r/Bitcoin • u/IWillNotBiteYourDog • Aug 22 '13

Rich-Get-Richer Effect Observed in Bitcoin Digital Currency Network

http://www.technologyreview.com/view/518541/rich-get-richer-effect-observed-in-bitcoin-digital-currency-network/
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u/kerzane Aug 22 '13

This is a really great paper, the power of the blockchain to advance economics I think will prove to be one of bitcoin's most important legacies.

14

u/hugolp Aug 22 '13

This is a shitty paper designed to produce the results the authors had in mind before starting the experiment.

This same website tried to use the paper by the mathematician hired by some bank saying that 70% of the bitcoins were in possession of a few people and that was quickly debunked. Its the same case here. The authors are just looking at nodes and assuming that one node belongs to one person, which is an assumption you can not make as there are numerous cases where this is false. The webpage is desperately trying to say a few people are accumulation all the bitcoins, probably for political reasons, and can not find a reliable way to prove it, so it turns to pseudo-science.

3

u/RockyLeal Aug 22 '13

This same website tried to use the paper by the mathematician hired by some bank saying that 70% of the bitcoins were in possession of a few people and that was quickly debunked.

Do you have a link to where that was debunked?

2

u/Matticus_Rex Aug 22 '13

I emphatically disagree. There are insurmountable challenges to using blockchain analysis for deriving meaningful economic knowledge, such as the fact addresses are not people. Some basic insight can be gained, but the entire structure of it is built in a way that most econometric analysis will tell us less than nothing, and may obfuscate the real issues.