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Litecoin has recently under scrutiny for having 35.4 million Litecoins, or about 60% of the total coin supply, moved by one entity.
New Litecoin whale emerges? Nov. 30, about 35.4 million LTC, 60% of coin supply, totaling $ 1.1. billion, reportedly moved by one entity. These shows are centralized some darlings of crypto like LTC are, not good. #LTC, #centralization
– Weiss Ratings (@WeissRatings) December 4, 2018
The move was initially pointed out by Weiss Ratings, which does not bode well for the cryptocurrency to stay decentralized when so much of the coin could be owned by one individual or group. A blog post from Litecoin.com also highlights just how big of a move it was.
With a balance of 300,000 Litecoin (~ $ 10,000,000) each, which accounts for over 12M Litecoin (~ $ 372M at time of transfer, $ 31 per coin). "
Further drawing suspicion was when "the top $ 50 LTC wallets have received 45,000.00000 more #Litecoin than they have sent". Similar moments happened on the same day, even large numbers with the exact same, very large balances. This has created additional worries for sustainability since a large chunk of Litecoin is owned by a few people.
Importance of wealth distribution and decentralization
Wallet wealth distribution is used as a good proxy for a single person. Nevertheless, before the recent moves, seen how almost half of all Litecoin's coin supply was held by the top 100 address.
Litecoin's distribution
14% of Dash's wealth being stored in the top 100 addresses around the same time.
Dash's distribution
More than 14% for top 100 addresses, and is one of the best cryptocurrencies. While Litecoin still has around 44% of coin supply in the top 100 addresses.
More money in decentralization in terms of decentralization since more coins in more hands means that there is not only power to move the coin's price or influence decision making, but also that there is a better chance for wider adoption. Then more is more money that will be spent differently on commodities and services and begin creating an economy with a money velocity of circulating coins.
Dash's favorable wealth distribution and focus on adoption reinforces each other
Since Dash has a more equitable wealth distribution, it has been able to leverage this into greater adoption across more individuals. This can be seen in Venezuela with over 2,400 merchants taking Dash or Colombia with over 300 merchants accepting Dash to make purchases. If the majority of Dash was concentrated among a few individuals, then it would be much harder to see everyday usage.
Additionally, since Dash pays out 10% of its block rewards through the treasury each month, this helps catalyze the Dash economy. Dash's focus on integrating new merchants and constantly on-boarding. The unique structure of incentives within Dash and more on distributed equity, which becomes a virtuously reinforcing circle.
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