The transparency of Bitcoin is a deciding factor when determining the price of cryptocurrency. However, despite Bitcoin addresses being open and accessible by anyone in the world, tying a transaction to a real person is quite of a challenge.
Financial markets are influenced by demand and supply factors, as well as the information about who owns certain assets and who wants to buy them. It is possible because traders and insiders constantly monitor the activity of hedge funds and pension funds and watch what they do with their holdings.
Bitcoin obviously doesn’t work this way. Despite being transparent, cryptocurrency remains anonymous.
While every Bitcoin transaction is visible and available on the ledger, the names behind these transactions remain hidden. The users are protected by the mask that is made of untraceable numbers and letters.
This, obviously, makes it nearly impossible to determine who owns Bitcoin, as well as real names of the sender and the receiver of digital currency. Most Bitcoin users consider it a positive factor and enjoy the privacy provided by cryptocurrency.
The desire to remain anonymous is quite understandable, especially among those with sizeable investments in Bitcoin. Even in virtual world, the real danger is always around the corner. The big players in Bitcoin avoid disclosing financial information in order to protect themselves from being targeted by cyber criminals.
Not being able to keep tabs on money for legal and illegal activities is very frustrating for financial regulators.
The IRS has no other choice but to rely on the trust of cryptocurrency users when it comes to declaring gains. In 2015, only 802 of the U.S. residents claimed profits or losses in relation to Bitcoin trading. It became clear that the majority of users are abusing the anonymity.
There are movements that aim to assist the regulators in tracking Bitcoin users and disclosing their identities, but they are met with a lot of resistance from Bitcoin community.
The rich list
BitcoinRichList is a website dedicated to those who hold a significant amount of cryptocurrency. According to it, top 100 of Bitcoin addresses own 17% of all digital tokens.
A year ago, the figure stood closer to 20%, which indicates increasing participation of large holders as compared to 2016. More and more investors are aiming to make profit from Bitcoin trading amid the 800% rally in prices.
Taking off the mask
While the majority of Bitcoin users are happily remaining anonymous, there is a group of proud investors who aren’t afraid to show off their wealth, as well as their faith in cryptocurrency.
One of the most famous names in the business are Tyler and Cameron Winklevoss who filed documents with the SEC for the Bitcoin exchange traded fund. The brothers once said that they own 1% of all Bitcoins. At the current level of mining it equals around 1.65 million tokens.
The mysterious founder of Bitcoin Satoshi Nakamoto is rumored to hold one million coins that are spread across different wallets.
The other big names that are loud and proud include those involved in mining, creation and exchanges of cryptocurrency.
Another couple examples are Tony Gallippi, the Chairman of Bitcoin exchange platform BitPay, who is known to have $20 million invested in Bitcoin, or Dave Carlson, a software engineer who founded a mining company MegaBigPower.