Bitcoin Q&A: Wealth distribution statistics

It's called the Pareto distribution, a naturally occuring law that exists in nature through any means of production or value. It's essentiall what Marx got wrong about Capitalism. Recently popularized by psychologist Jordan B. Peterson (video and wiki links below).

https://en.wikipedia.org/wiki/Pareto_distribution
https://youtu.be/TcEWRykSgwE

Ok agreed addresses are not people. What about steem blockchain exhibiting the wealth disparity where accounts represent people( rarely communities).

You used yourself as a use case for the number of addresses a user may use within a set period. Do you have any quantitative data to look at that shows how many individuals experience a user journey similar to yours?

Awesome to hear you explain this fallacy about bitcoin

which are best colleges to learn Block chain ?

greetings I am an enthusiast of the cryptocurrencies I have been following since 2010 I am from Venezuela when the president evenincio the oil I felt a lot of emotion and because I felt that one way and another our country would join the network of the chain of blocks. WOULD YOU LIKE TO CONCER YOUR OPINION OF THE VENEZUELAN PETRO? as a solution to the twoday pain attack and the economic crisis in which we live? and your suggestions about it

I think at the end he forgot to stress that he's taking about hacks on these exchanges that concentrate wallet addresses not on the bitcoin network itself which is only at threat of the very improbable 51% attack. these exchanges that concentrate wallets in custodial accounts are not miners validating the network. So when he's saying when at attack will happen he means on the exchange that relies on conventional encryption and not on the blockchain consensus security.

There is a problem when the addresses hold small amounts of Bitcoin because transaction fees are determined by the amount of data the transaction sends. A transaction combining, say, ten addresses with small amounts to send a larger amount will have a much larger transaction fee, correct? With these high transaction fees on Bitcoin core, they effectively have frozen the addresses with small amounts in them because the transaction fee to send them is such a high percentage of the value.

Here is how I see the scalability problem.

Every transaction will eventually need to be processed on the blockchain. You can try to find ways to do things off chain. But you will eventually need to enter those transactions on the chain.

If bitcoin is to become a widely used currency, that means millions and millions of transactions every hour of every day.

And so each and every node on the chain will need to be able to process those millions and millions of transactions every hour. If you think they will one day have decentralized laptops and decentralized home miners, I think you are delusional. Bitcoin is pretty much unsustainable as a widely accepted currency.

Andreas knocks it out of the park yet again.

And so on, in the non crypto world 99% of the money, is on 1% richest people. So what the point.

Αντρίκο με όλο τον σεβασμό καλό το παραμύθι αλλά δεν έχει δράκο

Glad I have all mine on a Ledger Nano S 🙂

Thank you for everything you do, Andreas !!!

How do those hundreds of really small addresses make any sense if the fees are so high?? What am I missing??

Andreas, did you ever considered introducing the developers of bitcoin? How close they are to Blockstream?

I like how you explain things. Very easy to understand. I appreciate the channel. Thank you

Great video aantonop, I totally agree with you when you say it's a matter of when, not if. A question for you, could you help me decide if I should invest in this Crypto Debit Card ICO. Looks like the the next Monaco or TenX. Id be happy if it reaches even half the price Monaco reached a month after launch. Let me know. Here’s the link to their page <www.amon.tech>

if its anonymity how the fuck can they even make a statistic

is it worth somebody coming up with a idea to accumulate these micro wallets with less than a few dollars. Together there must be millions of dollars going to waste.

Meh, those complaints about bitcoin wealth distribution you hear are from losers who didn't get in early enough and now can't afford a whole bitcoin. So they whine about it, not understanding the high divisibility means that everyone can have a place at the table if they want it. The fact is they can stop their whining and buy whatever fraction of a bitcoin they can afford right now, but instead they'd rather bash because it's not them doing the winning.

Please keep up these great videos sir, and thank you for your dedication.

