About 10,000 of the largest individual investors control more than a third of the bitcoin market. This is according to a study published on the National Bureau of Economic Research (NBER) website ), writes Forbes.
The authors of the work, Igor Makarov (London School of Economics) and Antoinette Shoar (Massachusetts Institute of Technology), have developed a set of algorithms that allows addresses to determine ownership of the bitcoin market.
On their basis, they found that at the end of 2020, intermediaries, such as crypto exchanges, controlled about 5.5 million bitcoins (about a third of the cryptocurrency in circulation), individual investors together – about 8.5 million bitcoins.
At the same time, the 1,000 largest individual investors control almost 3 million bitcoins. About 5 million bitcoins are held by the top 10,000 investors – about a third of their total.
“This concentration figure is most likely an understatement, as we cannot rule out that some of the largest addresses are controlled by the same person,” Makarov and Shoar said.
The data collected by researchers shows that the concentration of miners is even higher: 10% of miners control 90% of Bitcoin mining capacity, while 0.1% of them (about 50 miners in total) control 50% of mining capacity.
Such concentration could make the Bitcoin network vulnerable to an attack where a group of miners, or even one of them, would gain control of it, notes Bloomberg.
Scientists emphasize that, despite the growing attention to bitcoin over the past few years, its ecosystem is still dominated by big players, be it miners, bitcoin owners or exchanges.
“Such concentration exposes bitcoin to systemic risk and suggests that most of the benefits from further adoption are likely to disproportionately accrue to a small group of participants,” the study emphasized.
