Bitcoin's rise has sparked debates on who benefits most from its perpetual price increases and the associated costs.
The Concentration of Wealth in Bitcoin
A key issue with Bitcoin is its concentrated ownership. Data reveals that a small fraction of addresses control the majority of circulating Bitcoin. Large players like MicroStrategy exacerbate this concentration by acquiring vast amounts of the asset.
Challenges of Perpetual Price Increases
Bitcoin's constant price increases create barriers to market entry for low-income individuals. Its speculative nature heightens financial risk for investors with limited resources, worsening their financial state during market downfalls.
The Role of HODL Culture in Wealth Inequality
The 'HODL' culture, which involves holding Bitcoin in anticipation of price rises, reduces its circulating supply. This restricts new participants from entering the market, complicating Bitcoin's usage in everyday transactions and undermining its democratizing potential.
For Bitcoin to meet its original goals, it must become an asset accessible to all, not just the affluent. This requires technological innovations and a shift in cultural attitudes towards its usage.
