When Bitcoin first came out more than a decade ago, it promoted a sense of equity and fairness that hasn’t been typical for the traditional financial system. However, the current distribution of coins shows that the gap between Bitcoin poor and rich is even more dramatic.
Bitcoin Cannot Address Wealth Inequality
Bitcoin has always seen a massive disparity when it comes to the distribution of coins. While the cryptocurrency came out as a reaction to the financial crisis caused by greedy, “too big to fail” banks, it eventually adopted the same inequality that has been gradually expanding in the traditional financial world.
In the first years, the Bitcoin distribution was heavily influenced by miners. Thus, the Bitcoin rich were those who had the knowledge and capabilities to generate new coins through the mining process. The level of ignorance at the time was so striking that one man accidentally threw away his hard drive with the private keys of 7,500 Bitcoins.
However, once the cryptocurrency became more popular, the nerds were replaced by investors. Thus, the Bitcoin gates could be open especially by those who had the privilege to enjoy a high buying power, i.e. the wealthy ones. This is how high net worth individuals and institutional investors took control over the crypto market and transferred the wealth inequality to the coin distribution. This will never change because blockchain is decentralized and doesn’t act as like a communist realm.
Bitcoin Distribution Vs US Wealth Inequality
So let’s see how does the distribution of Bitcoin compare to the wealth distribution in the US. We’ll use BitInfoCharts data for Bitcoin and a Statista chart that shows the US wealth inequality as of 2016. Here is the wealth disparity in the US:
Those highlighted portions can help you better compare to the Bitcoin’s distribution of coins among addresses.