<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>3np</author><text>&amp;gt; The top 10% of miners control 90% and just 0.1% (about 50 miners) control close to 50% of mining capacity&lt;p&gt;This is incorrect. Replace &amp;quot;miners&amp;quot; with &amp;quot;mining pools&amp;quot; and they&amp;#x27;re closer to the mark. What&amp;#x27;s happened is that the block construction (done by the pool operator) and the PoW (done by miners) are mostly decoupled. Some miners will run everything themselves, but they&amp;#x27;re not represented in those numbers. (There are some things that can change here in stratum2, the new protocol used for coordinating mining pool s, but whatever)&lt;p&gt;Sure, pool operators can abuse their power. But as the paper shows, hash power is liquid; miners do move between pools for various reasons.&lt;p&gt;While there is a bit of a systemic risk there, it&amp;#x27;s not necessarily as bad as it might seem.&lt;p&gt;IMO the biggest risk here is censorship; and we saw how responsive miners are to things like that earlier this year with the whole &amp;quot;OFAC-compliant&amp;quot; debacle.</text><parent_chain><item><author>YossarianFrPrez</author><text>Interesting quotes from the first section of the paper:&lt;p&gt;&amp;quot;We first document that 90% of transaction volume on the Bitcoin blockchain is not tied to economically meaningful activities but is the byproduct of the Bitcoin protocol design as well as the preference of many participants for anonymity.&amp;quot;&lt;p&gt;&amp;quot;We show that the Bitcoin mining capacity is highly concentrated and has been
for the last five years. The top 10% of miners control 90% and just 0.1% (about 50
miners) control close to 50% of mining capacity. Furthermore, this concentration of
mining capacity is counter cyclical and varies with the Bitcoin price.&amp;quot;&lt;p&gt;&amp;quot;We show that the balances held at intermediaries have been steadily increasing
since 2014. By the end of 2020 it is equal to 5.5 million bitcoins, roughly one-third of
Bitcoin in circulation. In contrast, individual investors collectively control 8.5 million
bitcoins by the end of 2020. The individual holdings are still highly concentrated:
the top 1000 investors control about 3 million BTC and the top 10,000 investors own
around 5 million bitcoins.&amp;quot;&lt;p&gt;I haven&amp;#x27;t read the methods yet, but the idea that the authors were able to do this analysis is fascinating.</text></item><item><author>jonas21</author><text>The Techspot article is a summary of this Bloomberg piece:&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.bloomberg.com&amp;#x2F;news&amp;#x2F;articles&amp;#x2F;2021-10-25&amp;#x2F;bitcoin-still-concentrated-in-few-hands-study-finds&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.bloomberg.com&amp;#x2F;news&amp;#x2F;articles&amp;#x2F;2021-10-25&amp;#x2F;bitcoin-s...&lt;/a&gt;&lt;p&gt;which is itself reporting on this paper from the NBER:&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.nber.org&amp;#x2F;system&amp;#x2F;files&amp;#x2F;working_papers&amp;#x2F;w29396&amp;#x2F;w29396.pdf&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.nber.org&amp;#x2F;system&amp;#x2F;files&amp;#x2F;working_papers&amp;#x2F;w29396&amp;#x2F;w293...&lt;/a&gt;</text></item></parent_chain></comment><story><title>Bitcoin is largely controlled by a small group of investors and miners</title><url>https://www.techspot.com/news/91937-bitcoin-largely-controlled-small-group-investors-miners-study.html</url></story>
<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>paisawalla</author><text>As someone who&amp;#x27;s read the paper, do you know how they account for ownership by exchanges? There&amp;#x27;s got to be a large amount of BTC that is held in Coinbase&amp;#x27;s wallets, but actually owned by many more individuals.&lt;p&gt;I.e. isn&amp;#x27;t the BTC I have parked at Coinbase is in the same wallet as many of their other customers&amp;#x27; BTC, and shows up on the blockchain as one owner by this analysis?</text><parent_chain><item><author>YossarianFrPrez</author><text>Interesting quotes from the first section of the paper:&lt;p&gt;&amp;quot;We first document that 90% of transaction volume on the Bitcoin blockchain is not tied to economically meaningful activities but is the byproduct of the Bitcoin protocol design as well as the preference of many participants for anonymity.&amp;quot;&lt;p&gt;&amp;quot;We show that the Bitcoin mining capacity is highly concentrated and has been
for the last five years. The top 10% of miners control 90% and just 0.1% (about 50
miners) control close to 50% of mining capacity. Furthermore, this concentration of
mining capacity is counter cyclical and varies with the Bitcoin price.&amp;quot;&lt;p&gt;&amp;quot;We show that the balances held at intermediaries have been steadily increasing
since 2014. By the end of 2020 it is equal to 5.5 million bitcoins, roughly one-third of
Bitcoin in circulation. In contrast, individual investors collectively control 8.5 million
bitcoins by the end of 2020. The individual holdings are still highly concentrated:
the top 1000 investors control about 3 million BTC and the top 10,000 investors own
around 5 million bitcoins.&amp;quot;&lt;p&gt;I haven&amp;#x27;t read the methods yet, but the idea that the authors were able to do this analysis is fascinating.</text></item><item><author>jonas21</author><text>The Techspot article is a summary of this Bloomberg piece:&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.bloomberg.com&amp;#x2F;news&amp;#x2F;articles&amp;#x2F;2021-10-25&amp;#x2F;bitcoin-still-concentrated-in-few-hands-study-finds&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.bloomberg.com&amp;#x2F;news&amp;#x2F;articles&amp;#x2F;2021-10-25&amp;#x2F;bitcoin-s...&lt;/a&gt;&lt;p&gt;which is itself reporting on this paper from the NBER:&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.nber.org&amp;#x2F;system&amp;#x2F;files&amp;#x2F;working_papers&amp;#x2F;w29396&amp;#x2F;w29396.pdf&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.nber.org&amp;#x2F;system&amp;#x2F;files&amp;#x2F;working_papers&amp;#x2F;w29396&amp;#x2F;w293...&lt;/a&gt;</text></item></parent_chain></comment><story><title>Bitcoin is largely controlled by a small group of investors and miners</title><url>https://www.techspot.com/news/91937-bitcoin-largely-controlled-small-group-investors-miners-study.html</url></story>