A criticism of Bitcoin that you often hear is that it is a currency for the rich. Texts like: “How can Bitcoin solve inequality when a small group of people own almost all 21 million coins?” That in itself is a logical criticism for outsiders who don’t understand Bitcoin, but fortunately for us the reality is different.
More and more small investors
The blockchain makes it possible to study in detail whether Bitcoin is indeed a currency for the rich. On it we can see exactly how much Bitcoin is in the hands of the whales and the smaller investors. What the data shows is that in the past Bitcoin was indeed a currency that was owned by a small group of people.
From 2014, however, we see that more and more small investors – people with 0.1 to 10 Bitcoin – are getting their hands on a larger share of the supply. In fact, Plankton (less than 0.1 Bitcoin), Shrimp (0.1 to 1 Bitcoin) and Crabs (1 to 10 Bitcoin) own almost 20 percent of all Bitcoin.
As you can see, this is an upward trend that shows that an increasing share of all Bitcoin ends up with smaller investors. Based on this, you can already conclude that Bitcoin is a currency that is certainly not only for the rich. But that’s not the only argument in favor of Bitcoin.
Understanding Bitcoin
The reason Bitcoin is the perfect currency for the average investor is because of its capped supply of 21 million units. It is especially important to note the difference with fiat money. If you own 1 Bitcoin, it will always be 1/21 millionth of all coins in circulation. We cannot say the same for euros and dollars, of which billions more are circulating on a daily basis.
If you save in the fiat system, your share of the pie decreases with every euro or dollar that you add. In the case of Bitcoin, your slice of the pie always stays the same. In this sense, Bitcoin gives people stability and a more reliable means of savings.
Once you see that, it’s hard to deny that Bitcoin is theoretically a better savings tool than the euro. It is true that Bitcoin can be volatile, but in the long run it has always gained value in both Euros and Dollars so far. Predicting the future is difficult, but in the current financial system it seems unlikely that this trend will ever reverse.