Part of Bitcoin’s appeal is the idea that nobody controls it, but a recent study found that 0.1 percent of the network’s top contributors—just 50 miners—controls 50 percent of Bitcoin’s mining capacity.
Bloomberg reported that the NBER study, which is titled “Blockchain Analysis of the Bitcoin Market,” found that the “top 10,000 individual investors in Bitcoin control about one-third of the cryptocurrency in circulation.” The study’s authors said that 14 million BTC were in circulation at the end of 2020.
That systemic risk includes the possibility of a so-called 51 percent attack through which a group of Bitcoin miners could take control over the network.
The findings also indicate that Bitcoin critics who say the cryptocurrency is essentially a vehicle for making a relatively small number of people incredibly wealthy might be on to something.
It makes sense for a small number of operations to account for the vast majority of production now that mining Bitcoin requires dedicated hardware and massive amounts of electricity.