Bitcoin, too many addresses for too few BTC

Bitcoin is for everyone but not enough for everyone, given its limited supply compared to the number of addresses. This is the conclusion of one of Anthony Pompliano‘s latest tweets.

There are 38.1 million bitcoin addresses with a non-zero balance.

That means the existing addresses can’t all own 1 full bitcoin, let alone the remaining 7+ billion people globally.

— Pomp 🌪 (@APompliano) October 20, 2021

38 million Bitcoin addresses

According to the crypto influencer, there are 38 million Bitcoin addresses that have a balance greater than zero. This means that: 

“That means the existing addresses can’t all own 1 full bitcoin, let alone the remaining 7+ billion people globally”.

Basically, there are more addresses than Bitcoin available. Bitcoin is in fact based on an algorithm that only allows the creation of 21 million BTC. Due to the halving and subsequent difficulty in mining, the production of BTC slows down progressively every 4 years. The last Bitcoin will probably be mined in a hundred years, theoretically in 2140. 

Its deflationary nature makes it a scarce asset. This is what Anthony Pompliano shows: already today the 38 million addresses would have to be satisfied with only a fraction of Bitcoin. But there are another 7 billion people in the world who, should they want to own BTC, might have to surrender to the possibility that Bitcoin is a scarce resource. 

Small HODLers vs whales

The point is that the vast majority of Bitcoin holders are “small fish”. According to Bitinfocharts statistics, there are as many as 19 million addresses, or more than half of the total, that have up to 0.001 BTC in them. At the current value, they have between $0 and $61. 

Another 24% of addresses have between 0.001 BTC or 0.01 BTC (between $61 and $610).

Only 2% of active addresses have more than 1 BTC in their wallet. But that 2% is competing for the largest slice of the pie, accounting for 93% of the BTC in circulation. 

Today, anyone wishing to join this “club” would have to shell out at least $63,000 to buy at least 1 BTC. Not exactly cheap, though price growth has made Bitcoin strong.

The Bitcoin whales

Just over 2,000 addresses can boast of owning between 1,000 and 1 million Bitcoin. The richest address is actually Binance with 288,000 BTC. 

Among the richest is also the founder of BTC, Satoshi Nakamoto, whose wallets have been inactive for years and are said to contain over 1 million BTC in total. 

In any case, whales are grabbing most of the BTC in circulation. They are probably the ones who have realized its potential as a store of value, “betraying” the concept of a means of payment that was devised in the 2008 whitepaper. 

This raises a further question: is Bitcoin really that decentralized? It is self-evident that it is concentrated within a few wallets. 

Looking at these numbers, it seems that even when BTC truly reaches the masses, people will have to be content with what the whales have left behind.