Distribution of bitcoin wealth by owner

[porcupine87]

So is this list of distribution only based on the addresses? Or is it based on another method? I could not find it.

I would suggest two tendencies:
1. Addresses with large sums are likely to be cold storages of exchanges or storage services like blockchain.info
-> Per address there are many individual holders.
2. Individuals with largs amounts tend to have differend addresses.

Just one example:
Let's assume I have 8 coins and split them up on 4 different addresses. Then I bought for my family (4 individuals) 0.5btc each and to make it easier for them I add all of them to one address.
address1 2
address2 2
address3 2
address4 2
address5 2
-> On the blockchain this would appear as a perfect distribution.

Another example:
990 individuals store their 1 coin on blockchain.info and one person has 10 coins, and stores them in one address.
address1 990
address2 10
-> On the blockchain this would appear as vastly unequal, but in reality it is.



This leads to the conclusion that the wealth distribution ist not really easy.

[ErisDiscordia]

This topic has just been referenced in an article by Forbes:

http://www.forbes.com/sites/markrogowsky/2014/03/02/you-dont-need-a-nobel-prize-to-be-wrong-about-bitcoin-but-it-helps/

good to see this work being used outside of the Bitcointalk community

[rpietila]

So is this list of distribution only based on the addresses? Or is it based on another method? I could not find it.

Try reading the OP:

The intent of this thread is to find out and update the statistic on how bitcoins as investment/holdings are distributed according to the size of actual holding (note that this differs from the largest addresses -list).

What the method is, is discussed in the thread. A nice post of mine, from the day when the figures were last updated, summarizes it.

[rpietila]

rpietila, is there any reason why there was no February update?

He is partying at his castle.

That is one. Another one is that we are trying to develop a methodology to derive the same statistics for every month back in time since Bitcoin's inception. It takes some time but will give us 58 results instead of one

[rpietila]

MtGox leak analyzed

Code:

	69266	951441		
mBTC+	#	#BTC	avg	
10 000k	5	130 809		26161,8000
1 000k	96	212 762		2216,2708
100 000	1266	318 490		251,5719
10 000	7291	219 331		30,0824
1 000	17851	62 630		3,5085
100	16389	6 834		0,4170
10	13675	528		0,0386
1	12693	57		0,0045

It seems that among the claimed 1 million Mt.Gox users, there was 69266 accounts with a balance of at least 1mBTC. In total, they were supposed to hold BTC951,441.

- This is 13,744mBTC per holder, which is more than double the average general holding of 5,900mBTC.
- The median of about 500mBTC was significantly higher than the general median of only 70mBTC.
- Distribution parameter j was found to be between 0.34-0.42 whereas it was assumed to be 0.25 when making the last general distribution. Adopting this makes the distribution more "middle-classed" as the bulge in the middle sized holdings is higher.
- In general the results confirmed the distribution model.

=> Due to findings above ("j", median, and the fact that Gox had only 70,000 customers despite the claims), I will be prompted to revise the Bitcoin # number of users downward from the 2.0 million in the previous month.

[rpietila]

The end-of-March figures will be out soon.

As I warned, there will be a reduction in the number of Bitcoin owners. The previous total of 2.0 million was based on all kinds of lies, including Mt.Gox claiming that they surpassed 1 million users already last year (they only now only had 85,000 users with balance, of which 70,000 had more than 1mBTC).

As we correct for the exchanges having much fewer customers than they claim, we must turn increasingly to the blockchain to determine the number. The blockchain, as of block 290,000, has only 1.34 million non-dust addresses (+29 million dust addresses). With the new revelations, it becomes necessary that the number of owners is less than the number of addresses, somewhere around a million. My analyst is still working on it.

What the Gox leak provided nicely, is the average balance in each of the cohorts, relative to the % decrease of number of people when going from one cohort to the next, "bigger" one. It is hard for me to even explain what this is but I just say that it is a very important missing piece of information that we can use to construct the distribution.

So this month figures have been totally reconstructed, but will no doubt look familiar, since they have to conform to the unchangeable statistical laws. Only the understanding of Bitcoin economy, and therefore the values of the parameters, have changed.

