Rich-Get-Richer Effect Observed in Digital Currency Network

(MIT Technology Review) In total, the Bitcoin marketplace has hosted over 17 million transactions, and the value of all the bitcoins in circulation is over $1 billion.

One interesting aspect of this marketplace is that the complete list of all transactions is publicly available. And this gave Daniel Kondor and buddies at Eotvos Lorand University in Hungary an idea.

These guys have downloaded this complete list of transactions and reconstructed the entire financial history of each account in the market. Using this data, they have recreated the flow of digital cash through the network and studied the resulting patterns of wealth creation and accumulation. “We believe that this is the first opportunity to investigate the movement of currency in such detail,” they say.