Roughly 11,000 entities represent 55% of Bitcoin’s on-chain volume

Researchers have found that roughly 11,000 entities are responsible for more than half of Bitcoin’s on-chain volume.

According to a study published by the National Bureau of Economic Research (NBER) on Oct. 21, 11,043 on-chain entities represent 55% of volume on the Bitcoin ( $30,530.00 ) network. Cryptocurrency exchanges were estimated to account for three-quarters of on-chain volume.

The report found that the top 1,000-largest investors control roughly 3 million BTC or 15.9% of circulating Bitcoin, while the next 9,000-largest investors hold roughly 2 million BTC combined or 10.6% of circulating Bitcoin.

The report’s authors conclude that the network remains highly centralized despite the surge of new investors enticed by BTC’s 2021 bull market, stating:

“The Bitcoin ( $30,530.00 ) ecosystem is still dominated by large and concentrated players, be it large miners, Bitcoin ( $30,530.00 ) holders or exchanges.”

However, the study also noted that individual Bitcoin ( $30,530.00 ) holders currently represent 8.5 million BTC or 45.1% of supply.

NBER also identified significant concentration within the Bitcoin ( $30,530.00 ) mining sector, estimating that the largest 10% of miners control 90% of global hashrate rate. The report added that roughly 50 miners (approximately 0.1% of the network) command 50% of the Bitcoin ( $30,530.00 ) network’s total hashing power.

While NBER claims the centralization of hash rate places the Bitcoin ( $30,530.00 ) network at significant risk of a 51% attack, the report does not offer an hypothetical situation in which the world’s top miners would be incentivized to launch an attack on the network.

Read more: Number of investors owning Bitcoin ( $30,530.00 ) has tripled since 2018: Gallup Poll

According to Cambridge University’s Bitcoin ( $30,530.00 ) Electricity Consumption Index (BECI), the global distribution of hashpower has pluralized significantly since September 2019 — when China’s share peaked at 75.5%

While China’s renewed crackdown on domestic Bitcoin ( $30,530.00 ) miners has been credited with driving a recent exodus of miners seeking cheap electricity in North America, Central Asia, and Eastern Europe, BECI’s data suggests that Chinese hashing power had already fallen by 40% before the April clampdown.


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