The National Bureau of Economic Research has published a surprising report on BTC and its market supply. According to the new report, about 10k BTC holders own just 27% of the 18.9M BTC in circulation.
The 27% translates to approximately five million Bitcoin. The statistic is antagonizing, given that Bitcoin is the first decentralized digital currency.
By decentralization, it implies that individuals can own a stake in an asset without influencing the market negatively by having more than the other. Bitcoin and other cryptocurrencies were built on the concept of decentralization, and that prompted many to go into the nascent crypto world.
Bitcoin’s Concept Appears To Be Questioned
The study has gotten many mouths wagging and dented the image of the first digital currency. What Bitcoin preaches is in direct opposition to the statistic, Antoinette Schoar pointed out.
The finance professor stated that the study simply means that Bitcoin is still a concentrated ecosystem, despite being made to believe for more than 14 years that it is a decentralized cryptocurrency. Another study brought forward an argument to support the non-decentralization of Bitcoin.
The study focused on America’s wealth distribution as against BTC circulation. According to the study, only 1% of the very rich Americans control about one-third of the total circulation.
The data may be confusing, but it doesn’t stop people from buying Bitcoin. The flagship crypto has no embargo prohibiting people from owning other coins as much as they want.
Experts blame the poor regulatory clarity in the United States as the main factor for the lack of decentralization in the Bitcoin space. Should regulatory oversight become clearer, retail investors will go into the ecosystem, which benefits Bitcoin.
Does Decentralization Equate to Mining Power?
Last year, the issue of decentralization was brought to the fore when Ripple’s CEO Brad Garlinghouse stated that Bitcoin wasn’t decentralized because China controlled it. While discussing whether XRP was security or not, Garlinghouse argued that China’s pool concentration is the reason BTC is staying afloat.
The SEC ruled that BTC isn’t security because it isn’t as centrally controlled as XRP. Ripple Labs controls most XRP, and the coins aren’t mined gradually as BTC. The CEO countered this by saying that China controls the majority of mining, thus, not as decentralized as the SEC claims.
Unfortunately, there’s no relationship between a country’s BTC mining power and decentralization, proving Garlinghouse’s claims wrong. Presently, China is no longer a powerhouse in BTC mining due to its devastating clampdown on miners, which caused miners to relocate to other parts of the globe.