Despite Bitcoin’s surging price the digital token remains concentrated in only a few hands, according to a new study.
The top 10,000 individual investors in Bitcoin control about one-third (33%) of the cryptocurrency in circulation, according to a study by the National Bureau of Economic Research (NBER).
Cryptocurrency enthusiasts have long pondered who the largest owners of Bitcoin are since the early days of its existence.
However, by using a data collection method that differentiated between addresses belonging to intermediaries and individuals, NBER has been able to find the former controlled about 5.5 million Bitcoin at the end of last year while the latter controlled about 8.5 million.
Additionally, the top 1,000 individual investors controlled about 3 million Bitcoin, and the concentration could be even greater.
The concentration of miners is even more profound, data shows. NBER found that the top 10% of miners control 90% of the Bitcoin mining capacity, and just 0.1% (about 50 miners) control 50% of mining capacity.
Such a high concentration could make the Bitcoin network vulnerable to a 51% attack, where a colluding set of miners or one miner is able to take control of a majority of the network.
NBER found that the concentration also decreases following sharp increases in the Bitcoin price, meaning the probability that the network is vulnerable to a 51% attack is higher when Bitcoin’s price drops sharply.
