These people control bitcoin

10,000 individual investors in bitcoin control about a third of the cryptocurrency in circulation, according to a study by the US National Bureau of Economic Research (NBER).

This comes as the concentration of ownership is difficult to determine, as many of the largest codes often represent not individuals, but exchanges and other entities that own Bitcoin on behalf of other investors.

However, using a method of data collection that distinguished between accounts belonging to brokers and individuals, NBER researchers were able to find that accounts or codes belonging to individuals held about 5.5 million bitcoins at the end of last year, which rose to 8.5 million bitcoins during the year. current. Additionally, the 1,000 largest individual investors controlled around 3 million bitcoins, and the focus could be even greater.

“This measurement of concentration is likely to be underestimated because we cannot rule out that some of the largest codons are controlled by a single entity,” wrote researchers Igor Makarov and Antoinette Schauer.

For example, the data did not identify the ownership of early bitcoins held in about 20,000 accounts that were believed to be owned by a single person, the founder of this coin (Satoshi Nakamoto), and considered them to belong to 20,000 different individuals.

The data also shows that the concentration of Bitcoin mining runs deeper, with NBER finding that the top 10% of miners control 90% of Bitcoin mining capacity, and only 0.1% (about 50 miners) control 50% of mining capacity.

Such a high concentration could leave the Bitcoin network vulnerable to a party or group controlling 51% of the network’s power, where a single complicit group of miners or a single miner could be able to control the majority of the network.

The National Bureau of Economic Research also found that focus also decreases after sharp increases in the price of Bitcoin, which means that the probability of the network taking control of 51% is higher when the price of Bitcoin drops sharply.

It is noteworthy that the block chain system relies on a collective documentation process for the transfer of ownership of Bitcoin, and in the event that a person or a related group acquires 51% of the mining power, this enables it to control the fate of trading operations and recognize ownership of Bitcoin or even cancel it.

“Our results indicate that despite the significant interest that Bitcoin has received over the past few years, the Bitcoin ecosystem continues to be dominated by large and focused players, whether they are major miners, Bitcoin holders or exchanges,” the researchers wrote. “This inherent focus makes Bitcoin vulnerable to systemic risk and also means that the majority of the gains from further adoption are likely to fall disproportionately to a small group of participants

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