Cryptocurrency Concentration - Just 4% Own Over 95% Of Bitcoin

Tyler Durden's picture

Bitcoin has been making a lot of news lately. The cryptocurrency shot up in value by over 200% in 2017, making many people fear that the market is in a bubble. Last week, China decided to close its bitcoin exchanges, which caused investors around the world to panic about the currency’s long-term viability. But asks, how many people own bitcoin, and how is the currency distributed around the world? Check out our new visualization.


Our graph represents the entire bitcoin market, which has a value of around $60 billion. For comparison, that’s bigger than several well-known companies, like Fed-Ex and General Motors. We then divided the value of the bitcoin market by address. As you can see, over 95% of all bitcoins in circulation are owned by about 4% of the market. In fact, 1% of the addresses control half the entire market. 

There are a couple limitations in our data. Most importantly, each address can represent more than one individual person. An obvious example would be a bitcoin exchange or wallet, which hold the currency for a lot of different people. Another limitation has to do with anonymity. If you want to remain completely anonymous, you can use something called CoinJoin, a process that allows users to group similar transactions together. This makes it seem like two people are using the same address, when in reality they are not. 

So it’s a complex situation. but let’s try to break bitcoin down as simple as possible. Bitcoin is just a type of money, like dollars and euros. The main difference is that there isn’t a sovereign government backing the currency, and it instead lives online. This is possible thanks to something called the blockchain. Banks and companies must keep detailed records of where they send money, marking it possible to detect fraud and criminal activity. The blockchain works differently because it breaks each transaction into tiny components, routes the pieces through a computer network, and directs them to a recipient who can then re-assemble the code together. If you don’t have the right key, you can’t own a bitcoin. And if you aren’t at the right digital address (think your home network’s IP address), then you can’t receive bitcoin.

The technology is hard to understand, and it presents challenges for companies and people who want to use it. That’s why folks typically turn to a vendor like Coinbase to handle their transactions. You know how you carry physical money in your personal wallet? Think of Coinbase as a digital wallet. You use it to buy stuff and pay for services. But be careful—people can steal your digital wallet, and the thieves can be untraceable. And that’s the issue. There’s only a very limited number of bitcoin wallet providers out there. It’s not like you can just go to your local bank and buy some bitcoin.

The big takeaway from all this is that if you are considering purchasing some bitcoin, you have very limited options. There are only a few key players in the game where you can park your investment. And if you do make that purchase, understand that it is highly speculative and unregulated, so prepare for a bumpy ride.

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nope-1004's picture

"Open source and not manipulated"


VD's picture

early stages (ahem "early adopters" heh) of every single ponzi scheme -- the "Satoshi's" own most, selling to greater foolz. same as it ever was...


coinbase is essentially working for the gov collecting everything on every single crypt0-muppet dumb enough to use it.



tmosley's picture

58% of all bitcoin addresses have less than $4 of bitcoin in them. These are dust addresses.

Foolish to presume these are "people". I have a half dozen of these myself. Costs too much to consolidate them into one address at the moment.

Post-Truth Society's picture

I love trading BTC and ETH on GDAX.  My favorite feature is the little switch in the upper left to turn on margin trading.

philipat's picture

Um, 95% of EVERYTHING is owned by just 4% of the people?

CH1's picture

Zero Hedge is becoming Ignorance Central.

See the sensible posts below if you give a shit about reality.

Bay of Pigs's picture

Why, because the wealth distribution chart resembles a pyramid?

And when have you ever been "sensible" on other topics like the government of Israel? Answer: Never.

techpriest's picture

If we're going by the Pareto Principle:

20% of the people own 80% of the wealth
4% of the people own 64% of the wealth (20%^2 and 80%^2)
0.8% of the people own ~51% of the wealth

This is what Pareto observed to be the case for a natural system. It is also observed in command economies: there is always a 1%, but there difference is how you get there and what the average number is.

USisCorrupt's picture

The article can be very misleading for I personally own over 30 Bitcoin Paper wallets/cold storage wallets, physical Bitcoins "Casascius & Titan" ranging anywhere from .10 of a Bitcoin to 15 Bitcoins and all are post August 1st, 2017.

