A recent investigation found that 0.1% of the contributors to the Bitcoin network, which represents only 50 miners, control 50% of its mining capacity. If it is extended to the 10% of miners that contribute the most (about 5.000) it is seen that they control 90% of the capacity.
While it is promised that with bitcoin and other cryptocurrencies no central banks are needed, the National Bureau of Economic Research found that some entities represent a significant part of the Bitcoin ecosystem. This sheds a new light on who is the biggest mover in bitcoin and how it is distributed.
Bitcoin is concentrated in about 50 miners
Bloomberg reported that the NBER study found that the top 10.000 individual investors in Bitcoin control about a third of the cryptocurrency in circulation. 14 million BTC were in circulation at the end of 2020, and of those, 8.5 million were controlled by individual investors and 5.5 million were controlled by intermediaries.
But the authors do not rule out that some of the larger addresses are controlled by the same entity. An example of this would be the attribution of 20.000 addresses believed to be owned by "Satoshi Nakamoto» to 20.000 people instead of just one. NREB research claims that Bitcoin is dominated by large operators, and they are concentrated in large Bitcoin miners, holders, and exchanges. Because Bitcoin is concentrated, it is susceptible to systemic risk and also implies that most of the gains from wider adoption are likely to fall disproportionately to a small group of participants.
A “51 percent attack” would be possible, where a group of Bitcoin miners could take control of the network. They would double-spend BTC, reverse transactions, and stop further use of the cryptocurrency, and only 51 of the top Bitcoin miners would have to work together to carry out such a network-wide attack.
Source: Tom's Hardware
