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Most bitcoin investors never move their coins off the exchange and thus don't have a distinct address on the blockchain, so your sampling technique is probably

Most bitcoin investors never move their coins off the exchange and thus don't have a distinct address on the blockchain, so your sampling technique is probably just as flawed as time of app download, if not more so.

capableweb 4y ago
> Most bitcoin investors never move their coins off the exchange Apart from having insider knowledge in how cryptocurrency exchanges operate and their data, how could you possibly know this? One address on the blockchain can belong to one or more users, just like one user can have one or more addresses on the blockchain, so being able to compare feels impossible even if you had insider knowledge/data.
- rippercushions 4y ago
  Because when you buy or sell crypto on a centralized exchange, no actual blockchain transactions take place, it's just shuffling bits in the exchange's local database.
  - capableweb 4y ago
    Wait, what? So because trading cryptocurrency on a centralized exchange doesn't involve a blockchain, the conclusion is "Most bitcoin investors never move their coins off the exchange"? I'm missing some vital step in your reasoning here.
    - Karunamon 4y ago
      Yes that's pretty much the extent of the reasoning and I don't see what's wrong with that. Bitcoin on a centralized exchange cannot be traded for goods and services until explicitly withdrawn, unlike most brokerage accounts where cash is cash and many will even give you a debit card so you can spend directly from the account. This strongly decouples bitcoin and most other cryptos from the total money supply. When you're on Binance and you send them one BTC as a block chain transaction, you are receiving one Binance!BTC that does not exist outside of that walled garden.
      - v8xi 4y ago
        In that case you "own" a paper bitcoin, which is much the same as not owning one at all. In this case, the "bitcoin" you own doesn't even exist (outside of the exchanges database) so you cannot use this to speculate on actual bitcoin in actual wallets. Just look at FTX - some 1.8B in BTC liabilities but zero BTC assets
        three_seagrass 4y ago
        Just because you don't have a bearer bond doesn't mean you haven't invested in bonds. Modern finance isn't about holding an invested asset in your hands. This splitting hairs over "true" ownership ignores the fact that the original investor analysis done by GP here premised on chain transactions is still semantically wrong.
    - yieldcrv 4y ago
      many exchanges boast user stats and funding stats which don't match a corresponding increase in addresses, we can also corroborate this with the size of the exchange's known hot and cold wallets, and further corroborate this with periods of time later when many users do move funds to distinct addresses outside of exchanges, the difference with what remains on exchange we can (or have to) assume to be distinct users. finally, there have been periods of time when its not worth it to move funds off of exchange because the transaction fees would eat the small amounts that poorer/less capitalized users bought and hold. that still leaves us with "most". everyone knows the theoretical issues and incompleteness of this statistics collection - since there is no single public or verifiable stat to use - its pretty new to be a person that chooses assume its more likely that people are having distinct addresses on chain, than assume its more likely they're on an exchange kind of funny how we go full circle here, but okay. hope that helps your reasoning. this article has no way of making its claims either, so there's really no point of appealing to either authority or bolster any opinion.
- mindslight 4y ago
  What if as part of bankruptcy proceedings, especially for a that business goes under due to fraud (effectively a failure of transparency/oversight), the business's datasets were opened up to regulators or the public domain rather than treating them as business assets to be sold for cheap to the next exploiter. Then one could actually run these kinds of reports on real data, that would otherwise be kept proprietary. The issue of one's "private" data then becoming part of a public dataset could be alleviated with deidentification, plus a better acceptance that when companies accumulate data about you, it's generally going to get exploited in some way or another.
  - capableweb 4y ago
    > Then one could actually run these kinds of reports on real data, that would otherwise be kept proprietary. Every cryptocurrency exchange would have to go bankrupt before you could make sweeping statements like that if so.
  - lupire 4y ago
    > deidentification Is consistently proven to be a myth.
- giaour 4y ago
  It doesn't matter if the "most" statement is correct. Some investors never move their coins off the exchange; therefore, the inference that 49.4% of investors have made money because you can see that in recorded transactions is based on a faulty premise. Unless you're arguing that only a negligible number of exchange users do this, which seems implausible and would also assume facts not in evidence.
jpmattia 4y ago
