bitcoin will stabilize. Then and only then it will be time to 'go full swing'.

  

+1
Might be a bit sooner though. Every person has his/her price; don't you forget that.

[wobber]

checking bitcoinrichlist.com/top100 positions 80 (also maybe 79) to 98 have the same last transaction in on Dec 25, 2013 11:26:40 PM. Each address holds about 10,000 coins.

So somebody owns about 180,000 coins = $145,800,000

[rpietila]

There is again time to update the figures. The methodology in OP is quite good, and this time I think we could actually quantify how many users the different channels bring and how large is the overlap.

- Count the number of users from all exchanges and subtract the overlap
- Count the number of addresses used and their balances
- Compare the figures and estimate number of users
- Check known large holders and add their holdings, add other 10k+ holdings according to power law model
- Fit the cohorts according to the distribution model

Today I have made the new distribution analysis.

- The number of blockchain addresses with a balance of BTC0.001+ was 1,026,000. This is a 71% increase from the last calculation 2 mth ago.
- Number of MyWallets and even the Mt.Gox userbase also showed similar increase.
- The exponential trend of bitcoin adoption would show a 53% increase over 2 months so these figures seem realistic.
- Due to the shortage of people helping me, I was unable to effectively calculate the other metrics.
- I estimated that the number of bitcoin users has just reached 2 million users milestone (+66% from 2 months).
- There is no evidence of significant holders increasing or reducing their position, or of new such holders emerging, so that was left quite intact.
- Number of bitcoins increased by 250,000.
- Bitcoin exchange rate dropped by -20%.
- Other holdings were fit to the distribution model, which results in the following distribution:

27. Jan 2014

#People	#Bitcoins	#TotalBitcoins
46	BTC10k+	3.6M
820	BTC1k-10k	2.4M
10k	BTC100-1k	2.8M
68k	BTC10-100	2.0M
250k	BTC1-10	0.8M
550k	BTC0.1-1	0.2M
690k	BTC0.01-0.1	0.0M
430k	BTC0.001-0.01	0.0M

Total: 11.8M bitcoins (0.5M bitcoins assumed lost)

There is less holders than before in the category of BTC70+. The number of holdings smaller than this increased.

The number of bitcoin millionaires, previously estimated 930, decreased to 790 (-15%). Their combined wealth is 5.9M bitcoins, which is 50% of all bitcoins.

[the_poet]

There is again time to update the figures. The methodology in OP is quite good, and this time I think we could actually quantify how many users the different channels bring and how large is the overlap.

- Count the number of users from all exchanges and subtract the overlap
- Count the number of addresses used and their balances
- Compare the figures and estimate number of users
- Check known large holders and add their holdings, add other 10k+ holdings according to power law model
- Fit the cohorts according to the distribution model

Today I have made the new distribution analysis.

- The number of blockchain addresses with a balance of BTC0.001+ was 1,026,000. This is a 71% increase from the last calculation 2 mth ago.
- Number of MyWallets and even the Mt.Gox userbase also showed similar increase.
- The exponential trend of bitcoin adoption would show a 53% increase over 2 months so these figures seem realistic.
- Due to the shortage of people helping me, I was unable to effectively calculate the other metrics.
- I estimated that the number of bitcoin users has just reached 2 million users milestone (+66% from 2 months).
- There is no evidence of significant holders increasing or reducing their position, or of new such holders emerging, so that was left quite intact.
- Number of bitcoins increased by 250,000.
- Bitcoin exchange rate dropped by -20%.
- Other holdings were fit to the distribution model, which results in the following distribution:

27. Jan 2014

#People	#Bitcoins	#TotalBitcoins
46	BTC10k+	3.6M
820	BTC1k-10k	2.4M
10k	BTC100-1k	2.8M
68k	BTC10-100	2.0M
250k	BTC1-10	0.8M
550k	BTC0.1-1	0.2M
690k	BTC0.01-0.1	0.0M
430k	BTC0.001-0.01	0.0M

Total: 11.8M bitcoins (0.5M bitcoins assumed lost)

There is less holders than before in the category of BTC70+. The number of holdings smaller than this increased.

The number of bitcoin millionaires, previously estimated 930, decreased to 790 (-15%). Their combined wealth is 5.9M bitcoins, which is 50% of all bitcoins.