Sounds like the gobment needs to get in there and distribute the coins to those that have less…..;)

wealth distribution on Bitcoin is likely to mirror wealth distribution in the real world. Cryptocurrencies are just systems. They can remove habitually immoral parties from the equation (eg banks, central government), and this will obviously have some good effect, but they do not alter our human ethical environment, our personal financial objectives, etc. The majority of people are relatively poor compared to a minority who are relatively wealthy. The distribution of Bitcoin will mirror this, until something changes at the deeper ethical level.

Wtf… How would anyone hack an exchange? How would the hacker guess the keys? How would he get the 24 words of the seed? Anyone?

Yeah, good luck moving those <1$ with the state of bitcoin at the moment

So what if the grid gets wiped out? (EMP’s for example) then we are all back at square one trading various physical items with a corresponding monetary value… something to consider. Then it could be assumed that the people who have accumulated the most precious metals and gems will have the most power and influence, which is not much different then it is now.

Wealth is not distributet equaly in any society. Thats why Andreas`s work is so important. To let the common guy learn about bitcoin so balance can be restored. I accualy hope poor countries get to learn about bitcoin faster than rich countries.

screw coinbase, use gemini

Hi Andreas. We worked together at Nemertes in 2009. Glad to see your new path has worked out for you, and a really interesting video!

1 address can be associated with multiple people (ex. exchanges/multisig)
many addresses can be associated with a single person (ex. HD wallets)

These statistics are basically useless unless you want to spread misinformation.

This issue is not about a new wealth distribution so much is it as about the wealth moving into the hands of a new disruptive creative group.

Why can't we parse out the wallets that make up the 1% Bitocin worth on the top end and the X% of wallets that contain less than $1-2 as that is usually from dust or just not statistically significant?

You have utxo dust? Doesn't it bother you?

Any human endeavor results in uneven distribution given the fact that humans themselves are not equal to one another. Most people who hold thousands of bitcoins are the ones who believed in it early on. That risked their money on some weird project on the internet that nobody cared about. Now when it's become very successful everyone wants a piece of it and complain that they don't have as much as the early adopters. No one would complain about uneven distribution if the Bitcoin project had failed.

Wealth distribution is only a problem if it can be abused. I don't really see that with Bitcoin, but what do I know?

Every time you select receive on your Wallet (ie Ledger Nano) it creates a new address.
So anyone with say 10 Bitcoins that has been buying them in small batches for the last year could easily have 20-40 addresses.
It's the magic of the wallet software that compiles all those small amounts in each address and displays your total amount.

It would have been good for andreas to specific that an individual wallet or server might get hacked and the private keys gained access to, but NOT the bitcoin network itself – to someone ignorant this is very important

Simply saying exchanges have a small amount of bitcoin addresses doesn't completely justify an argument against the statistic. There is a huge level of inequity with Bitcoin right now, that's just a fact. Pretending this is any different than oil tycoons who got in early in the 19th century is both naive and dangerous information to spread.

it's always about the numbers…. kind of sad…that the statistics does not always reflect reality..

Sorry, I'm not on the technical side yet, thus a question:
How does Coinbase (or a similar exchange) redistribute the Bitcoins of its customers, having much fewer cryptocurrency-addresses? Basically, they have control on this distribution, i.e., they keep the (extra) records, how big is the part of a wallet every particular account holds?

I cant wait for coinbase to be replaced with an ethical company,.

I can’t believe the knowledge u have on economics, money and Blockchain tech. You keep stunning me with ur knowledge.

so an erc20 wallet have many addresses? i apologize i'm very new to Blockchain.

I think your response to the first question shows an intrinsic problem with Bitcoin as it currently stands. If I have lots of physical change, I can put it together, and either spend it as one sum, or bank it for a total number. With Bitcoin, your 75 cent adresses are effectively unusable since the transfer fees for the network are extraordinarily high for small transactions. Please comment? Thanks Andreas.

Wealth distribution is uneven… everywhere.

??

🙂 another great video