As crypto makes its glamorous entry into the mainstream, the traditional market is forced to compare each aspect of cryptocurrencies to its fiat counterpart. Interestingly enough, Tamas Blummer, a prominent technologist and Bitcoin software developer in the space, uncovered information that questions crypto’s ultimate goal to provide an equal market for its users. Considering the totality of the ecosystem, Blummer utilized Gini coefficient to measure unequal distribution of wealth among Bitcoin [BTC] holders, sharing his findings in a recent blog post.
Blummer identified that the biggest heaps of Bitcoins are likely in hot, cold wallets of exchanges that represent the wealth of many users. As a result, he focused only on the most common forms of blockchain transactions, with two outputs. Following the collection of test data, the entrepreneur assumed each BTC transaction to be proportional to one’s wealth.
He explained this move as, ”The distribution of these transaction’s aggregate input values therefore leads to an underestimation of the Gini coefficient of Bitcoin wealth.”