Main blockchains in the industry, the Bitcoin and Ethereum networks also host the two most important cryptocurrencies on the market. The latter are naturally targeted by the majority of crypto investors given their value. This results in a tough battle on the market to manage to snatch part of the supply in circulation of bitcoin and ether. However, the bulk 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 showing the distribution of BTC supply on the network. Analysis of this table reveals a concentration of bitcoins in circulation on wallet addresses holding 100 BTC or more. Indeed, the latter, which represent only less than 0.1% of the addresses of the network, alone hold 62% of the supply of bitcoins currently available.
Furthermore, the data shows that 99.65% of addresses on the network each hold 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. Thus, the centralization of holdings on the network suggests that the main objective of BTC holders is to make profit. Such a strategy would risk hindering the adoption of BTC as a means of payment.
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. Indeed, 68% of the ethers in circulation are held by only 1295 addresses on the network. The latter individually own more than 10,000 ETH, with 7 addresses having a balance of more than one million ETH.
The centralization of assets on Ethereum is all the more alarming as 99.94% of addresses (83.5 million addresses) hold only 10% of available ETH. In addition, 61 million of them each own less than 0.01 ETH, which is equivalent to less than 0.1% of the supply of ethers in circulation.
The high concentration of bitcoins and ethers on their respective network stands in stark contrast to the decentralization that is regularly advocated within the cryptosphere. It proves once again that the mass adoption of these assets is more driven by their ability to serve as an investment vehicle.
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