The Biodiversity of Layer 1 #Bitcoin

1/ A "whale" refers to someone with a lot of money and financial capital. In Bitcoin terms, this usually refers to someone with >1000 BTC. Over time, this analogy has expanded to classify different levels of Bitcoin ownership, associating the quantity of Bitcoin held with various sea creatures:

Shrimp: < 1 BTC

Crab: 1-10 BTC

Octopus: 10-50 BTC

Fish: 50-100 BTC

Dolphin: 100-500 BTC

Shark: 500 to 1000 BTC

Whale: 1000-5000 BTC

Humpback: >5000 BTC

This characterization is fascinating. Just as animals of similar sizes share biological traits, like metabolic rate and lifespan, economic actors who own similar amounts of Bitcoin might exhibit characteristic socio-economic behaviors. This analogy can help model the dynamics within the Bitcoin network.

In this post, I analyze the distribution of addresses on Layer 1 with respect to the quantity of Bitcoin held. Using logarithmic binning, similar to the method used on certain analytical websites, I categorized addresses into groups based on the Bitcoin they hold. I then plotted the number of addresses on a logarithmic scale.

The resulting chart shows a clear trend: the number of addresses first increases with the amount of Bitcoin, peaks around 0.0001-0.001 BTC, and then decreases. A quadratic curve fitted to this data provided a remarkably clean fit (Rsq=99.9%!).

What do you think this distribution tells us about the current state of Bitcoin adoption? Let's dive into the data and discuss! 💬👇

#Bitcoin #CryptoAnalysis #DigitalEcosystem #FinancialRevolution $BTC