Adedeji Owonibi, mentioned that lack of regulation in Nigeria’s crypto space permits various practices to go unmonitored.
While Bitcoin might be decentralized in terms of ownership and control of assets, over one-quarter of all Bitcoin in circulation is held by a tiny fraction of the market.
According to a recent study conducted by the National Bureau of Economic Research, 10,000 Bitcoin holders (making up only 0.01% of the entire Bitcoin ecosystem) hold 5 million Bitcoin in circulation. This represents 27% of the total Bitcoin possible. At the time of writing, this is a whopping $232 billion USD. As reported by the Wall Street Journal, an estimated 114 million people own cryptocurrency. This comes according to crypto.com data and records of blockchain addresses.
The top 1% in crypto vs top 1% in economic wealth
Looking at the US economy by Federal Reserve data, by comparison, the top 1% of the wealthiest individuals hold approximately 33% of all wealth.
“Despite having been around for 14 years and the hype it has ratcheted up, it’s still the case that it’s a very concentrated ecosystem.”
How is Bitcoin being used?
The research dove into how Bitcoin transactions are being treated. According to the results, there are two different activities that make up 90% of Bitcoin transactions. One is Bitcoin activity that occurs when a transaction takes place and the network processes the activity. The second is when Bitcoin is sent between wallet addresses owned by the same user. This could be to shroud identity and maintain anonymity. The 10% of Bitcoin transaction volume is mainly trading, according to the researchers. This is between traders and investors (at a peer-to-peer level) but mainly through exchanges and trading desks – of which 75% of the total trading is made up of. Further data points out that less than 3% of Bitcoin transactions is illicit, either being used to gambling, scamming or other uses on the dark web.
The research might no be able to recognise users and indiciauls associated with accounts, but it is possible to look at the information of transactions given that Bitcoin’s ledger and network is entirely public – as is part of its design. This allows researchers to look into how Bitcoin is being used and how trading activity makes up the market.