The potential for Steem insanity

in hive-167922 •  5 years ago 

Do people understand what insanity might look like on Steem? Just wait until the All Time Highs (ATH) arrive, as over the last two years, there have been a lot of people who have powered up a fair bit of Steem, even as quite a few others dumped. This is one of the things I am really looking forward to, as while I of course would like to get some thick benefits after sticking through the thin, I think it is going to be amazing to see what people who have powered up in the lean times are going to do with their stake.

While the Steem distribution itself is harder to calculate as it is affected by various dynamics including competition on the pool from the sunshine only accounts and all the new people to arrive, the vote value is relatively simple - at least in SBD - though since it isn't pegged against the US dollar, it is not accurate. Still, it is good to understand as the blockchain calculates payouts as if it is pegged. Usually. Okay, maybe not that simple, but it will do for now.

IMG_20200208_174052.jpg

For example, my current vote value is around 60 cents (assuming SBD is 1 dollar) and since the blockchain price feed for STEEM is 20 cents, it means that one full vote (100%) at full voting mana is around 3 STEEM in value. With all other things remaining equal, no matter what the STEEM price is, even if my vote value itself could be 100 dollars, my current vote would still draw 3 STEEM from the pool.

Okay, so why would the place go insane?

Well, the current STEEM price is 20 cents, but the All Time High was above 8 dollars (Let's assume 8 dollars to make clean calculations). For Steem price to get there again, it would have to increase in value 40 times, or 4000% - that is a lot. But if it did, it means that every vote value will increase relatively. That means that while my vote value is 60 cents today, it would increase 40x and be worth 24 dollars if STEEM reaches $8.

That is a big if for many to overcome.

As you can see, that is where that 3 STEEM is still in play as a 24 dollar vote would only be worth 3 STEEM at 8 dollars. But, I would be delivering 240 dollars worth (30 Steem) every day. And while yes, I would get a return of around about 50% of that through curation, it means that 120 dollars a day is going out to the community, 840 a week, 3360 a month.

That is pretty decent, is it not?

However, this is the insanity.

There is currently ~850,000 Steem in the pool worth ~174,000 US dollars. This get distributed in various ways around the platform with about 65% going to content creators and curators, split 50/50. However, what this means is at 8 dollars, the entire pool is worth;

850000 x 8 = 6,800,000.

That is quite a lot of distribution of value potential and at those prices, I would predict that Steem is probably the most highly "paying" content delivery platform in the world and if held solid over the space of a year, would payout all told around 208,000,000 from the pool. This is without mentioning the potential value of the other tokens on the platform and to come, at all.

Do you think that is insane?

I do.

Why I am so interested in what would happen under these kinds of conditions is that many of the people I have noticed who have powered up over the last 2 years, are community orientated people, people who are already supporting others. I would suspect that since the fall of most of the bidbots, community curated content has taken a very large rise in the rankings. This is because all of the stake that was being "unnaturally" directed to content, is now being directed to content of people who do not call it, it is more organic, more human. Still imperfect.

While community people today, I am sure that some of them are going to have the force of greed over power them as it did many last bullrun when people created alts to rape direct more from the pool to themselves. However, I am quite confident that many will do a better job and show some self-control in order to make Steem a valuable place for many more than just themselves.

Behavior in a Bear market tells a lot about a person on Steem. Behavior in a bull market does too.

But just think what this place could do for content creators at those kinds of prices and how much organic publicity should be able to be generated and leveraged at a global level. Steem definitely didn't capitalize on the last run, this time I think and hope we are better prepared. A lot of people see a bull market as a time to reap what has been sown, but I think that most would be best served by planting gains into full steam development and expansion to engage, empower and solidify a user base. The reason is that once there is a strong user foundation, the floor value becomes more stable and the more of these across the platform, the hire that value will be.

This means that while an ATH will always regress toward the mean, the foundation has been developing beneath the run up to raise the support height. Some percentage of users who sold early and are waiting to buy back, will miss their opportunity and end up holding less or zero Steem. While they might have earned it cheaply before, Increased price means there will be a lot more competition on the pool and earning STEEM during the highs is by far harder than during the lows.

Under heavy upward price action, the dynamics of Steem change very fast and already the "returnees" are arriving and ramping up their posting, after being away 6-8-12 months.

