Steem and its distribution of equality
In this post we examine the state of Steem Power distribution in the Steem ecosystem. We use the Gini Coefficient in this post as the choice metric. Gini Coefficient is commonly measured to measure nation state income equality, but now we use it on a blockchain. If this is interesting to you, every month we will be taking a snapshot of the Steem blockchain and bringing an update. A few questions naturally arise such as: is Steem closer to authoritarianism or pure democracy?; is Steem becoming more or less distributed over time?
We shall see.
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Alright let's dig in.
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The Gini Coefficient
Imagine a society where wealth was shared equally among all of its citizens. If there were 100 citizens and the wealth was measured as $100. Each participant would own $1. We all know that modern societies display different levels of equality, but how can we measure this? There is a metric that measure the equality of a society called the Gini Coefficient.
The Gini Coefficient ranges between 0 and 1. Some publications show it as 0 to 100. When the Gini Coefficient is equal to zero then society is said to be perfectly even. When the Gini Coefficient is equal to one then society is maximally unequal.
We cannot discuss the Gini Coefficient without discussing the Line of Equality and the Lorenz Curve. Here's a look at the two.
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The red line in the chart above is the Line of Equality. In the example of the Equal 100 Citizens above you would chart the red line. The X-axis is the cumulative percentage of the population and the Y-axis is the cumulative percentage of wealth. This post will deal specifically with the distribution of the Steem blockchain.
The orange line represents the Lorenz Curve. This is the actual cumulative percentages of the population and wealth. With these two lines we can calculate the Gini Coefficient. The area between the Line of Equality (red) and Lorenz Curve (orange) is labeled "A". The area below the Lorenz Curve is labeled "B". With these two areas, we can now calculate the Gini Coefficient. The formula is:
Gini Coefficient
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