It’s a positive thing to be one percent of the Bitcoin market. According to a National Bureau of Economic Study research, the top owners of Bitcoin regulate a bigger proportion of the cryptos than any wealthy U.S. household level dollar-regulation
As per the research, the leading ten thousand Bitcoin accounts maintain five million Bitcoins worth roughly 232 billion dollars. As per crypto.com, with only approximately 114M people around the world carrying the crypto, this means that roughly 0.01 percent of Bitcoiners have 27 percent of the 19M Bitcoin in circulation.
In the United States, where wealth disparity is now highest in generations, the top one percent of household members own roughly 1/3rd of all wealth, as per the Federal Reserve. The research work, led by professors of MIT Sloan School of Management & London School of Economics, plotted and analyzed each exchange in more than thirteen years since Bitcoin began for the very first time. According to the paper, the consequences of this centralized power are primarily two-fold. For starters, it exposes the whole Bitcoin protocol to risk. Also, it means that most of the improvements from rising costs and rising adoption will benefit a relatively tiny number of investors.
Bitcoin was introduced in 2008. It was introduced as an open-source software proposal with the goal of creating a digital type of physical money without the use of guardians. Anyone could download and install and connect to the network as a “node” & “mine” for Bitcoin.
In the real world, however, Bitcoin has now become extremely centralized. The majority of the population who barter do it through transactions. Mining has become so expensive that only a handful of companies can manage to do it.
Over the last two years, Bitcoin users and their transactions have soared as the cost of 1 Bitcoin has risen from 5,000 dollars in March 2020 to as high as 68,990 dollars last month. The population of citizens who own Bitcoin has doubled & now includes well-known buyers such as Elon Musk, Mark Cuban, and celebs such as Maisie Williams.
However, the overwhelming bulk of Bitcoin exchanges, approximately 90 percent, are based on two main actions which have no real economic purpose, according to the researchers.
The very 1st action is simply how the system functions Bitcoin transactions—it is like making changes for a 50 dollar bill when you go out to eat. The 2nd type is exchanges with wallets by the very same customer in an attempt to conceal their individuality, which is a popular method used by some trying to seek privacy.
Buying and selling continue to dominate the remaining ten percent of volume, which the researchers refer to as “real volume.” Transactions through exchanges & trading desks account for nearly 75 percent of the total volume.
Gambling sites, scams & other illegal uses, which legitimately worry law enforcement & legislators, accounted for lesser than 3 percent.