Wealth Inequality in Cryptocurrencies
docmarionum1.medium.com> Crypto data includes the “institutional” addresses such as exchanges. For example, the top Ethereum address is one of Binance’s, meaning that it isn’t all owned by one entity (although some might argue about that.)
So doesn't that make this analysis useless?
Yes, they might equally claim that almost all cash is owned by banks.
Taking Ethereum as an example, if I exclude the known institutional addresses (taken from etherscan's tags), the results change very little. The top 1% has about 92.5% of the ETH. Obviously many of the untagged ones could also be institutions, so in that respect, yes, it's "useless" because we can't know exactly who controls every address.
Like every other attempt I've seen to do this sort of analysis with crypto, this is comparing apples and oranges. Wallet != household or person.
This wealth concentration in cryptocurrencies is a direct result of their front loaded emission. Half of all Bitcoin was emitted in its first 4 years; about 70% of current Dogecoin was emitted in its first year; 70% of current Ethereum was emitted in its first block.
Reducing wealth concentration (to be closer to the one in fiat) requires a more even coin distribution, such as a purely linear emission of 1 per second forever.