One must realize that the addresses that have dust $5 are mainly wallets on the exchanges associated with account holders such as myself which are 3 in total.

shocktherapy's picture

"Costs too much to consolidate them into one address at the moment."

Seriously ! Up 1000% and it cost too much ?

tmosley's picture

Transaction fees are in terms of bitcoin, not dollars, so yes. The dollar price of bitcoin makes no difference. It could be a million dollars, or it could be a penny, it wouldn't make sense to consolodate them until those fees come way down.

Bunga Bunga's picture

I just did a 200k transaction for 10 cents. That wasn't too much for me.

rsi1's picture

This is the stupidest chart ever, wallets at Exchanges have a lot of the coins, but in reality they are not owned by the exchanges

CH1's picture

Quite right.

Not that the haters will give a shit.

ProstoDoZiemi's picture

Not on coinbase you didn't, unless you were giving eveyone there a handjob....with schpit

Curiously_Crazy's picture

Only half a dozen? You disappoint me ;)

tmosley's picture

I don't do all that much in BTC. Prefer the alts for their superior technology.

buzzkillb's picture

Are you guys just downvoting because of his name? I don't get it. The negative echo chamber is what to now follow on ZH.

TeamDepends's picture

Probably gov spooks or hasbra trolls.

Implied Violins's picture

Actually, some of us shower the crypto religionistas with red arrows in the hopes that they will eventually come to their senses and go back to gold and silver, but nay...apparently this is what they mean by "the bifurcation of the world".

Those who follow the AI genie will descend into hell, while those of us who immerse ourselves in the REAL, TANGIBLE fruits of this world will ascend into heaven. Alas.

tmosley's picture

A, downvotes aren't arguments, and B, Jesus said rich people can't get into heaven. If the Christian heaven is your goal, give away ALL of your money to the poor. Now. Before it is too late.

Implied Violins's picture

I didn't downvote you, but my idea of heaven is more like...Wolf of Wall Street. Fear and Loathing. Animal House. And one needs a SOLID to truly appreciate it.

TeamDepends's picture

Brother, we have at most 2% in cryptos.  It doesn't have to be either/or.  Are FRNs real, tangible?  The paper is, but....

Implied Violins's picture

I'm sorry, but I'd rather have that 2% in food and seeds and water filters. I just don't trust ANYTHING electronic. You know that we 'plebes' never get *any* technological upgrade until our "masters" have completely compromised it, right? Did you read that article I linked to on how the NSA has a back door into EVERY COMPUTER via the hard drive, and possibly even the BIOS chips?

But at least you aren't whole-hog into it. I guess it's worth a hedge, especially with the volatility right now, but still...I sleep well at night knowing I've got something MATERIAL to fall back on once it all formally goes to hell. And NONE of that is in FRN's. ZERO.

IN any case, I wish you well. Never downvoted you except one time you told a joke that made me throw up in my mouth a little. We dream the same dream of freedom. And the ultimate irony? I'm sure if we met, we'd have NO trouble bartering!! Peace and OUT...

Mango327's picture

Perhaps I'm just ignorant, but I am of the opinion that 2% allocation segments need not be mutually exclusive. There could hypothetically exist a future timeline where Blockchain AND seeds retain their value and usefulness. Maybe I should just take some more LSD, this theory is pretty far out there, man. Woah.

ProstoDoZiemi's picture

Just tampon keyboard warriors, every site has a select few 1% that clearly outdo the 99%

shocktherapy's picture

So low balance address are unspendable because of high fees. 

Wow !


Bitcoin transaction time August 22, 2017, 09:25:05 AM  #1 Can we please do something to speed up transaction time and the high transaction fees?

This is getting absurd. I just spent $10 USD to send $7500 but my fee was too low. It may take a week for my transaction to process. Who knows. I should have spent 3x that figure to get processing within 1 hour ($30). With that same fee I could have just used a wire transfer from a bank online and it would have been just as fast as bitcoin. The selling point of bitcoin is that it was supposed to be 'better' than traditional banking services. It's not. 

tmosley's picture

Yes, but only for now. Most of those addresses are just dust. As I noted, less than $4. This will become a problem when Bitcoin reaches a market cap in the millions, when that abandoned dust becomes worth thousands. But of course, the high fees will have been addressed long before that.

