Steemit Has A Gini Coefficient WORSE Than Africa!
The Gini coefficient is a statistical tool to measure income inequality within societies by comparing the real wealth distribution within that society with a theoretic equal distribution of the total wealth.
Steemit's Gini coefficient is 76 and therefore on par with Subsahara Africa and South America.
Today I was made aware of the Steemit Whales Service, where all users of Steemit are listed with their reputation, their Steem Dollars, their Steem Power and the total estimated value of their account. When I saw it I thought it is possible and might be interesting to see what Gini coefficient Steemit has.
Unfortunately, the site only displays 250 users at once which is why I only included the most valuable 1,000 accounts into the calculation. Despite that, the results are very telling.
The Gini Coefficient And My Approach Explained
- First I copy+pasted the first 40 pages with the biggest 1,000 Steemit Whales into a spread sheet. You can download it here or here.
- After checking for errors I listed them by value starting with the lowest and partitioned them in 10 deciles.
- Then I calculated the respective total value of every decile plus the total value of all 1,000 accounts and divided that through 10 to get to the average value of every decile.
- As next step I calculated the decile values as percentage of the total value (in the spreadsheet "% of Decile Equally Distributed" and "% of Decile In Reality").
- At first I aggregated the decile values in percentage and created the chart.
- And after that I subtracted the real values of the deciles from the average values of the deciles (also percentage).
- The results of the subtraction aggregated are the Gini coefficient.
The examples for the Gini coefficient I found used quartiles, but I don't think using deciles makes the result worse.
Steemits Gini Coefficient Is Concerning - And I Only Calculated It For The Top Ranks!
A Gini coefficient of 76% that I have calculated is worse than anything planet earth has to offer. It's comparable to a billionaire in his helicopter flying low over a slum in Caracas or Lagos. If you take him, his pilots and the million poor souls who live below them in the slum, then you probably get the same number.
The countries with the biggest income inequality according to a list on Wikipedia plus Steemit and its theoretic spot in the world.
I guess this situation is a normal sign of a brand new and growing place in the virtual space that is still finding itself. In the long run of course this massive inequality in the wealth distribution quite likely won't be a good thing. It might drive away new users when they realize that the cake has already been eaten.
On the other hand, the Gini coefficient is not perfect and no proof, but only an indicator that something is in disarray.
And it also could be of course that I have made a mistake in the calculation. Although considering the result - maybe I should hope that and the real result shows a bit more cohesion.
Really interesting stats to see, please keep us updated about this! Lets see if it will improve.
You probably should not include the Top 10, because they are exchanges and the founders.
Or, just take out the exchanges and leave Dan and Ned. Which probably wouldn't help. Then you have to figure out all the puppet accounts used and who they are connected to.
Never mind, that's probably even more depressing.
hmm you're right. I'll remove the first decile and add another one at the end. I'd say the closer you get to the average the more equally the distribution should be, because there's nothing to distribute anymore. But then again, what happens when all the dead ones get taken out? It could end up as extremely depressing^^
edit
ok, here is the one with the 11th decile instead of the 1st and it does look much more friendly (Gini coefficient is 45.1):
That's about the area of the United States, Russia, Nigeria and Argentina.
So, better than Panama now.
Woo hoo!
Very helpful. Thank you
Very interesting... I guess/hope this will be regulated soon otherwise i believe people are going to loose interest. But I'm optimistic about it.
Nice post though. :)
Awesome look - would be curious to see how this compares to other currencies!
Confirms the suspicions doesnt it? Thanks @doodlebear!
In den nächsten Monaten wird sich kaum was ändern, denke ich. Eher in den nächasten Jahren:) Wenn nicht getrickst wird, dauert sowas wohl seine Zeit.
Anders wärs mir aber deutlich lieber:)
The point of decentralization is that things aren't regulated - consequently, steemit is an open market, and people are free to post just about whatever they want, as well as downvote respectively.
Naturally, there is going to be massive inequality unless individual users go out of their way to seek out new and fresh content and not just rely on their friends/established whales. It's up to us as individual steemians to find the content worth promoting - the "diamonds in the rough", so-to-speak. It's the only real, ethical way to bridge the gap.
I do agree, it's mainly a curation issue. What remains is the problem that the voting power is directly connected to the steem a user has, which means that whales have some 95% of all voting power. You can see that nicely in the charts of the daily statistics. For the moment this has the consequence that it is almost impossible to push good content even if it's 20+ small users who upvote something. You have to be a whale (or you need a good bot). This tightens the bottleneck extremely much.
Maybe a solution could be to use a bot to multiply an upvote. Some of them are cheap.
But without voting power binding, what's the point of Steem Power?
If I couldn't make impactful votes on Steem by my SP, I'd surely leave. That way, it'd mean nothing for me.
The problem is imo not the binding itself but the ratio. Currently 44 users have ~75% of the voting power while the rest of the roughly 40k active users share 15% as you can see in the charts of this artcile. This ratio is improving, I looked it up in older articles of the same user, but it's still completely tilted.
If I had to design it, I would use the 2nd root to moderate the huge gaps. In this scenario 1000 SP wouldn't have 1000 times as much voting power than 1 SP but only about 32 times as much. I think that would make it more interesting for many users to spend time here.
But of course that's all just theoretical. Maybe it can be built into the version after beta.
Holy shit that article is amazing, thanks for showing!
Your idea isn't bad, either - being difficult to reach the top would make the community healthier.
Have you tried discussing it with the developers?
You're welcome.
I think the situation is improving slowly. If in 6 months from now it still looks so extreme, I think I will contact the developers about it. But so far it is still a developing situation and we're using thebeta version of steemit. So, maybe patience will do it.
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