Are You in the Bitcoin 1%? A New Model of the Distribution of Bitcoin Wealth

Summary

Previous models of the distribution of Bitcoin wealth all depended on an analysis of Bitcoin wallets and Bitcoin addresses. That approach fails inevitably because of the unknowable relationship between people owning Bitcoin, Bitcoin wallets, and Bitcoin addresses. This is a description of a new model of the distribution of Bitcoin wealth built on the assumption that a universal Power Law applies, and that it mirrors the distribution of global financial wealth as reported in the Credit Suisse Global Wealth Report 2016.The Bitcoin distribution that results is tweaked manually to reflect the great mining rewards paid out in the early years to a few people, making it still less equitable than the highly inequitable financial wealth distribution. An estimate of the Bitcoin-owning population is derived from a survey of traffic to Bitcoin-related websites as reported by Alexa.com in comparison to traffic to sites of popular financial corporations that publish their user numbers.