Bank_sters's picture

That is why we call it shit coin.   Can you say tulip mania?!

CH1's picture

Can you say "irationally and obsessively brain-locked"?

CH1's picture

58% of all bitcoin addresses have less than $4 of bitcoin in them. These are dust addresses.

Yes, for sure.

Not that the ignorant will care.

MANvsMACHINE's picture

The same ignorant retards who made fun of fonestar any and every time he posted about Bitcoin. If it makes you feel better to believe that Bitcoin will end up at zero, be my guest. Fonestar laughs at you. TMosley laughs at you too.

Zuke Kook's picture

I've gone through about 50 addresses myself since the end of 2012 and I'm rarely active in BTC transactions. You're supposed to use a new address for every transaction and wallets like Electrum keep BTC in several addresses. So this post is not an accurate representation of Bitcoin holdings. I have been saying that BTC and cryptocurrencies are in a bubble since the end of May. There are many indications of that. This is not one of them.

Spaced Out's picture

13 clowns actually downvoted a plain fact. You even provided a verifiable link.

If they're so pathologically anti bitcoin/truth, you have to wonder why they bother reading about it??? Bizarre behaviour!


BallAndChained's picture

> Costs too much to consolidate them into one address at the moment.

Why does it cost so much? Isn't bitcon supposed to be cheap and fast?

Bitcon is supposed to be a currency, so when you move currency to one account it should be free.

I have different accounts at one centralized bank and it cost nothing to move money around as many times as I want. And they didn't waste a huge amount of electricity, sending it to China to solve some difficult math problem. The centralized transfer was instant. No long wait for China to confirm.

That means Centralized is better and more efficient than Distributed.

VD's picture

it really does resemble wealth inequality of USSA currently at most extreme in our history a la 1929 -- this must be yet another coincidence.


keep "stacking" crypt0-doltz right into hands of Deep State.

tmosley's picture

OMG, 99% of people have less than 4 grams of gold (their wedding rings). Gold is a PONZI!!@!@!!

Gaius Frakkin' Baltar's picture

Yeah really. Can we see this same chart in gold?

techpriest's picture

Or per my Pareto example, a chart in anything?

Kaiser Sousa's picture

"what could possibly go wrong...."

 - KryptoCultist -

Bunga Bunga's picture

In contrast to closed systems, open source projects allow to detect any manipulation attempt easily and quickly. You can just look up the source code and tell the world what is wrong.

Curiously_Crazy's picture

It's because up until 3 odd years back nobody really new about it (and if they did, the majority didn't care) and it's only been in the past year it's become the done thing among those who usually put their cash towards stawks, and that's a hell of a new influx of cash without many more coins.

The early adapters, say mining on our CPU's around 2011 before going to GPU's then ASIC's mined a majority of the coins before the big boys even got into town. It was just a tech hobby for nerds.

As one poster noted.. the issue is trying to get out of ones position. It's gonna be one giant pain in the arse because anything over 5K deposited into a bank account at any one times raises immediate red flags for the banks.. "soooo.. where did all this cash come from all of a sudden buddy" the fact that it's none of their business means nothing to gov, who they happily hand over their data to.

Bunga Bunga's picture

Because the smartest people found out about it early, not the powerful and well connected. It is a meritocracy, not an oligarchy.

ProstoDoZiemi's picture

It is 10K that hits the red button

I know that exchanges do the block style withdrawal based on your balance, some do 5K a day some do 5K a day with 10K a week, while others say up to 25k a day, it really depends on the exchange

More or less the little guys get screwed when there will be a panic run  LoL

HRClinton's picture

Earlier today a ZH blogger posted this URL, that is more useful than the bullshit, useless chart in the article.


The central planners's picture

Ahhh!!!   the beauty of decentralization.

loveguru's picture

well that explains the wild swings in price. ain't nothing but a ponzi propaganda. Blockchain holds the real value. Countries will end up creating their own sovereign crypto currencies, Bitcoin will be quashed.