Less than a thousand own half of Bitcoins - report

By Rizza Sta. Ana

Dec 11, 2013 09:28 AM EST

According to a report by Business Insider, half of all existing Bitcoins are owned under a thousand people as of December 3. Assumed that using the average trading price of $1,000 per Bitcoin, and that there are 12 million Bitcoins that exist to date, A little over a quarter of the number of Bitcoins in circulation are owned by 47 individuals. Around 20% of the virtual currency is owned by one million individuals. Business Insider's figures came from information provided by Finnish entrepreneur and active Bitcointalk.org member Risto Pietilä, of which was based from information trawled through Bitcoin master ledge Blockchain by Bitcoinrichlist.com. The news agency also run the figures to one of the virtual currency's earliest developers, Martti Malmi, who said the calculations were basically sound.

The news agency noted the fact that this was not a new issue. Several articles, including one by Izabella Kaminska of the Financial Times had written extensively about the virtual currency price cartel and its implications in the market - meaning the elite gets to dictate the prices.

Moreover, the calculations also indicate that the 47 individuals who owned a quarter of all of the Bitcoins in circulation each own a minimum of $10 million in Bitcoin value. The report also said the mean net worth could be much higher than what was calculated. Each of the 880 individuals who own around 21.5% of Bitcoins have at least $1 million in Bitcoin value, the report said. The million individuals who own Bitcoins each have $10,000 worth of Bitcoins or less.

Although Bitcoin transactions are done anonymously, several individuals, including the Winklevoss twins and Bitcoin angel investor Roger Ver admitted that they have holdings on the virtual currency.

Kaminska argued about the rise in Bitcoin, and how its nothing like currency. She wrote, "Bitcoin, however, is backed by nothing but speculative interest. Anyone acquiring Bitcoin in exchange for national currency is in reality giving up a claim to the productive capacity of that country in exchange for a non-enforceable claim over the productive capacity of a crowd that sits on financial assets rather than productive assets, and has no way to enforce those with productive assets to exchange against it. As a store of value, it is consequently terribly flawed - since it lacks any mutual interest other than that based on attracting new money into the system, much like any other Ponzi scheme. As a payments system, it has more potential, but only if its extreme volatility is overcome.

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