> Most bitcoin investors never move their coins off the exchange I'm curious: What is your source for this statistic? For comparison: There were about 40M non-zero addresses earlier this year. See eg https://news.bitcoin.com/number-of-addresses-holding-btc-taps-40-million-non-zero-bitcoin-address-metric-grew-92-since-2018/ https://news.bitcoin.com/number-of-addresses-holding-btc-tap... [The current number is on Glassnode: https://studio.glassnode.com/metrics?%3Bm=blockchain.UtxoLossCount&%3Bs=1509303349&%3Bu=1576540800&%3Bzoom=&a=BTC&category=Addresses&m=addresses.NonZeroCount https://studio.glassnode.com/metrics?%3Bm=blockchain.UtxoLos...] FTX is one of the larger exchanges, and FTX bankruptcy headlines say they "may have 1 million creditors". See eg reuters.com/technology/ftx-officials-contact-with-us-regulators-filing-2022-11-15/ Edit: I'm trying to figure out if someone has actual stats or whether the statement is just intuitively guessing. There are so many bitcoin stats out there, it's hard to keep track of it all.
- iamthirsty 4y ago
  > There were about 40M non-zero addresses earlier this year. An exchange, when depositing or withdrawing to a user or another exchange, uses a ton of address, sometimes leaving behind very small amounts. Same with users. I'm sure 75% of non-zero address have very, very little BTC in them.
  - yownie 4y ago
    Exchanges batch transactions specifically to avoid tons of transactions using ton's of addresses is perfectly fine however the address space is very very large.
- three_seagrass 4y ago
  >> Most bitcoin investors never move their coins off the exchange >I'm curious: What is your source for this statistic? They have no reason to. Unless the investor is specifically working on some HFT arbitrage scheme between exchanges, then they don't even need to move crypto out of the exchange. Also given the complexity of rolling your own wallet, it's just a risk that's not worth it when KYC exchanges are relatively stable.
QuadmasterXLII 4y ago
If you haven't moved coins off the exchange you aren't a bitcoin investor.
- three_seagrass 4y ago
  This reads like a no-true-scotsman. If you exchange USD for bitcoin assets with the intent to sell later at a higher price, you're semantically a bitcoin investor.
  - QuadmasterXLII 4y ago
    If the website ftx said you had thee bitcoins three weeks ago, how many bitcoins did you have?
    - three_seagrass 4y ago
      Choosing (poorly) to invest with the wrong tools is still investing.
  - QuadmasterXLII 4y ago
    I agree that my post reads like the no-true-scottsman fallacy, but I think I may be onto something. Compare the very similar phrases "You aren't a real stock investor unless you get your shares in physical paper" and "You aren't a real real estate investor if you buy the brooklyn bridge from a guy on a streetcorner in Harlem." The overwhelmingly common experience of "stock investors" that actually don't own the paper stock is that they are able to sell at market value when they decide to (although its not perfect, see trading halts etc.) I'd argue that the paper stock claim is a real no-true-scottsman. The overwhelmingly common experience of brooklyn bridge buyers is that they are not able to later sell the brooklyn bridge at market value- they did not succesfully invest in real estate. Buying "bitcoin" and trusting the exchange to hold it for you? Hard to say what the odds are but they don't seem good lately
    - giaour 4y ago
      Even a real estate deed or a stock certificate is just a piece of paper, though. At the end of the day, unless your investment is something you can physically hold in your hand, you're trusting that your claim on it will be honored. "You aren't a real real estate investor if you buy the brooklyn bridge from a guy on a streetcorner in Harlem" is true because the claim on the bridge was never credible, not because you never physically took possession of the bridge itself. You could argue that the exchange's IOU was never credible, but that's different from saying that any BTC-based IOU is made of lies.
lrvick 4y ago
If you do not move your coins off an exchange to a wallet you alone control, then the coins were never yours to start with. All you owned is a kind of IOU for some coins that could vanish at any time. See MtGox, FTX.
- boopboopbadoop 4y ago
  I think this misses the point
nathias 4y ago
are they really bitcoin investors if they don't have bitcoins? they gave money to an exchange for a promise, and those promises get broken a lot ...
- drdeca 4y ago
  Their investment/"investment" is still in relation to bitcoin. It doesn't seem entirely incongruous to call it "investing in bitcoin". If I buy some shares in a company that does things with [X], I think it makes sense to say that by doing so I'm "investing in [X]", even if I don't e.g. have the necessary license needed to directly own any [X].
  - lupire 4y ago
    If I make a bet on the Cowboys winning a game, am I invested in the Cowboys, or merely dependent on them? Did my bet have any effect on the Cowboys, even indirectly, in the way that buing a share of stock does?
    - drdeca 4y ago
      I’m almost tempted to say that in that case you “are invested in them/their success”, but possibly “haven’t invested in them”?
  - nathias 4y ago
    Sure, one could and does say that, I'm just making a claim that we have to differentiate this better, not for being terminological pedants but because all the crashes of centralized exchanges will be used to regulate decentralized crypto while only allowing of centralized exchanges ...

