Economic vs Network Centralization, which is worse?

in blockchain •  2 months ago 

Which kind of centralization is worse?

If you have two networks.

One network is physically centralized but the economics are extremely decentralized. Think of a sort of faux private blockchain with KYC but which is paying every participant income within a fixed range (minimum income floor and maximum income cap). Let's say this private centralized faux blockchain is set up to prevent greed, prevent too much ROI, so that economic equality can be programmed by the game theory?

The second network is physically decentralized to the extreme so that it cannot ever be shut down, but at the same time economically centralized. A very small group of people, say a few hundred people, are able to get billions of dollars in income, while everyone else gets thousands of dollars (horrible Gini coefficient), and that this is deliberately programmed into the game theory so that those in that very small exclusive group can compound and keep getting greater returns faster.

Which among these two seems worse to you?

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I think that you first need to define "worse". A network that is physically centralized has an inherent risk of failure (from external attacks and/or the central nodes turning malicious). The second type of network has little incentive for new members to join it. Both are "bad".

But if you have to choose between the two which is worse?