Great analysis, thanks!

[rotalumis]

Meh, this is discussed to the death. To all readers: buy your way to the level that you want to, taking into account that you need to sell minimum 70% of the coins before it's all over.

Hi, I'm kinda new here and just made an account to ask a question. What does the bit I highlighted in bold refer to? Why would anyone investing in Bitcoin need to sell at least 70%? Sorry if I'm missing something obvious. Even a link to previous discussions would be great. Thank you.

[rpietila]

Meh, this is discussed to the death. To all readers: buy your way to the level that you want to, taking into account that you need to sell minimum 70% of the coins before it's all over.

Hi, I'm kinda new here and just made an account to ask a question. What does the bit I highlighted in bold refer to? Why would anyone investing in Bitcoin need to sell at least 70%? Sorry if I'm missing something obvious. Even a link to previous discussions would be great. Thank you.

The price will still go up by at least 1000x. It is not realistic to assume that you buy now and do not cash out any single coin until the price is $1 million per coin (or higher). To enable a balanced cashout schedule, you will probably need 10 times (minimum 3 times) the number of coins now, than you intend to hold when it gets really high.

So if you want to be really rich then (2 bitcoins), buy at least 6 bitcoins now so that you can sell some when needed on the way.

[WompRat]

There is again time to update the figures. The methodology in OP is quite good, and this time I think we could actually quantify how many users the different channels bring and how large is the overlap.

- Count the number of users from all exchanges and subtract the overlap
- Count the number of addresses used and their balances
- Compare the figures and estimate number of users
- Check known large holders and add their holdings, add other 10k+ holdings according to power law model
- Fit the cohorts according to the distribution model

Today I have made the new distribution analysis.

- The number of blockchain addresses with a balance of BTC0.001+ was 1,026,000. This is a 71% increase from the last calculation 2 mth ago.
- Number of MyWallets and even the Mt.Gox userbase also showed similar increase.
- The exponential trend of bitcoin adoption would show a 53% increase over 2 months so these figures seem realistic.
- Due to the shortage of people helping me, I was unable to effectively calculate the other metrics.
- I estimated that the number of bitcoin users has just reached 2 million users milestone (+66% from 2 months).
- There is no evidence of significant holders increasing or reducing their position, or of new such holders emerging, so that was left quite intact.
- Number of bitcoins increased by 250,000.
- Bitcoin exchange rate dropped by -20%.
- Other holdings were fit to the distribution model, which results in the following distribution:

27. Jan 2014

#People	#Bitcoins	#TotalBitcoins
46	BTC10k+	3.6M
820	BTC1k-10k	2.4M
10k	BTC100-1k	2.8M
68k	BTC10-100	2.0M
250k	BTC1-10	0.8M
550k	BTC0.1-1	0.2M
690k	BTC0.01-0.1	0.0M
430k	BTC0.001-0.01	0.0M

Total: 11.8M bitcoins (0.5M bitcoins assumed lost)

There is less holders than before in the category of BTC70+. The number of holdings smaller than this increased.

The number of bitcoin millionaires, previously estimated 930, decreased to 790 (-15%). Their combined wealth is 5.9M bitcoins, which is 50% of all bitcoins.

Thank you for all your analysis.  I have only just discovered this post and am working my way through it.  I am sure this has been answered, but I can't see it.  Why, in your calculations, are there so many more users holding <10 bitcoins than there are actual addresses.  How can you hold this amount without an address? Sorry if this is stupid.

[rpietila]

Why, in your calculations, are there so many more users holding <10 bitcoins than there are actual addresses.  How can you hold this amount without an address?

It is quite customary to start with bitcoin by buying in an exchange and letting the coins stay there.

[WompRat]

Why, in your calculations, are there so many more users holding <10 bitcoins than there are actual addresses.  How can you hold this amount without an address?

It is quite customary to start with bitcoin by buying in an exchange and letting the coins stay there.

Thanks for the reply.  So are you saying that it is common for exchanges to pool funds with multiple users onto a smaller number of addresses.  I can't check bitstamp and I confess I don't understand how Gox operates, they seem to give you a different address each time.  My Cryptsy account and localbitcoin account just have one bitcoin address which show up on the blockchain with a small amounts.  Intuitively you would think that the number of addresses with small amounts would be much larger than the number of users.  That's all I am trying to get my head around.