[_ajv_]

Great work. I'm looking forward to these new figures as a rather fresh bitcoiner, wanting to know its position among other bitcoin owners.

Any chance making the data any more detailed? Like, could you present the data as a cumulative graph, with number of bitcoins as X-axis and percentage of owners as Y-axis.

[diotime]

Thank you for this thread.

Do you think that the two recent bitcoin public donations (first to Dorian and second to Wales) could be analysed to help better understand the distribution of bitcoin wealth by owner ?

Dorian : 1Dorian4RoXcnBv9hnQ4Y2C1an6NJ4UrjX
Wales : 1McNsCTN26zkBSHs9fsgUHHy8u5S1PY5q3

Anybody knows how I could get the raw data values of all the donations to these two addresses, i.e. date time + from address + amount ?

[rpietila]

I got involved with a simple alternative methodology of determining the number of Bitcoin users:

By fixing the number of addresses (on average) used by people in different categories, we can allocate the 1.34 million used addresses to the different people, disregarding the address balances, and just caring about the number of them. Then we allocate the bitcoins with the usual model that ensures the statistical validity of the result.

Please comment on my assumptions:

- Satoshi has 19600 addresses (Sergio's result, they are all 50 coins unspent coinbases)
- 100kBTC+ people have 1000 addresses (some have unspent coins driving the addresscount up)
- 10k+ people have 50 addresses
- 1k+ people have 20 addresses
- 100+ people have 7 addresses
- 10+ people have 3 addresses
- 1+ people have 1.5 addresses
- 0.1+ and smaller have 1 address
- 0.01+
- 0.002+

3 million coins are in exchanges or similar joint custodies, and their wallets are on average 100 coins per address, which is 30,000 addresses total, which is deducted from the amount available for people. The 0.5M lost coins are in 10,000 addresses of 50 coins each.

[arklan]

i personally have two wallets, one on my phone one on my pc, and have somewhere around 50 addresses in total, on a guess.

but currently i don't have even .02 btc. in the past i have had more though, and done a group buy on this forum for some asics, so i have a bunch of addresses related to that.

[rpietila]

i personally have two wallets, one on my phone one on my pc, and have somewhere around 50 addresses in total, on a guess.

but currently i don't have even .02 btc. in the past i have had more though, and done a group buy on this forum for some asics, so i have a bunch of addresses related to that.

We need to clarify what constitutes an "address":

- The blockchain has 1.34 million addresses with a balance of BTC0.001 or more.
- It has 29 million addresses with a balance of less than that.
- Empty addresses are not counted because it is not possible, and their presence does not change the equation.

So even though you have used 50 addresses, it is likely that your current balance is spread between 2-4 addresses that cross the 0.001 threshold and several, which are less.

ADD: Even though we must revise the BTCowner estimate down, the growth rate in # of addresses has actually been 24.5% over the last 3.7 months, which is on par with the long-term price trend of 23.5% per month.

[CMMPro]

So, you are estimating how many "BTCowner" at this point in time? 111,111?





 

[rpietila]

I am trying to make up something from the current data. But it is hard - Mt.Gox celebrated 1 million users, dataleak revealed 70,000.

Coinbase claims 1 million users, does it also round up with a heavy hand?

How many bitcoins are stored in exchanges and similar services? 3-4 million?

Mt.Gox data shower an average balance of 12 bitcoins. For many, that is not even all, meaning that the actual average is higher. Mt.Gox, because it is an old exchange, probably hosted larger balances than the others, otoh many had withdrawn them due to the problems.

I think the evidence points out to 700k-1M users but would like to hear comments on the methods and not just "voting on the results"

[Carlton Banks]

I am trying to make up something from the current data. But it is hard - Mt.Gox celebrated 1 million users, dataleak revealed 70,000.

Coinbase claims 1 million users, does it also round up with a heavy hand?

How many bitcoins are stored in exchanges and similar services? 3-4 million?

Mt.Gox data shower an average balance of 12 bitcoins. For many, that is not even all, meaning that the actual average is higher. Mt.Gox, because it is an old exchange, probably hosted larger balances than the others, otoh many had withdrawn them due to the problems.