capableweb 4y ago

> Most bitcoin investors never move their coins off the exchange Apart from having insider knowledge in how cryptocurrency exchanges operate and their data, how could you possibly know this? One address on the blockchain can belong to one or more users, just like one user can have one or more addresses on the blockchain, so being able to compare feels impossible even if you had insider knowledge/data.

rippercushions 4y ago
Because when you buy or sell crypto on a centralized exchange, no actual blockchain transactions take place, it's just shuffling bits in the exchange's local database.
- capableweb 4y ago
  Wait, what? So because trading cryptocurrency on a centralized exchange doesn't involve a blockchain, the conclusion is "Most bitcoin investors never move their coins off the exchange"? I'm missing some vital step in your reasoning here.
  - Karunamon 4y ago
    Yes that's pretty much the extent of the reasoning and I don't see what's wrong with that. Bitcoin on a centralized exchange cannot be traded for goods and services until explicitly withdrawn, unlike most brokerage accounts where cash is cash and many will even give you a debit card so you can spend directly from the account. This strongly decouples bitcoin and most other cryptos from the total money supply. When you're on Binance and you send them one BTC as a block chain transaction, you are receiving one Binance!BTC that does not exist outside of that walled garden.
    - v8xi 4y ago
      In that case you "own" a paper bitcoin, which is much the same as not owning one at all. In this case, the "bitcoin" you own doesn't even exist (outside of the exchanges database) so you cannot use this to speculate on actual bitcoin in actual wallets. Just look at FTX - some 1.8B in BTC liabilities but zero BTC assets
      - three_seagrass 4y ago
        Just because you don't have a bearer bond doesn't mean you haven't invested in bonds. Modern finance isn't about holding an invested asset in your hands. This splitting hairs over "true" ownership ignores the fact that the original investor analysis done by GP here premised on chain transactions is still semantically wrong.
  - yieldcrv 4y ago
    many exchanges boast user stats and funding stats which don't match a corresponding increase in addresses, we can also corroborate this with the size of the exchange's known hot and cold wallets, and further corroborate this with periods of time later when many users do move funds to distinct addresses outside of exchanges, the difference with what remains on exchange we can (or have to) assume to be distinct users. finally, there have been periods of time when its not worth it to move funds off of exchange because the transaction fees would eat the small amounts that poorer/less capitalized users bought and hold. that still leaves us with "most". everyone knows the theoretical issues and incompleteness of this statistics collection - since there is no single public or verifiable stat to use - its pretty new to be a person that chooses assume its more likely that people are having distinct addresses on chain, than assume its more likely they're on an exchange kind of funny how we go full circle here, but okay. hope that helps your reasoning. this article has no way of making its claims either, so there's really no point of appealing to either authority or bolster any opinion.
mindslight 4y ago
What if as part of bankruptcy proceedings, especially for a that business goes under due to fraud (effectively a failure of transparency/oversight), the business's datasets were opened up to regulators or the public domain rather than treating them as business assets to be sold for cheap to the next exploiter. Then one could actually run these kinds of reports on real data, that would otherwise be kept proprietary. The issue of one's "private" data then becoming part of a public dataset could be alleviated with deidentification, plus a better acceptance that when companies accumulate data about you, it's generally going to get exploited in some way or another.
- capableweb 4y ago
  > Then one could actually run these kinds of reports on real data, that would otherwise be kept proprietary. Every cryptocurrency exchange would have to go bankrupt before you could make sweeping statements like that if so.
- lupire 4y ago
  > deidentification Is consistently proven to be a myth.
giaour 4y ago
It doesn't matter if the "most" statement is correct. Some investors never move their coins off the exchange; therefore, the inference that 49.4% of investors have made money because you can see that in recorded transactions is based on a faulty premise. Unless you're arguing that only a negligible number of exchange users do this, which seems implausible and would also assume facts not in evidence.

