How Bitcoins Are Distributed?

How Bitcoins Are Distributed?

Bitcoin is a decentralized cryptocurrency, but as it happens with fiat money, bitcoins are distributed unevenly.

In math language, they follow a variant of the Pareto distribution. A Pareto distribution is often used to describe the allocation of wealth among individuals. Its main idea is that a large portion of the wealth of any society is owned by a small percentage of people. This idea is expressed simply as the "80-20 rule" (or the Pareto principle) which says that 20% of the population controls 80% of the wealth.

That should be the situation in Bitcoin as well. But, in fact, as has reported, bitcoin distribution is even more uneven.

According to data published by for 2017, a 58.1% of all bitcoin addresses hold a maximum of 0.001 BTC each. These are 12,213,838 addresses and the total sum of bitcoins they hold is just 2,186 BTC or a mere 0.01% of the total number of BTC in circulation today. The value of these coins is a little above the $12 million mark.

Another 18.1% (3,811,060 in absolute numbers) of all bitcoin addresses hold 0.001 to 0.01 BTC with a total of 14,928 BTC. This number is just 0.09% of all bitcoins minted with value at $83 million.

Thus, the vast majority 76% of all valid bitcoin addresses hold a tiny fraction of all bitcoins: just 0.1%!

There are also 2,982,301 (or 14.19%) bitcoin addresses which hold 0.01 to 0.1 BTC. The total bitcoins they hold is 93,201 BTC or just another 0.56% of total bitcoins.

Next, there are 1,359,848 (or 6.47%) addresses which hold 444,325BTC or 2.67% of all bitcoins. Each one of them has a balance 0.1 to 1 BTC.

This is another significant statistic: 96.89% of all addresses (58.1+18.13+14.19+6.47 = 96.89) hold a maximum of 1 bitcoin each. And their total balance in bitcoins is just 3.33% of all bitcoins minted today (2.67+0.56+0.09 + 0.01 = 3.33).

So, the rest 96.66% of all bitcoins today are owned by a tiny 3.11% of addresses.

Thus, in bitcoin, only 3% of the population (addresses) controls over 96% of the wealth (bitcoins).