Who Owns All the Bitcoins?
Humanity has spent their relatively brief time on this planet chasing a variety of wealth—gold, spices, cocoa beans, even bricks of compressed tea—and modern humans are no exception. The monetary wealth of our planet is higher than it’s ever been, and with 2013 estimates clocking in at about $241 trillion, every one of earth’s seven billion or so people have a stake of around $35,000.
But the consolidation of wealth is nearly as old as humanity’s quest to acquire it. The quick review of the actual distribution of resources, currency, and goods paints a very different picture.
One of the least balanced distributions is that of beleaguered virtual currency Bitcoin. After a scandal involving the Internet’s “anonymous market” site Silk Road and a major theft leading to the bankruptcy of one of its largest exchanges, Bitcoin’s fortunes have careened as wildly as its market value. But it remains a popular investment opportunity, and while estimates vary regarding the total number of Bitcoin owners around the world, the general consensus holds that just one percent of total Bitcoin owners worldwide control between seventy and eighty percent of all Bitcoins.
The richest cream in this virtual crop is held by enigmatic Bitcoin founder Satoshi Nakamoto, who is estimated to have mined about a million Bitcoins in the currency’s early days. Runners-up include the Winklevoss brothers (perhaps best known for their infamous lawsuit against Facebook) and the Federal Bureau of Investigation, which seized 174,000 Bitcoins when it shut down the first iteration of the Silk Road.
How will the distribution of Bitcoin wealth compare to other methods of payment in the wake of Mt. Gox and other hiccoughs in the wild ‘n’ wooly world of virtual currency? Only time will tell. But with the last Bitcoin primed for mining around 2140 or so, we’ve got plenty of time to see which movers, shakers, dreamers, and daredevils will reap the remainder of this virtual fortune.
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Transcript: Who Owns All the Bitcoins?
Bitcoin Distribution vs. The Global Wealth Gap
We live in a world of inequalities – both moneywise and Bitcoinwise. Just like the bulk of hard money and fixed assets, the vast majority of Bitcoins are possessed by a few rich individuals.
The World Is Richer Today than Ever Before
In 2013, the wealth of Earth reached $241 trillion, which is 9% higher than in 2012 and 5% higher from 2010, and a whopping 106% higher than in 2000.
But a Much Bigger Pie Is Sliced up in a Way Some Think Is Unfair
Between 2010 and 2013 the share of the wealthiest grew by 4 percentage points, as the share of the poorest shrunk by 2 percentage points.
Bitcoins Were More Numerous and Precious in 2013 than in Any Previous Year
On 27 Dec 2013, the Bitcoin market cap, (i.e. the total value of Bitcoins) stood at $9.762bn.
But the value of all Bitcoins is still only 2.5% of the market value of Google.
Is the Allotment of Bitcoins Just as Skewed for the Rich as the Distribution of Global Wealth?
0.06% of the addresses contain 68.9% of all Bitcoins – (equal to BTC 8352315.562 or $6,055,428,782)
98.95% of addresses contain 0.68% of all Bitcoins – (equal to 82215.298 BTC or $59,606,091)
A big BTC stash is rarely is rarely stored on a single address – for security reasons, such a deposit is normally sliced up to pies of 50-100 BTC and stored on multiple addresses controlled by the same person.
So who are the people behind the Bitcoin addresses? The answer is… no one knows. A key trait of Bitcoin is anonymity: we can see how many Bitcoins an address contains but we don’t know exactly who it belongs to.
But according to rough estimates, 280,000 people owned Bitcoins at the end of 2013.
Gaining exact figures for these anonymous holdings is difficult. Recent estimates have shown that because the majority of people with substantial shares spread their BTC wealth across multiple addresses, the wealth disparity in Bitcoin may not be as extreme as the address data would suggest. In fact, it’s likely that the top 1% of BTC holders only own around 78% of all BTC, not 96%.
The known super-rich of the BTC economy
- Satoshi Nakamoto: BTC 980,000
- The FBI: BTC 174,000 (seized through the closure of Silk Road)
- The Winklevoss Bros.: BTC 120,000
How Does BTC Wealth Share Compare to Global Wealth?
It’s clear that wealth share in the world of Bitcoin is even more unevenly distributed than in the world at large.
The bottom 70% of Bitcoin owners own 1%, as the top %0.71% own 55%.
The bottom 70% of real world own 3% as the top 0.71% own 41%.
As BTC is a new currency that favours early adopters it is easy to understand why so few hold so many. In the future it will be interesting to see whether BTC’s wealth disparity continues or becomes more even for all holders. What do you think?
All quoted values are in USD.
- Bitcoin Distribution by Address – bitcoinrichlist.com
- Distribution of Bitcoin Wealth by Owner – bitcointalk.org
- GDP Breakdown at Current Prices – unstats.un.org
- US Government Owns the Single Largest Bitcoin Wallet on the Internet – wired.com
- Google Inc. (GOOG) Market Data – uk.finance.yahoo.com
- Credit Suisse Global Wealth Report 2013 – publications.credit-suisse.com
- Credit Suisse Global Wealth Report 2010 – piketty.pse.ens.fr
- Blockchain – blockchain.info
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