4 ms·

"Mafia" seems a strange and prejudicial word to use here. "Less than 2% of the anonymous ownership accounts that can be tracked on Bitcoin’s blockchain control

"Mafia" seems a strange and prejudicial word to use here. "Less than 2% of the anonymous ownership accounts that can be tracked on Bitcoin’s blockchain control 95% of the digital asset" - at first I thought this was really astonishing. Now, I'm not so sure. My first interpretation was that 2% of bitcoiners have 95% of the bitcoin - but now I wonder how many addresses a typical person has. e.g. If I create an address every time someone buys illegal drugs from me over the 5 years I sell them on the darknet, and later coalesce all my earnings into some address, does that mean that my X empty addresses are counted in the 98% of have-nots and my one coalesced address in the 2% of haves? Depending on how many addresses people typically use, and given the multi-year history of bitcoin, it actually seems somewhere between not surprising and incomprehensible to me. Like, I guess that's a percentage it could be, but I don't know how to interpret it. I think a better news article would provide context on stats like this so the reader could understand rather than just leaving the reader to figure out the meaning for themselves.

_Microft 6y ago
They might be alluding to the "Paypal Mafia". https://en.wikipedia.org/wiki/PayPal_Mafia https://en.wikipedia.org/wiki/PayPal_Mafia
Izkata 6y ago
> My first interpretation was that 2% of bitcoiners have 95% of the bitcoin Consider how much was probably lost in the early days, from dead hard drives and such. For one specific example, bitcoin creator Satoshi Nakamoto appears to have ~1 million bitcoin sitting untouched [0] - that alone seems to be ~5% of all existing bitcoin [1] owned by one person, with an estimated 11-16% more just "lost" [also 1]. [0] https://decrypt.co/34810/how-many-bitcoin-does-its-inventor-satoshi-nakamoto-still-own https://decrypt.co/34810/how-many-bitcoin-does-its-inventor-... [1] https://www.buybitcoinworldwide.com/how-many-bitcoins-are-there/ https://www.buybitcoinworldwide.com/how-many-bitcoins-are-th...
- agumonkey 6y ago
  A recent example of lost recovery https://old.reddit.com/r/Bitcoin/comments/lto0rt/found_an_old_usb_key/ https://old.reddit.com/r/Bitcoin/comments/lto0rt/found_an_ol...
leto_ii 6y ago
I'm not sure about this, but does every person using an exchange get their own address? My impression was that they don't and that a lot of transactions are actually settled within the exchange using good ol' relational databases and not the blockchain. If that's the case, then all of these people will get lumped into just a few exchange controlled adresses, which will give an exaggerated impression of concentration.
- KirillPanov 6y ago
  > I'm not sure about this, but does every person using an exchange get their own address? Definitely not. Exchanges that aren't stupid keep the vast majority of their funds in cold storage, which is held in a small number of addresses. Most people store their bitcoin on exchanges, even though that's a pretty bad idea. Not your keys not your coins. The article is massively misleading. It should say "95% of bitcoin is controlled by a small number of entities, most of which are exchanges". That's still not good, but at least it's not deceptive.
  - leto_ii 6y ago
    > The article is massively misleading. It should say "95% of bitcoin is controlled by a small number of entities, most of which are exchanges". Yeah, that's exactly what I felt as well. Thanks for clarifying.
  - aasasd 6y ago
    > Exchanges that aren't stupid keep the vast majority of their funds in cold storage That sounds dumb on their part, as that money isn't doing work that it could. Perhaps they should invest it in the meanwhile. But since it's users' money, maybe set up a provision that only a part of the funds is invested, and the rest stay put, to give them back to the users on demand. Most people don't regularly take out all their coins at once, so the exchange won't need to have them all on hand, most of the time.
dukodk 6y ago
I think it’s mostly from using temporary accounts to hide transactions. When you can “open” an account digitally without limits, this seems like the inevitable. They should look at actively traded accounts. Fast search shows ~1M active out of 460M total.
cnKLP 6y ago
It is a common colloquial use of the word in many languages. Cambridge dictionary: "a close group of people who are involved in similar activities and who help and protect each other, sometimes to the disadvantage of others"
xirbeosbwo1234 6y ago
I supposedly own about 900 Bitcoins. I was given them for free all the way back in 2010 and promptly deleted the "wallet" once I realized the technology was unworkable. A naive analysis would completely miss that.

_Microft 6y ago

They might be alluding to the "Paypal Mafia". https://en.wikipedia.org/wiki/PayPal_Mafia https://en.wikipedia.org/wiki/PayPal_Mafia

Izkata 6y ago

> My first interpretation was that 2% of bitcoiners have 95% of the bitcoin Consider how much was probably lost in the early days, from dead hard drives and such. For one specific example, bitcoin creator Satoshi Nakamoto appears to have ~1 million bitcoin sitting untouched [0] - that alone seems to be ~5% of all existing bitcoin [1] owned by one person, with an estimated 11-16% more just "lost" [also 1]. [0] https://decrypt.co/34810/how-many-bitcoin-does-its-inventor-satoshi-nakamoto-still-own https://decrypt.co/34810/how-many-bitcoin-does-its-inventor-... [1] https://www.buybitcoinworldwide.com/how-many-bitcoins-are-there/ https://www.buybitcoinworldwide.com/how-many-bitcoins-are-th...

agumonkey 6y ago
A recent example of lost recovery https://old.reddit.com/r/Bitcoin/comments/lto0rt/found_an_old_usb_key/ https://old.reddit.com/r/Bitcoin/comments/lto0rt/found_an_ol...

leto_ii 6y ago

I'm not sure about this, but does every person using an exchange get their own address? My impression was that they don't and that a lot of transactions are actually settled within the exchange using good ol' relational databases and not the blockchain. If that's the case, then all of these people will get lumped into just a few exchange controlled adresses, which will give an exaggerated impression of concentration.

KirillPanov 6y ago
> I'm not sure about this, but does every person using an exchange get their own address? Definitely not. Exchanges that aren't stupid keep the vast majority of their funds in cold storage, which is held in a small number of addresses. Most people store their bitcoin on exchanges, even though that's a pretty bad idea. Not your keys not your coins. The article is massively misleading. It should say "95% of bitcoin is controlled by a small number of entities, most of which are exchanges". That's still not good, but at least it's not deceptive.
- leto_ii 6y ago
  > The article is massively misleading. It should say "95% of bitcoin is controlled by a small number of entities, most of which are exchanges". Yeah, that's exactly what I felt as well. Thanks for clarifying.
- aasasd 6y ago
  > Exchanges that aren't stupid keep the vast majority of their funds in cold storage That sounds dumb on their part, as that money isn't doing work that it could. Perhaps they should invest it in the meanwhile. But since it's users' money, maybe set up a provision that only a part of the funds is invested, and the rest stay put, to give them back to the users on demand. Most people don't regularly take out all their coins at once, so the exchange won't need to have them all on hand, most of the time.

dukodk 6y ago

I think it’s mostly from using temporary accounts to hide transactions. When you can “open” an account digitally without limits, this seems like the inevitable. They should look at actively traded accounts. Fast search shows ~1M active out of 460M total.

cnKLP 6y ago

It is a common colloquial use of the word in many languages. Cambridge dictionary: "a close group of people who are involved in similar activities and who help and protect each other, sometimes to the disadvantage of others"

xirbeosbwo1234 6y ago

I supposedly own about 900 Bitcoins. I was given them for free all the way back in 2010 and promptly deleted the "wallet" once I realized the technology was unworkable. A naive analysis would completely miss that.