If Steem were a country, it would be the most unequal society in the world
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.
If you are interested in accessing the data used in this article please reach out to [email protected], Tweet at @CryptoQuantalys, or chat in the Telegram channel.
Alright let's dig in.
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.
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:
Social Implications
Countries with a high Gini Coefficient (approaching 1) are more likely to suffer instability. These nations face unrest with a large swath of the population living in poverty on the verge of acting upon their frustrations. Revolutions occur in this way.
If we go back into history here are a few estimates of different historical eras:
- The Roman Empire's: between 0.42 to 0.44.
- 1688 England Glorious Revolution (overthrow of King James II): 0.47
- Eve of French Revolution: 0.59
- USA in 2015: 0.39
Source: https://data.oecd.org/inequality/income-inequality.htm
Casual Observations
Before diving into the Gini Coefficient of Steem let's take a look at the data. the figures below are based on Net Steem Power, not liquid Steem. Net Steem Power is Non-Delegated Steem Power subtracting out Delegated Steem Power and adding in Received Delegated Steem Power.
Steem Power represents a "locked-in" investment into the platform since users have an elongated withdrawal window. Users with a balance of 0.0 Steem Power were also included unless otherwise stated.Net Steem Power
=
Non-Delegated Steem Power
- Delegated Steem Power
+ Received Delegated Power
Snapshot Taken: May 1st, 2018
Sample size: 961,875 accounts on Steemit sampled
Economic Steem Power: 188.273 Million Steem Power
Top 20 Steem Power Owners: Combined holdings of Top 20 Steemians represent 45.2% of Steem Power (85.07M Steem Power).
The 1%: To be in the 1% of the Steem community you need at least 500 Steem Power.
Quick Stats:
- Steem Power Millionaires (owning 1M+ Steem): 24
- Average / Mean:
- 195 SP per account
- 199 SP per account (excluding 0 balance accounts)
- 153 SP per account (excluding 0 balance accounts and Steemit account)
- Median:
- 15 SP per account
- 15 SP per account (excluding 0 balance accounts)
- 15 SP per account (excluding 0 balance accounts and Steemit account)
A Snapshot of the Top 20
| Account | MSteemPower | % | Type |
| steemit | 44.22 | 23.5% | Team |
| misterdelegation | 5.40 | 2.9% | Unknown |
| utopian-io | 3.63 | 1.9% | Bot |
| postpromoter | 2.84 | 1.5% | Bot |
| minnowbooster | 2.32 | 1.2% | Bot |
| mottler | 2.27 | 1.2% | Unknown |
| blocktrades | 2.14 | 1.1% | Exchange |
| smartsteem | 2.13 | 1.1% | Bot |
| dtube | 2.08 | 1.1% | App |
| dlive | 2.07 | 1.1% | App |
| ned | 1.89 | 1.0% | Team |
| buildawhale | 1.84 | 1.0% | Bot |
| databass | 1.72 | 0.9% | Unknown |
| appreciator | 1.70 | 0.9% | Bot |
| steemcleaners | 1.56 | 0.8% | Plagiarism Fighter |
| michael-b | 1.51 | 0.8% | Unknown |
| val-b | 1.50 | 0.8% | Unknown |
| upme | 1.50 | 0.8% | Bot |
| rocky1 | 1.48 | 0.8% | Bot |
| hendrikdegrote | 1.28 | 0.7% | Individual |
| Top 20 | 85.07 | 45.2% |
Distribution of Steem Power
| SP Group | Users | % of Users |
| 0 SP | 19,854 | 2.10% |
| 1 SP | 30,382 | 3.20% |
| 1 - 10 SP | 64,317 | 6.70% |
| 10 - 100 SP | 825,658 | 85.80% |
| 100-500 SP | 12,200 | 1.30% |
| 500-1K SP | 3,458 | 0.40% |
| 1K-10K SP | 4,870 | 0.50% |
| 10K-100K SP | 973 | 0.10% |
| 100K - 1M SP | 139 | 0.00% |
| 1M+ SP | 24 | 0.00% |
| Users | 961,875 | 100.00% |
Gini Coefficient of Steem
If we include all accounts the Gini Coefficient is 0.93. Now that's high unequality! Remember, this includes the Steemit account which owns 23.5% and Witnesses who have received Delegated Steem Power.
Removing the @steemit account the Gini Coeficient is 0.914. Still highly unequal.
Removing the Witnesses and @steemit we get to 0.911.
If we remove Ned Scott (@ned), Witnesses and @steemit we get 0.910.
If we remove the Bots on steembottracker, @ned, Witnesses, and @steemit we get to 0.893.
If we remove Apps (Dtube, Dlive, Busy.org, DSound), bots, @ned, Witnesses, and @steemit we don't move the need at all. Still 0.888.
If we remove mined accounts, Dtube, Dlive, bots, @ned, Witnesses, and @steemit we arrive at 0.870.
This is more unequal than North Korea.
If we remove all accounts with 10,000 SP and more we get to 0.616.
So how do we get below 0.50. To get there based on the sample data set used, we have to eliminate all accounts with over 3,037 Steem Power. That's not just removing bots, Witnesses, and popular fee charging Steem interfaces such as DLive and Dtube, it's also removing modest sized accounts.