I think the evidence points out to 700k-1M users but would like to hear comments on the methods and not just "voting on the results"

What evidence is there that the Mt Gox leak was complete? There are a few potential reasons for the hacker to release an incomplete dataset, plus they didn't necessarily get the whole dataset. How many accounts with all zero balances were in the data? Why were transaction history and full personal details not released? Clearly not all types of account data were leaked, which implies either incomplete access or incomplete disclosure.

[rpietila]

I am trying to make up something from the current data. But it is hard - Mt.Gox celebrated 1 million users, dataleak revealed 70,000.

Coinbase claims 1 million users, does it also round up with a heavy hand?

How many bitcoins are stored in exchanges and similar services? 3-4 million?

Mt.Gox data shower an average balance of 12 bitcoins. For many, that is not even all, meaning that the actual average is higher. Mt.Gox, because it is an old exchange, probably hosted larger balances than the others, otoh many had withdrawn them due to the problems.

I think the evidence points out to 700k-1M users but would like to hear comments on the methods and not just "voting on the results"

What evidence is there that the Mt Gox leak was complete? There are a few potential reasons for the hacker to release an incomplete dataset, plus they didn't necessarily get the whole dataset. How many accounts with all zero balances were in the data? Why were transaction history and full personal details not released? Clearly not all types of account data were leaked, which implies either incomplete access or incomplete disclosure.

- The addresses in the leak contained 0.9 million coins, which agrees well with the general understanding about how much there was at Mt.Gox
- Everybody can check their balance; I haven't heard reports of missing balances, I have heard that the balance has been correct
- Zero balances are omitted, as they are in my "# of bitcoinusers calculation"
- The distribution of coins in the balances (see my analysis upthread) satisfies some intricate statistical requirements that would have been difficult to fake

[Carlton Banks]

[...]
I think the evidence points out to 700k-1M users but would like to hear comments on the methods and not just "voting on the results"

What evidence is there that the Mt Gox leak was complete? There are a few potential reasons for the hacker to release an incomplete dataset, plus they didn't necessarily get the whole dataset. How many accounts with all zero balances were in the data? Why were transaction history and full personal details not released? Clearly not all types of account data were leaked, which implies either incomplete access or incomplete disclosure.

- The addresses in the leak contained 0.9 million coins, which agrees well with the general understanding about how much there was at Mt.Gox
- Everybody can check their balance; I haven't heard reports of missing balances, I have heard that the balance has been correct
- Zero balances are omitted, as they are in my "# of bitcoinusers calculation"
- The distribution of coins in the balances (see my analysis upthread) satisfies some intricate statistical requirements that would have been difficult to fake

That's fairly convincing. Although you are relying on a secondary assumption, that Gox accurately reported their total for BTC obligations in full. They're the sole source of that figure, and they're proven to be unreliable in many ways (most intriguing is the apparent contradiction between how many coins they lost to fraudulent withdrawal claims and the recent analysis that has appeared in the press).

Still, it would be unlikely to remove a significant number of accounts without significantly altering the distribution according to your analysis of the blockchain as a whole. That's the strongest argument that the data is more or less complete, for sure.

[keystroke]

Looking forward to the March stats. Will they be out soon?

[rpietila]

Looking forward to the March stats. Will they be out soon?

We have run into unexpected difficulties. In short, the fall of Gox and the lies that surfaced, shattered our belief in the data that we used to use. The total number of users I cannot estimate at the moment. The distribution between large and small users is easier to estimate. I await for any contribution from others to get it back on track. Any piece of data, from any country, service, or point of time, as long as it is truthful. We can connect them.

[Vlad2Vlad]

Translation:  Vlad was right and Bitcoin is very poorly distributed with the large majority of wealth in the hands of a few, thus making Bitcoin very much centralized and eerily similar to a Fiat 2.0.


That's just my guess of course and the true, freedom loving libertarians on this thread will surely delete this message.

Enjoy.

[Siegfried]

Translation:  Vlad was right and Bitcoin is very poorly distributed with the large majority of wealth in the hands of a few, thus making Bitcoin very much centralized and eerily similar to a Fiat 2.0.


That's just my guess of course and the true, freedom loving libertarians on this thread will surely delete this message.

Enjoy.

A guess how many people have more than 100 BTC?