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> Several issues with using this metric

Which metric are you referring to?

The authors of the paper on which the statement is based are fully aware and address most of issues you enumerate.

See my other comment.

https://news.ycombinator.com/item?id=31460346




They are referring to the metric they imagined was in use based upon reading the title.


Thanks for the link. The paper mostly only addresses one issue I that mentioned: attempting to distinguish intermediaries from individuals. It does not make any conclusions about how adoption of crypto as a whole will result in 100x more unequal wealth distribution than the regular economy which is what the OP tweets seem to be implying based on this 0.01% statistic.

The paper does point to the fact that holdings are skewed; 400,000 individuals control almost half of the circulating supply, so—like with the stock market—a very small handful of players stand to benefit if the price continues to appreciate significantly. This is particularly a problem for crypto currencies like Bitcoin that have a fixed supply capacity and are primarily used as a store of value. (Disclaimer: I own no BTC and feel it has inherent problems.)

Another study comparing Bitcoin, Ethereum and other coins to real world Gini coefficients finds similar results: that a small number of addresses hold a significant sum of tokens, but that overall wealth distribution in crypto currencies is often in-line with that of real economies.[1] The idea that crypto holdings mirror the wealth inequality of real economies is hardly surprising considering this is where the investors are coming from.

Two more interesting points raised by [1] worth noting:

> Results from both Bitcoin-like and Ethereum-like cryptocurrencies suggest that the wealth distribution is initially poor likely due to only a select few participants controlling the majority of the wealth. But this concentration often dissipates as more participants join the system, as observed in Bitcoin and Ethereum.

> Bitcoin-like coins often have capped supply, i.e., the number of these coins are algorithmically limited to a predefined quantity to provide intrinsic value to the asset. Ethereum, on the other hand, does not impose a strict limit on the supply of Ethers. ... Thus the figures reported in this subsection will likely change significantly over time, unlike Bitcoin-like currencies in which a large proportion of wealth is already distributed.

[1] https://ulir.ul.ie/bitstream/handle/10344/11073/Sai_2021_Cha...




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