[molecular]

Why, in your calculations, are there so many more users holding <10 bitcoins than there are actual addresses.  How can you hold this amount without an address?

It is quite customary to start with bitcoin by buying in an exchange and letting the coins stay there.

Thanks for the reply.  So are you saying that it is common for exchanges to pool funds with multiple users onto a smaller number of addresses.  I can't check bitstamp and I confess I don't understand how Gox operates, they seem to give you a different address each time.  My Cryptsy account and localbitcoin account just have one bitcoin address which show up on the blockchain with a small amounts.  Intuitively you would think that the number of addresses with small amounts would be much larger than the number of users.  That's all I am trying to get my head around.

When a newbie buys his first coins on fox, no new Bitcoin address is generated.

[Cassius]

Meh, this is discussed to the death. To all readers: buy your way to the level that you want to, taking into account that you need to sell minimum 70% of the coins before it's all over.

Hi, I'm kinda new here and just made an account to ask a question. What does the bit I highlighted in bold refer to? Why would anyone investing in Bitcoin need to sell at least 70%? Sorry if I'm missing something obvious. Even a link to previous discussions would be great. Thank you.

The price will still go up by at least 1000x. It is not realistic to assume that you buy now and do not cash out any single coin until the price is $1 million per coin (or higher). To enable a balanced cashout schedule, you will probably need 10 times (minimum 3 times) the number of coins now, than you intend to hold when it gets really high.

So if you want to be really rich then (2 bitcoins), buy at least 6 bitcoins now so that you can sell some when needed on the way.

1000x = c. $1 million / BTC. What is this guess based on?
Genuine question. Is this based on any economic model or data, or is it finger-in-the-wind stuff?
It's a topic I plan to research myself in the coming fortnight and will post the results back here, but I'd be interested what your starting point/methodology is.

[R3qUi3M]

Each cryptocurrency raises once a half a year by approx 10x. Untill all BTC is mined the time elapsed will be approx. 27 yrs from now that is 27*2=54 price jump events. It means that after first jump you will have 10 times more value and after second jump you will have 100 more. It means that if you buy bitcoin now for say 1000$, in 2040 you will have 1000(+54 zeros)$ Idk what number is that ^^

PS. Use that knowledge for your own discretion and risk. I dont take any responsibility if you actualy loose money

[rpietila]

1000x = c. $1 million / BTC. What is this guess based on?
Genuine question. Is this based on any economic model or data, or is it finger-in-the-wind stuff?
It's a topic I plan to research myself in the coming fortnight and will post the results back here, but I'd be interested what your starting point/methodology is.

It is basically a nice round number.

The saturation point (value when everybody uses BTC and dollar is no more) is about 5-10 million (of today's) USD

[Cassius]

$1,000,000 / BTC = $21 trillion total. This is around 1/4 global GDP, or roughly equivalent to the current monetary base of the entire world.
That should provide some context for estimates.

[R3qUi3M]

Yes you are right. My estimate 10(+54 zeros) was based on just hypothetic asumption that when all currency declines we will still have technological/labour value that will add a value to a bitcoin. 10(+54 zeros) is just a perspective that can be phrased right now considering FUTURE value of dollar (when inflatory monetary system devaluates value of dollar in 2040).

By the way I daytrade on forex on GPB/USD, USD/JPY and EUR/USD and what can i say is that:
- Bitcoin value change is compleetly non-technical, bitcoin market and all altcoins markets behave compleetly different than any other fiat currency exchange,
- There are NO elliot waves that are the baseline of all forex exchange in value behavior of bitcoin,
- Bitcoin/altcoin value is a complete anomaly and does not posess any significant random walk behavior like other fiat currencies does,
- Its an ideal fractal in long perspective due to non-existence of random walk,
- Its constantly in UP-trend in long perspective (all other traded altcoins also),
- Its idiotic to bet on value loss of a bitcoin because it has be constantly been since its birth in an UPTREND, i would not bet a single dollar that it will decrease in value in long perspective (always look at long time period: the thing i learned from the forex daytrading)

B.R.
R3qUi3M

[Vlad2Vlad]

How can you possible know the number of people in any category since lots of people can easily have more than 1 wallet? 

