I agree with your comment, I think pretty much the same of Umair’s writing, but most interesting to me was your mention of the Gini coefficient.

I remember this from the distant past, maybe school, but had completely forgotten the principle until you prompted me to go and refresh, thanks for that.

After some months of intensive research on crypto-currencies, in an effort to understand and explain why Metcalf’s law correctly describes the token market value in terms of fiat currency, another piece of the jigsaw seems to relate to the Gini co-efficient.

We can see that the token value of a crypto-currency goes up as a function of the square of the number of users. Most crypto-currencies are based on a fixed or heavily restricted supply of tokens. Thus more users can only be brought into the network by re-distributing already available tokens. Every time a non-user receives payment for a product or service in the form of tokens, for example, a new wallet is formed, and thus a new user is added, the token stock is slightly redistributed, and the token value is subsequently increased.

The corollary is; the Gini coefficient is an inverse indication of the value of a token community, just as it applies to the value of an economy.

This adds to the mathematical proof that inequality actually has a strongly negative effect on the value of a token, or an economy.

In the case of a token, even better; we see a solid relationship between how much wealth one might be holding by having a number of tokens, vs how much that wealth could be increased by giving away some of those tokens, and guess what, the square law of gain outweighs the linear law of loss.

So, for all of those “hodlers” of tokens, the message is; if you really want to get rich, start giving away some of those tokens to those who need them.

Let that Gini out of the bottle!

Solarpunk

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store