The methodology is completely flawed. They correctly measure that 1% of the bitcoin addresses contain 99% of the bitcoin wealth, but this doesn't show wealth distribution in the "bitcoin community". Addresses don't translate to people.
Almost every wallet uses a number of addresses for accounting and anonymization. Even if I own a lot of bitcoins, if I regularly use my wallet I will most likely end up with a few addresses with a decent amount of bitcoin each and a bunch of addresses with small amounts of bitcoin each, leading to a distribution similar to the one observed.
As another factor, a lot of bitcoin wealth is in online wallets or other online services. Many of them consolidate all bitcoins into a handfull of addresses for practical reasons. That makes these services look super rich when in reality they just hold funds from other people.
Major issues with this piece include:
1. Doesn't adjust for wallets with zero, or near-zero bitcoin.
2. Does not account for large service providers like Coinbase who use only a few hot wallets that hold large amounts btc.
Some math from a commenter: "Top 99.24% of Bitcoin addresses control 32.718% of Bitcoins omitting the 67,723,836 bitcoin address containing balances of 0 - 0.001 btc amounting to 433.016 btc"
Almost every wallet uses a number of addresses for accounting and anonymization. Even if I own a lot of bitcoins, if I regularly use my wallet I will most likely end up with a few addresses with a decent amount of bitcoin each and a bunch of addresses with small amounts of bitcoin each, leading to a distribution similar to the one observed.
As another factor, a lot of bitcoin wealth is in online wallets or other online services. Many of them consolidate all bitcoins into a handfull of addresses for practical reasons. That makes these services look super rich when in reality they just hold funds from other people.