Data: More than 18 million addresses hold less than $100 worth of Bitcoin

Although Bitcoin “whales” are important members of the digital cryptocurrency forum, there are still a considerable number of users who hold relatively small amounts of BTC.

According to BitInfoCharts, there are currently 18,124,238 wallets holding more than $1 worth of Bitcoin (not more than $100). However, due to current transaction fees, these users may be hesitant to use Bitcoin for payments.

Bitcoin Wealth Distribution

It is said that there are about 542,000 Bitcoin addresses holding more than $10,000 (at today’s exchange rate), compared to “small” Bitcoin holders (holding value: $1-100). On the contrary, about 6.1 million Bitcoin addresses hold less than $1,000 in BTC.

While such a distribution of Bitcoin wealth could be a positive sign that Bitcoin isn’t just for the wealthy, high transaction fees could also be a hindrance for small shareholders.

Earlier this year, Bitcoin transaction fees were very low, which meant that the asset had a better chance of becoming an effective everyday payment tool. However, at the time of writing this article on June 5, the cost of processing a transaction after the next Bitcoin block (approximately 10 minutes) was $2.54.

Faced with relatively high transaction fees, small wallet holders may be less likely to trade

Transaction fees can incentivize miners to play a role in Bitcoin governance. Transaction fees are often determined by many factors, such as the congestion level of the Bitcoin blockchain when the transaction occurs.

The cost of sending a Bitcoin transaction does not depend on the amount being sent, which means that the transaction fee for large and small transactions is ultimately the same. Historically, this has been a good way for Bitcoin and other cryptocurrencies to send large transactions, as Bitcoin transactions tend to be much cheaper than other modern payment methods. However, Bitcoin's fixed transaction fee can make sending small transactions too expensive to implement on a regular basis.

It may be encouraging to see so many small Bitcoin holders, but high transaction fees may mean that many people are unlikely to spend BTC at this point in time. The large number of small Bitcoin holders urgently needs scaling solutions to reduce the asset's intermittently high transaction fees.

By Jack Filiba

Source: LongHash