# Gini coefficient

By [ldgr](https://paragraph.com/@ldgr) · 2022-11-01

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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](https://www.prospectmagazine.co.uk/economics-and-finance/rebottling-the-gini-why-this-headline-measure-of-inequality-misses-everything-that-matters) lots of [articles](https://www.theguardian.com/business/2019/oct/04/gini-index-is-a-poor-inequality-measure) about [various problems](https://towardsdatascience.com/why-measuring-urban-inequality-with-the-gini-index-is-a-bad-idea-3d67b555dded) 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

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*Originally published on [ldgr](https://paragraph.com/@ldgr/gini-coefficient)*