Researchers have found that around 11,000 units account for more than half of Bitcoin’s on-chain volume.
According to a study published on October 21 by the National Bureau of Economic Research (NBER), the 11,043 on-chain units represent 55% of the volume on the Bitcoin network. Cryptocurrency exchanges make up an estimated three-quarters of the on-chain volume.
The report shows that the 1,000 largest investors control about 3 million BTC, or 15.9% of the bitcoin in circulation, while the next 9,000 largest investors hold about 2 million BTC together, or 10.6% of the bitcoins in circulation.
The report’s authors conclude that despite a surge in new investors attracted by BTC’s bull market in 2021, the network remains heavily centralized, saying:
“The Bitcoin ecosystem is still dominated by large and centralized actors, be they large miners who own or exchange Bitcoin.”
However, the study also finds that individual Bitcoin holders now represent 8.5 million BTC, or 45.1% of the supply.
NBER also noted significant concentration in the Bitcoin mining sector, estimating that the top 10% of miners control 90% of the global hash rate. The report adds that around 50 miners (around 0.1% of the network) control 50% of the total hash power of the Bitcoin network.
Although NBER claims that the focus on hash rate puts the Bitcoin network at significant risk of a 51% attack, the report does not present a hypothetical situation where the world’s top miners would be encouraged to do so.
Continue reading: The number of Bitcoin owners has tripled since 2018: Gallup survey
According to Cambridge University’s Bitcoin Electricity Consumption Index (BECI), the global distribution of hash power has diversified significantly since September 2019 – when China’s market share peaked at 75.5%.
While China’s new crackdown on domestic Bitcoin miners is believed to have fueled the recent wave of miners looking for cheap electricity in North America, Central Asia and Eastern Europe.