Subnostr

It’s by number of addresses. Clearly not a perfect metric but still probably not too far off the truth.

It tends to very wrong "in both directions".

On the one hand, most btc holders that actually use bitcoin at all, will tend to have a lot of addresses.

On the other hand, many big operations (companies, exchanges, investment orgs) tend to aggregate large amounts into single addresses, representing funds that are actually "owned" (legally) by many customers or partners or investors.

I think the former factor is probably more significant here.

So say there are 1.5M addresses with 1BTC. That could easily be say 50000 individuals and a few 100s of orgs each of which owns between 10 and 200 BTC, each of them having 20-30 utxos. For example.

I don't think this is a "it all averages out" kind if situation. It just depends - on stuff we don't know.

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Discussion

Jeff 2y ago

Most bitcoiners who use bitcoin will indeed have several addresses - but I’d wager one of them will contain the bulk of their stash.

Exchanges will aggregate their coins into larger buckets but you could argue that exchange balances are decreasing (though still significant) and that many people who actually stack a lot of sats will take them off exchanges as they’re incentivised to learn more. But clearly there will be many whole coiners on exchanges that we can’t count.

Glassnode have provided the info on addresses >1 btc. I’d be really interested in number of addresses>2,3,4,5 etc as the next chart they publish is >10.

waxwing 2y ago

re "one containing a bulk of the stash".

I feel like it just depends. In my own case, that's never been true, over a decade and multiple different wallets (even just talking about the cold storage wallets). First I don't tend to move a nontrivial amount in one step, I break it up. Second, usage over time (and if you use bitcoin at all, you're going to use your cold storage wallet sometimes), breaks it up further.

So I don't have any data on it, I can imagine it's true for *some* people, I'd bet it's not the majority, but 🤷‍♂️ who knows I guess.

Even if it were the majority, say 60%, that had *most* (not all) of their BTC in one address, we'd still be nowhere near "number of addresses with >1BTC = number of users with >1BTC".

Jeff 2y ago

Hmm.. it’s dawning on me that I may have been making a fundamentally wrong assumption based on a lack of knowledge (or lack of thinking things through properly).

My assumption: if I’ve got 1 btc in my hardware wallet then that’s sitting in one address.

However, say I’ve used 2 different addresses evenly over time to send that btc to the wallet.

I guess I would have 0.5 btc in 2 different addresses?

You have a deeper grasp of this than me so perhaps you can answer?

I appreciate the thoughtful responses

waxwing 2y ago

There's a lot of flexibility in what you *can* do, but:

Wallet design, certainly every wallet you're using nowadays, strongly discourages users from re-using addresses. That means, in practice, that when you click a 'receive' button to get an address to send to, you always get a *new* address, i.e. one that hasn't been used before.

That means that in your scenario: I send 0.5 btc, twice, to my hardware wallet (and same for desktop or mobile wallets), you will almost always be sending to two different addresses. An obvious exception would be if you simply copied (or wrote down) one address, somewhere. People literally using paper wallets are tending to stick with one (this is just one, minor, reason that paper wallets are a bit frowned on).

Why does the "don't reuse addresses" concept exist? It's mainly for privacy; reusing an address makes it 100% clear that those two amounts of money are owned by the same user. There are also more subtle reasons to not reuse addresses, but that's a sidetrack.

Jeff 2y ago

Thanks. It’s funny - I practiced this (by different addresses sending from exchanges) and was aware of the privacy reason etc but never made the connection you’ve just helped me uncover. I don’t know why I assumed it ended up in one place once it hit your wallet!