new research detailed in The Wall Street Journal suggests its inequality problems are worse than the United States’ disgraceful performance under the dollar. An incredible feat considering income inequality in 2020 America was the highest of all G7 nations according to data from Organization for Economic Cooperation and Development viewed by Pew Research.
That illustration, of a vanishingly small bitcoin financial elite, was revealed in a new National Bureau of Economic Research study written by professors from the MIT Sloan School of Management and London School of Economics. It found that of the 19 million bitcoin currently in circulation, just 0.01% of buyers control around 27% of the total supply. That 27% percent figure amounts to around 5 million bitcoins, which in turn comes out to about $232 billion USD. The top 1% wealthiest U.S. individuals, by comparison, control “only” about a third of all the country’s wealth, the Journal notes.
The professors conducted their research by, for the first time, mapping out and analyzing every single bitcoin transaction over its 13 years of existence.
there have been experts and academics sounding their own alarm bells around bitcoin’s potential inequality-inducing tendencies. In an interview with CNBC Cornell University, economics professor and author of The Future of Money Eswar Prasad granted cryptocurrencies may make digital payments more accessible but said that doesn’t guarantee any lessening of inequality.
“Because of existing inequalities in digital access and financial literacy, they [cryptocurrencies] could end up worsening inequality,
Despite all of this, mentions of “decentralization” and “democracy” and “independence” in relation to crypto abound as a new wave of Web3 investors and enthusiasts spend millions locking in NFTs and forming DAOs to make collective purchases.