In future posts I hope to incorporate feedback from the Steem community. Another approach of looking at the data would be to eliminate accounts with zero posts as presumably they are just plain old inactive accounts. I'll also hunt down more bots and apps as well to get a clearer picture of the data. Maybe there's something there to swing the numbers.
So where do we go from here?
With all that said, I still love Steemit. It's given me a platform to bring content to the masses for free while receiving rewards. However, the data above clearly shows the current distribution of Steem is far from perfect. Countries with high Gini Coefficients undergo revolutions. If Steem were a country, it too might face the barbarians at the gate. I welcome your suggestions on how to improve the distribution of content.
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I don't see a revolutional situation from steem inequality. You don't risk die of starvation by having too little steem of your wallet.
Aalso yo should exclude inactive accounts as many were created for spam of for fun and almost every single one of them has 15 sp.
Indeed, you can't compare the world with a platform... those things doesn't the same way
Agreed. A few commenters have made the same comment as well. In next month's edition I plan to remove "inactive" accounts. Appreciate the feedback.
There is a saying "He who holds the Gold are making the rules". The whales contribution is buying up the steem and they invested their time to accumulate that wealth. Good point of view of bringing this Gini coeffiecient in our attention @quantalysus
Still no whale or even coalition of whales won't dare to open conflict with steemit.inc.
So steemit.inc making the rules.
Thanks for reading. There are quite a few accounts working on growing the overall ecosystem. Distributing Steem Power is just one hypothesis in doing so.
One major difference is the trend. Today in countries like the US the rich are getting richer, holding a larger share of the wealth. The distribution in Steem is such that it is spreading out, it is already vastly better than it was a year ago or two years ago. It might be slow by crypto standards, but crypto has an absurdly fast pace of change. Compared to countries, we are rapidly de-concentrating wealth.
I joined Steem last month so my commentary is reserved to this snapshot. From what I've read around the platform, Steem is becoming more distributed. I'd love for the distribution to break down over the next 1 or 2 years. The rate of change should be noticeable.
I love this response. I was told a story of how some people were earning 40k per post here before which was later addressed by linear equality. Steemit team is really working and I agreee with the fact that here is always subject to change and fastly so.
@eurogee
I keep hearing this but I'm not so sure. Yes the smaller accounts are growing, but who really owns them?
I know of at least 2 witnesses sock puppeting the hell out of their combined 2m SP. And stats I did a few months back seemed to show other obvious feeder setups.
The dapps and utopian are helping though, it would be nice to see earners here hold on to SP and make it to the thin middle class layer.
It's undoubtedly true. In order for the stake distribution not to be widening, whales would need to be taking a proportion of the reward pool greater than their existing stake share as a whole. Since whales own 90% of the stake, they'd need to be self-extracting 90% of the rewards, which they aren't.
Do you know if anyone is detailing this data?
I might have to look into the tables...
There used to be a chart showing distribution by account on steemdata.com but it's gone a little while.
You'd only need to collate accounts that are not whale sockpuppets/meatpuppets getting 10% of the recent reward pool collectively to disprove the idea that whales on the whole are increasing their stake.
Argghh, too hard!
The need to factor in a bot vote, which is likely break-even for the author, and going 70/80% to the delegators (could be a whale or a minnow) and the rest to the bot owner has blown my mind.
Maybe I need to look at it the another way - i'll go to the beach and ponder :)
Whale accounts own 240GV together, or 61%. If you add the other known sockpuppets together and count them as 'whales', it will be a few GV more. (Actually the fact that it has dropped so low is evidence the stake is getting wider distributed).
To prove that the stake is being spread out, you only need to show that at least (100 - WhaleStake%) are going to non-whale (or whale sockpuppet) accounts. You can choose to eliminate those getting upvotes from bidbots from this if you want (I don't think that will make it much harder).
At least at the last time I checked it was clear the vast majority of rewards were still being spread out to ordinary accounts. The rent seeking is getting bad, but it's certainly far from the majority or rewards today and less than the % required for stake concentration to be increasing.
You cannot change the amount that people have but going forward you can make it easier for newer and smaller accounts to make it.
There should be a beginner boost or something like that to encourage new peoples post to be see more then these huge accounts!
I like this idea
Or some sort of 7 day average, rewarding currently active users.
Thats a good idea too...rewards based on consistent good articles which recieve a certain amount of votes.
These bots i feel throw alot of the true numbers off
This is exactly what I feel about Steem. There ought to be a form of incentives for beginners like us. We scarcely knows how to find our posts rewarded or even seen by the community. Steem apparently is less democratic in my views.
Steemit is no different than real life. Richest 10% of people are richer than other 90%...
actually unfortunately thats's right, rich is getting more richer.. same as real life
If Steemit was a country.
The rich had all the power and the poor were doing the hard work for them.
Just like real countries and real life do right now
Especially in third world countries. But still, here u can buy SP and feel yourself quite comfortable. Like me, lol :)
That's a cynic's view. But maybe you're right. Damn.
Cool analysis, this puts me in the top 0.5% which is a big surprise to me actually.
But as i understand you included all acounts and to me if you would compare this to a country would be like adding all dead people that ever lived in that country to the living population.
There are a whole lot of dead accounts here.... the steem cemitary
What a morbid thought, but true.
the word steem-etery just pop up in my mind, lol
yep, the place where accounts go to die
I always know that Steem Power distribution was poor but when you see the actual numbers....that's an eye opener.
🤯