It's actually quite tame, I promise!

So, what's wrong with it? Well, there are lots of things wrong with it, and people have written lots of articles about various problems with the Gini coefficient. In this article, I will focus on one specific problem that I think is under-discussed about the Gini as a whole, but that has particular relevance to analyzing inequality in internet communities such as blockchains. The Gini coefficient combines together into a single inequality index two problems that actually look quite different: suffering due to lack of resources and concentration of power.

To understand the difference between the two problems more clearly, let's look at two dystopias:

• Dystopia A: half the population equally shares all the resources, everyone else has none

• Dystopia B: one person has half of all the resources, everyone else equally shares the remaining half

It's actually quite tame, I promise!

So, what's wrong with it? Well, there are lots of things wrong with it, and people have written lots of articles about various problems with the Gini coefficient. In this article, I will focus on one specific problem that I think is under-discussed about the Gini as a whole, but that has particular relevance to analyzing inequality in internet communities such as blockchains. The Gini coefficient combines together into a single inequality index two problems that actually look quite different: suffering due to lack of resources and concentration of power.

To understand the difference between the two problems more clearly, let's look at two dystopias:

• Dystopia A: half the population equally shares all the resources, everyone else has none

• Dystopia B: one person has half of all the resources, everyone else equally shares the remaining half