The basic idea behind the inception of cryptocurrency is to decentralize and take away the rigid control that some banks and organizations have on the monetary transactions. However, according to the latest report of the PARSIQ, an organization involved in the monitoring of the blockchain and related technologies, most of the Bitcoin wealth is concentrated with a small number of wallet holders. The organization was studying this trend for some years and found that nothing major has changed with a handful of accounts continue to dominate Bitcoin holding for the past couple of years.
The finer details of the report reveal a total of 6,457 account holders have around 50% of the total wealth related to the top five coins. If we exclude the number of people who hold Bitcoin, this number drops down to 1,805. On a more important point, the report suggests that all these individuals and organizations wield a strong dominance on the overall activities of the crypto sphere and their dominance is largely remained unchecked because of the large power these entities hold. The larger point this research report makes is about the objectives of achieving a more decentralized structure with cryptocurrencies, which should be free from the strict government controls and monetary agencies. But going by the things now where “White Whales” have dominated the cryptocurrency scenario, the whole concept on which the cryptocurrency started seems to be under subversion now. Further analysis of the top-five cryptocurrencies points towards the fact that ripple cryptocurrency is the most concentrated one with almost 50% of the XRP being controlled only by the 14 wallets. Even in the case of Ethereum, the results are not very optimistic, with around 346 wallets dominating the scenario of holding Ethereum.
In order to enter into the top 50% of the Bitcoin wallet list, the research report revealed that one has to have 347 Bitcoins translating into amount equivalent to $3.8 million. Another important aspect which is quite insightful too is that the majority of these accounts/ wallets have been registered in the last two years with major surge happening only post-2017. It is also important to note that Bitcoin’s earnings and wealth are increasingly becoming more distributed over the last couple of years although the situation hasn’t changed when it comes to the accumulation of the digital coin which remains concentrated only in the hands of a few individuals.
According to the co-founder of PARSIQ, Andre Kalinowski, the time has come to open up the cryptocurrencies for a wider set of users as the basic premise of the digital coins is to enhance transparency and equitable distribution of wealth. The diversified distribution of coins will help the monitoring purpose also and make sure that the various ill practices associated in the crypto sphere also come under surveillance. The stakeholders involved in the cryptocurrency and blockchain technology also need to make concerted efforts to democratize the distribution of digital coins for the long term well-being of the crypto industry.