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Showing 3 of 3 results by jblevs
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Board Economics
Re: A history of the wealth distribution in Bitcoin {chart}
by
jblevs
on 04/03/2014, 09:08:13 UTC
We must be careful when we interpret the chart, many of the bitcoins in large wallets are owned by many people but services keep the coins in custody i.e. Exchanges
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Topic
Board Economics
Re: A history of the wealth distribution in Bitcoin {chart}
by
jblevs
on 03/03/2014, 21:47:56 UTC
Very nice data and chart. What did you use to perform the analysis? Did you dump the chain to a DB? Query the bitcoind software directly? I'm interested in doing a bit of similar data mining, but need a pointer to get started.

Used a DB from http://codesuppository.blogspot.co.uk/

You might find his blockparser useful. At coinometrics we are now using Bitcore and are working on dumping the chain into a DB as querying the blockchain directly for this information takes too long.
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Board Economics
Topic OP
A history of the wealth distribution in Bitcoin {chart}
by
jblevs
on 03/03/2014, 15:12:08 UTC
See the chart for a history of the wealth distribution across addresses.

http://i.imgur.com/6mbJfZ1.png

Here is some of my interpretation from the chart but would welcome more!

As services to users of Bitcoin have proliferated, it has been accompanied by an increase in the concentration of holdings. Currently, addresses with over 1000 BTC contain approximately half of all bitcoins in circulation. The concentration highlights the degree to which there are large holders of the currency or the amount of centralised services. However, this was not always the case.

In the beginning there was Satoshi and some friends. There were mining coins but always using a different address in the coinbase transaction. Amalgamation started 16th Jan 2009 with some of the mining rewards being pooled into single addresses. By March 2009, there was an address with over 10,000 BTC in it. In September 2009, there was an address with over 50,000 BTC owned by the same person (Satoshi).

In 2010, there is an increase in amount of amalgamation that took place on the network. The decline in the proportion of total Bitcoins held in wallets containing between 50 and 100 BTC meant that miners were consolidating their holdings and selling them on exchanges. As the block reward only halved in November 2012, the increase in holdings in wallets with less than 50 BTC mark the beginning of pooled mining and trading on Mt Gox.

Post 2012, the amount of coins held in addresses containing between 50 to 100 BTC are above my expectation and raises the possibility that a large number of these coins are lost. This conjecture is backed up by Bitcoin days destroyed evidence. There remain approximately 4 million coins that have never been spent, many of which are probably contained in the red section.

By the time that the reward halved in November 2012, mining pools accounted for approximately 85% of computing power. The halving of the reward and the structure of mining meant that there was not a pronounced increased in the amount of coins stored in addresses with 25 BTC.