Abstract
The paper deals with the problems of measuring uneven wealth distribution in the bitcoin ecosystem. All existing bitcoin distribution models depend on the analysis of bitcoin wallets and bitcoin addresses. They are based on the Bitcoin Rich List. This approach is insufficient due to the inscrutable relationships between people owning bitcoin, bitcoin wallets, and bitcoin addresses. In this paper, we used the methods of comparative analysis resulted in graphics as represented by Lorentz and Lamé curves and distribution of the Gini coefficients and the Kolkata index. We identified empirical cumulative functions of wealth distribution and the number of addresses with positive balance during the bubble and after its explosion. Approximations of the distribution of ‘poor’ and ‘rich’ addresses have been obtained and compared with the other results from the cited literature. The general public views the equality of network members as synonymous with the equal distribution of wealth among them. Emerging financial bubbles, especially in the US financial markets, lead to an increase in income inequality. However, after a bubble explodes, the inequality falls to the initial level.
Highlights
The paper deals with the problems of measuring uneven wealth distribution in the bitcoin ecosystem
All existing bitcoin distribution models depend on the analysis of bitcoin wallets and bitcoin addresses
We used the methods of comparative analysis resulted in graphics as represented by Lorentz and Lamé curves and distribution of the Gini coefficients and the Kolkata index
Summary
The issues of inequality of wealth distribution in the Bitcoin ecosystem attracted the attention of some researchers [1,2,3,4]. We identified empirical cumulative functions of wealth distribution and the number of addresses with positive balance during the bubble and after its explosion. Another issue is the bitcoin payment system began when bitcoins were high transaction costs for small random transactions exchanged for fiat money.
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