jpmattia 4y ago

> Most bitcoin investors never move their coins off the exchange I'm curious: What is your source for this statistic? For comparison: There were about 40M non-zero addresses earlier this year. See eg https://news.bitcoin.com/number-of-addresses-holding-btc-taps-40-million-non-zero-bitcoin-address-metric-grew-92-since-2018/ https://news.bitcoin.com/number-of-addresses-holding-btc-tap... [The current number is on Glassnode: https://studio.glassnode.com/metrics?%3Bm=blockchain.UtxoLossCount&%3Bs=1509303349&%3Bu=1576540800&%3Bzoom=&a=BTC&category=Addresses&m=addresses.NonZeroCount https://studio.glassnode.com/metrics?%3Bm=blockchain.UtxoLos...] FTX is one of the larger exchanges, and FTX bankruptcy headlines say they "may have 1 million creditors". See eg reuters.com/technology/ftx-officials-contact-with-us-regulators-filing-2022-11-15/ Edit: I'm trying to figure out if someone has actual stats or whether the statement is just intuitively guessing. There are so many bitcoin stats out there, it's hard to keep track of it all.

iamthirsty 4y ago
> There were about 40M non-zero addresses earlier this year. An exchange, when depositing or withdrawing to a user or another exchange, uses a ton of address, sometimes leaving behind very small amounts. Same with users. I'm sure 75% of non-zero address have very, very little BTC in them.
- yownie 4y ago
  Exchanges batch transactions specifically to avoid tons of transactions using ton's of addresses is perfectly fine however the address space is very very large.
three_seagrass 4y ago
>> Most bitcoin investors never move their coins off the exchange >I'm curious: What is your source for this statistic? They have no reason to. Unless the investor is specifically working on some HFT arbitrage scheme between exchanges, then they don't even need to move crypto out of the exchange. Also given the complexity of rolling your own wallet, it's just a risk that's not worth it when KYC exchanges are relatively stable.

QuadmasterXLII 4y ago

If you haven't moved coins off the exchange you aren't a bitcoin investor.

three_seagrass 4y ago
This reads like a no-true-scotsman. If you exchange USD for bitcoin assets with the intent to sell later at a higher price, you're semantically a bitcoin investor.
- QuadmasterXLII 4y ago
  If the website ftx said you had thee bitcoins three weeks ago, how many bitcoins did you have?
  - three_seagrass 4y ago
    Choosing (poorly) to invest with the wrong tools is still investing.
- QuadmasterXLII 4y ago
  I agree that my post reads like the no-true-scottsman fallacy, but I think I may be onto something. Compare the very similar phrases "You aren't a real stock investor unless you get your shares in physical paper" and "You aren't a real real estate investor if you buy the brooklyn bridge from a guy on a streetcorner in Harlem." The overwhelmingly common experience of "stock investors" that actually don't own the paper stock is that they are able to sell at market value when they decide to (although its not perfect, see trading halts etc.) I'd argue that the paper stock claim is a real no-true-scottsman. The overwhelmingly common experience of brooklyn bridge buyers is that they are not able to later sell the brooklyn bridge at market value- they did not succesfully invest in real estate. Buying "bitcoin" and trusting the exchange to hold it for you? Hard to say what the odds are but they don't seem good lately
  - giaour 4y ago
    Even a real estate deed or a stock certificate is just a piece of paper, though. At the end of the day, unless your investment is something you can physically hold in your hand, you're trusting that your claim on it will be honored. "You aren't a real real estate investor if you buy the brooklyn bridge from a guy on a streetcorner in Harlem" is true because the claim on the bridge was never credible, not because you never physically took possession of the bridge itself. You could argue that the exchange's IOU was never credible, but that's different from saying that any BTC-based IOU is made of lies.

lrvick 4y ago

If you do not move your coins off an exchange to a wallet you alone control, then the coins were never yours to start with. All you owned is a kind of IOU for some coins that could vanish at any time. See MtGox, FTX.

boopboopbadoop 4y ago
I think this misses the point

nathias 4y ago

are they really bitcoin investors if they don't have bitcoins? they gave money to an exchange for a promise, and those promises get broken a lot ...

drdeca 4y ago
Their investment/"investment" is still in relation to bitcoin. It doesn't seem entirely incongruous to call it "investing in bitcoin". If I buy some shares in a company that does things with [X], I think it makes sense to say that by doing so I'm "investing in [X]", even if I don't e.g. have the necessary license needed to directly own any [X].
- lupire 4y ago
  If I make a bet on the Cowboys winning a game, am I invested in the Cowboys, or merely dependent on them? Did my bet have any effect on the Cowboys, even indirectly, in the way that buing a share of stock does?
  - drdeca 4y ago
    I’m almost tempted to say that in that case you “are invested in them/their success”, but possibly “haven’t invested in them”?
- nathias 4y ago
  Sure, one could and does say that, I'm just making a claim that we have to differentiate this better, not for being terminological pedants but because all the crashes of centralized exchanges will be used to regulate decentralized crypto while only allowing of centralized exchanges ...