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0/ I'm glad we started the debate on Bitcoin wealth disparity yesterday, because it got us one step closer to understanding the issue.
If you're open-minded enough to come on this learning journey with me, I'll share a summary of what I learned.
If you're open-minded enough to come on this learning journey with me, I'll share a summary of what I learned.
1/ If we look at the RAW numbers on @bitinfocharts, ~3% of addresses own 95% of Bitcoins.
But, this data is not ideal. Here's why:
But, this data is not ideal. Here's why:
2/ The first BIG problem with this raw figure is that exchanges represent the top wallets. Of the top 10 richest Bitcoin addresses, 7 of them are exchange wallets.
3/ The second big problem is that it doesn't account for lost and missing coins.
4/ @ArcaChemist does a great job trying to adjust for both of these inconsistencies. The result he gets is that 61% of BTC is owned by 2% of wallets.
5/ The caveat with the above figure is that there's a ton of addresses with less than $100 worth of BTC in them. If we completely remove these addresses from the equation, we end up with 10% of addresses owning 95% of all BTC.
6/ Hence, no matter how you run the numbers, we cannot deny that there is wealth concentration. How concentrated exactly? ... We will never fully know.
The GOOD news is that the wealth is spreading over time.
The GOOD news is that the wealth is spreading over time.
7/ But this doesn't mean we should just ignore the data all together. It's an issue that we should at the very least DISCUSS.
8/ During the debate, it became clear that there were two big questions for us to think about:
Question 1: Is it fair?
Question 2: Is it bad?
Question 1: Is it fair?
Question 2: Is it bad?
9/ On "fairness": Defining what is "fair" or "unfair" is TOO complex and subjective. I do not think this is a worthwhile debate to have.
Personally, I think Bitcoin's initial distribution is more "fair" than the existing system we have in place today. Others may disagree.
Personally, I think Bitcoin's initial distribution is more "fair" than the existing system we have in place today. Others may disagree.
9/ On "badness": This is where I still have unanswered questions. See below.
10/ Given the high concentration of Bitcoin on top exchanges, is that "bad"?
11/ Given that handful of people may have the power to manipulate the markets, is that "bad"?
12/ Or do we believe that the problems we see with wealth concentration in fiat may not arise with Bitcoin?
Finally, for those of you who chose to attack me personally, I hope you will one day learn to be more open-minded.
Because the minute we stop asking questions is the minute we stop making progress.
Because the minute we stop asking questions is the minute we stop making progress.