But I agree with the trend showing more and more Bitcoins being amassed by the top group as they have the money to reinvest in mining equipment and to actively trade, which further raises their stake and wealth in Bitcoin.  The exact wealth effect as any other fiat.

I am very curious about iXcoin, which is merge mined with bitcon.  Is there any way you can do the same analysis on IXC?

I think it's the most evenly distributed coin out there.  My theory is based on the fact that IXC has been merge mined, and thus hard to get, for over 2 years.  And it also had very low interest from the public as it had a bad rap over a measly 2.5% premine so most people thought the coin was either a scam or that it died.

But now, since thousands of people merge mine and since 80% of the total 21 million coins have been mined, it's too late for anyone to really get a huge chunk, like a 10%. 

So my theory is that iXcoin has yet one more huge benefit over Bitcoin, in that it is incredibly evenly distributed so when it goes up, many many people will benefit from it, unlike the few hundred that did well when BTC shot up for the very first time.

So I'd appreciate it if you could do a similar distribution Analysis for iXcoin.  And you should buy a few thousand IXC because a massive relaunch is planned within a month. 

Thanks and good luck!

[rpietila]

How can you possible know the number of people in any category since lots of people can easily have more than 1 wallet?

That is why the thread is so long because we do research, not just copypaste numbers.

ixcoin

No thanks. Don't you have a community of your own? 

[FenixRD]

How can you possible know the number of people in any category since lots of people can easily have more than 1 wallet?

That is why the thread is so long because we do research, not just copypaste numbers.

ixcoin

No thanks. Don't you have a community of your own? 

Oh, Another arrogant bitcoiner.

I'm always thrilled when I see jerks, mindlessly sweep aside the next great thing; it guarantees that they will have no part in it.

Now please, keep ignoring iXcoin and wait for dumb luck to hit ya twice in one short life.  lol.

No, he's just rightfully short with those who all-to-commonly ask for a large amount of free analysis and expertise ("can you do this with iXcoin?") without even doing the requisite work of reviewing all the existing work, and then having the strange (and seemingly contradictory, as you just requested the same work be done for IXC) nerve to challenge the existing work (that you haven't read) of being flawed, and requesting a summary of why it is not… implying strongly that in your brain, you're so much more brilliant than the last thousand participants and their comments that the burden of proof lies with rpietela.

I could go on but now I'm getting irritated writing this, because this illogical behavior is 99% of the forum, and you're too old to be doing this sort of garbage.

Also, the only thing that exists that may become the "new" Bitcoin is Ethereum, if it achieves its lofty goal. Everything else, even PPC, is just a clone with some tweaked numbers, some more heavily than others, but still undeniably the same genus of money, if different species. And this is coming from someone who firmly be believes that at least a couple alts are necessary for arbitrage and competition, and is impressed with the ongoing improvements made by Charlie Lee in LTC.

[boumalo]

LTC?  Ethereum?

Doomed from genesis.

And Bitcoin will turn very political [with China and Russia secretly hoarding it] later this year which will eventually be its downfall [in a few years].

The unfortunate and inherent problem with techies, which makes up 99.9% of this Forum, is that they understand very little about money and what it would take to build and distribute a successful global crypto-currency.

Your crypto logic is hence on the same linear fault as everyone else.

But don't worry, Wall Street will be here, as I predicted last year, within 1 to 2 quarters; to promptly relieve the computer guys from their acting jobs as bankers and monetary analysts.

And then the engineers will hopefully begin to understand what's really happening here and what a global currency is supposed to be.

Good luck to you and LTC, and Ethereum, etc....

Regards...

You need the techies, but you also need the marketing guys and the financiers, mtgox should have use more techies and more financiers..

Bitcoin will become huge when the dollar will crash and when the Yen, € and £ will also drop in value sharply; it shouldn't be too far away, 6months? One year? Maybe two years? Bitcoin also need to become user friendly and safe, having a tech giant getting involve in Bitcoin and a few big institutions creating easy wallets could obviously help a lot

If a Hong Kong bank was to create an Alt coin backed by gold it could get a lot of traction but it doesn't mean Bitcoin will disappear