|
|
|
|
|
by marto1
1619 days ago
|
|
So we have an asset that follows a Pareto distribution[1]. Now if one has spent any time and resources investing they'd notice that this holds true for a lot of assets. Bitcoin is really not exceptional in this. Are you after an asset that doesn't follow that distribution ? Do you consider this a good thing ? [1] https://en.wikipedia.org/wiki/Pareto_distribution |
|
I think it's obvious that this extreme case is very bad. So there must be a point where alpha goes from being in "good" territory to being in "bad" territory, or there must be some gradient of "least concerning" to "most concerning".
The question asked by OP is basically equivalent to "what is the value of alpha?" Considering the potential for concern, this seems like a useful thing to measure.
I don't want to speak for anyone else, but when most people talk about wealth/income distribution or inequality, they generally aren't advocating for a flat line (everyone has an equal amount of dollars), they are generally advocating for keeping Pareto's alpha at some reasonable level.