The main chains in the industry, the Bitcoin and Ethereum networks are also the two most important cryptocurrencies on the market. Most crypto investors are naturally focused on the latter given their value. This leads to a fierce market battle to remove some of the circulating supply of bitcoin and ether. However, most of this supply is held by a handful of crypto addresses.
62% of bitcoins in circulation are held by less than 0.1% of network addresses
On August 11, analyst Laurent Pignot shared on Twitter a chart from the InToTheBlock platform that shows the distribution of BTC supply on the network. An analysis of this table shows the concentration of bitcoins in circulation on wallet addresses that have 100 BTC or more. In fact, the latter, which represent less than 0.1% of the network’s addresses, alone hold 62% of the current supply of bitcoins.
Additionally, the data shows that 99.65% of addresses on the network have less than 10 BTC. Although this corresponds to more than 42.8 million BTC addresses, these only share 16.85% of the BTC supply in circulation. Therefore, the centralization of holdings on the network suggests that the main objective of BTC holders is to make a profit. Such a strategy would hinder the adoption of BTC as a payment method.
A much more alarming situation on Ethereum
The observation is the same on the native blockchain of the largest altcoin on the market with much more worrying statistics. In fact, 68% of the ethers in circulation have only 1295 addresses on the network. The latter alone has more than 10,000 ETH, and 7 addresses have a balance of more than a million ETH.
The centralization of assets on Ethereum is more alarming because 99.94% of addresses (83.5 million addresses) only have 10% of the available ETH. Additionally, 61 million of them have less than 0.01 ETH, which is equivalent to less than 0.1% of the circulating ether supply.
The high concentration of bitcoins and ether on their respective networks is in stark contrast to the decentralization that is regularly advocated within the cryptosphere. It proves once again that the overloading of these assets is driven more by their ability to function as an investment vehicle.
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Luc Jose Adjinacou
Far from dampening my enthusiasm, an unsuccessful investment in cryptocurrency in 2017 only increased my enthusiasm. So I decided to study and understand the blockchain and its many uses and pass my pen knowledge related to this ecosystem.