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> the approximately 1,000 people who hold an estimated 40 percent of all bitcoin, or an average of around $350 million each. I've seen this statement over and
by justboxing 9y ago
> the approximately 1,000 people who hold an estimated 40 percent of all bitcoin, or an average of around $350 million each.
I've seen this statement over and over again for the last few months in various news outlets and blogs, but I'm having a hard time wrapping my head around this statement.
I understand these 1000 people are what are popularly known as the "Bitcoin Whales" but how did most of them come in possession of a vast majority of bitcoins?
Traditional FIAT currency, like USD for example first comes into circulation when the US Government prints it, and then slowly makes it was into the hands of individuals via contract payments, salary payments etc etc.
With Bitcoin, who was/is that central entity that distributed the original coins? And in exchange for what? How much does this anonymous 'Satoshi' individual own? Did he only write the specs and the blockchain stuff for bitcoins, or did he also create said bitcoins and then grant himself a bulk of the coins like how Charles Lee did with Litecoins?
I couldn't find an explanation for this -- i.e. how did the BitCoin Whales come to posses 40% of the Bitcoins between themselves - anywhere, no matter how much I google it. Anyone?
- deleted 9y ago[deleted]
- singlow 9y agoSome are miners. The others are early investors. All bitcoins were mined at some point, so they bought them from miners who cached out, or other investors who bought them from miners, etc. I don't think a significant number of them sold goods in exchange for their bitcoins.
- conception 9y agoThe first folks who were mining bitcoin back in the day when mining for coins was not resource intense at all.
- Torn 9y agoAll bitcoins are created from mining rewards. As the number of coins has increased (and more people started mining), the difficulty goes up and less coins are produced. These 'whale' entities either ran mining operations early enough, or (more likely) took a huge bet on the direction this was going and decided to accumulate - like the Winklevoss twins did - by buying as many as they could from miners.
- berberous 9y agoIn the beginning, you could mine tons of Bitcoins on your laptop. They were also close to worthless, so you could buy very many for very cheap. Satoshi did not pre-mine, I believe. So, if you read his announcement, and started mining right away, you'd be as rich as him.
- acover 9y agoThe mining difficulty was much lower at the beginning. Satoshi, the creator, has about 1 million bitcoins from this early mining. [0] [0] - https://en.m.wikipedia.org/wiki/Satoshi_Nakamoto https://en.m.wikipedia.org/wiki/Satoshi_Nakamoto
- jameskegel 9y agoAlso Hal Finney and others who helped in the beginning may have left sums of BTC behind (RIP). A personal anecdote, somewhat related: In the early days, I mined several blocks from the wallet itself, on an AMD Sempron or Duron, at about 800-900mhz. Even then, this took a few days and then weeks before eventually becoming impossible with the advent of mining pools and GPU mining arrays. Speaking for myself only, some of us just lost or discarded them because they had no value, and mining them was more of an act of altruism, so while it was fun seeing the numbers go up, it was easy to lose track of a wallet. I don't think electrum seed phrases were around yet at that time, either, or I had no knowledge of them if they were.
- zaroth 9y agoI think people massively underestimate the number of Bitcoin which are forever lost. I’d put it at well over 50%, and the true market cap is much less than we think it is because of this. IMO “Satoshi” coins are part of this unrecoverable set, but of course I have no data to base that on, just a hunch.
- drtillberg 9y agoA coin that vanishes unpredictably would be the worst sort of money. Ironically, under Gresham's Law, such a currency would dominate other forms of money because everyone would be in such a hurry to exchange it for goods before it disappeared.
- sillysaurus3 9y agoBTC can be divided into satoshis, which are extremely small units. If someone loses 1 BTC, the value of all the rest simply goes up.
- mtgx 9y agoPeople were spending tens of thousands of Bitcoins on stuff like pizza in the early days and there were significantly fewer Bitcoins back then. That's hundreds of millions of dollars today. So all some of them had to do is keep them around. Others just bought them later on. Winklevoss twins put $100 million in Bitcoin years ago. I imagine many rich Chinese people wanting to evade money transferring rules in China did, too. Satoshi has a million Bitcoins.
- justboxing 9y ago> Satoshi has a million Bitcoins. Wow. Didn't know that. So if he/she tried to cash out, then the identity would be out right, since he/she would be attempting to deposit the cash equivalent ( FIAT ?) into a real bank account?
- avprpl 9y agoI don't think they would cash all of it out anyways. That is, if Satoshi is just one person
- XR0CSWV3h3kZWg 9y agoGiven the amount of secrecy Satoshi has demonstrated before it'd be shocking enough to see the coins move much less move to a well known address (e.g. coinbase).
- valuearb 9y agoSatoshi is dead, or in prison. No way they could go 10 years without spending a single coin.
- adventured 9y agoYou know the famous pizza for bitcoin story? The media always tells the story this way: Joe Person traded eg 10,000 bitcoins for some pizza, in what is believed to be the first commercial transaction. You know what they always miss in the story? Joe Person did that same deal several times, which you can see by reading the forum thread that still exists. Joe Person missed out on a billion dollars in Bitcoin value in exchange for maybe a dozen pizzas. How did Joe Person get tens of thousands of bitcoins? That's how easy it was to mine back then.
- drtillberg 9y agoWait 2, 10 or 20 years and a pizza may look like a good value again. Think of it like the Hindenburg or the Wright biplane. Yes, it works and demonstrates a principle. That doesn't mean it will keep flying.
- grondilu 9y ago> what is believed to be the first commercial transaction. I'm pretty sure Alpaca socks were sold before that famous pizza.
- cryptodogemoon 9y agoHow foreboding! https://priceonomics.com/when-the-great-alpaca-bubble-burst/ https://priceonomics.com/when-the-great-alpaca-bubble-burst/ (1) The asset not the product is the thing being marketed (i.e. live alpacas, not fiber) (2) investors have unrealistic expectations (alpaca fiber would replace wool, despite the lack of infrastructure; and besides the fact that people don’t really wear that much wool) (3) information is controlled through industry sources (most of the information the researchers were able to dig up was put out by breeding associations)
- eecc 9y agoYou and parent poster make for a wise conversation. The closing sentence — telltale signs of a speculative bubble — can be read for BTC, one to one. Brilliant!
- mv4 9y agowouldn't it be more accurate to say "wallets"? I am sure many of these are owned by large groups of people.