"Hi, I've been really busy and I'm back now - but it isn't because of price being up!"

That is fine - welcome back. I hope you held.

As said, I am looking forward to the highs for personal reasons as it would really help my out, as it would pretty much anyone, as well as out of my normal position of curiosity. I am a people watcher, I observe behaviors, I enjoy seeing how a move here can pull a string over there. Steem is a fantastic place to see all of the little idiosyncrasies and interdependencies between action, reaction and outcomes that start the process again.

For STEEM to go to all time highs, it means that the entire crypto market has done the same and as a result, there will be immense interest and eyes on the entire scene. While last time there was focus put on Bitcoin and a little wash for Ethereum, the coming run is going to focus on the usage and applications that allow normal people to participate. This has the potential to absolutely explode the entire industry and ramp it into mainstream usage and the vernacular incredibly fast.

A lot of people are looking to the past to predict what the future will look like, which is usually a pretty solid plan. However, when it comes to emerging industries, the past data can become outdated and useless rapidly. I wonder how many would sell if Steem went to 8 dollars.

I wonder if they would then be disappointed if it went to 16 the next week.

Insane?

Taraz
[ a Steem original ]

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@tarazkp, I still remember the day you forgot your wallet at home and of course the money in one of your trips between cities. I offered to pay you for food through this beautiful platform. I am still trying to get some project of that kind forward, I will not give up: https://steemit.com/steem/@theclub/theclub-definitely-a-special-club

Thank you for your motivating posts!



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  ·  5 years ago Reveal Comment
  ·  5 years ago (edited)

I gotta say, as someone who took a long hiatus of being involved in crypto in general and STEEM specifically, I'm pleasantly surprised with how things are feeling on Steemit these days. The tenacity of the core dedicated community really impresses me.

I also want to mention that I can remember when my vote was worth an absolutely absurd amount in the last bull market when I was renting a lot of SP (It was maybe 30 - 50 dollars a vote I think) and it was extremely empowering. However, I did not cash much of anything out as I didn't want to hold fiat and got caught in the bullish euphoria. What a magical time that was—

And what important lessons that experience taught me. All told, the STEEM community will always be near and dear to me regardless of developmental growing pains and no matter the price action.

I was thinking about where you were the other day as you used to be more active on posts discussing things. Hope you are well.

Those high vote times were pretty crazy and if we can get back near there and stay there a little while, it would make a huge difference. I didn't cash out either - still yet to gain from crypto at all. lols.

Would be great if the Steem community spent more time empowering and less time maximizing but I guess that is part of the learning curve too.

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It's fascinating to consider the way the different incentives might play out. I know for myself, in the last 2 years, an author's likelihood of selling has been a big factor in my voting decisions.
If STEEM regains $8, I'll be far more concerned with quality, and far less concerned with supporting the price. I also imagine I'll vote with less weight, on more authors.
Assuming others do the same, the currency itself will be spread a lot further; which is the other side of the equation. If we moon, then come back down to $1, but we have 5x more people holding/using/accepting STEEM and/or SBD, I'll consider that a win.

I also imagine I'll vote with less weight, on more authors.

I believe this is one of the core reasons it is harder to earn at the highs as people more closely evaluate what something is worth. A meme today could get 5 SBD or 25 STEEM, but at 8 dollarSteem, most aren't going to think it is worth 200 dollars - so they lower the voting vests.

I know you know this, but just in case someone reads ;)

If we moon, then come back down to $1, but we have 5x more people holding/using/accepting STEEM and/or SBD, I'll consider that a win.

Yeah, it is going to hopefully be another aid of distribution and then, SMTs get involved too.



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  ·  5 years ago Reveal Comment

As someone new to steem this was really helpful to understand how it all works so thanks. I think the fact that you could make so much steem just by already having a lot seems strange to me - it should be designed to reward quality and discourage just gaming for profit.

I'm also new here, trying to figure out how things are related. I totally agree that the rewards for better content can still be improved.

  ·  5 years ago Reveal Comment

Thanks for this metaphor, that makes it a bit easier for me to understand. But I guess that I'll still need time to delve into these thoughts. Glad the community is helping here!

  ·  5 years ago Reveal Comment

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  ·  5 years ago Reveal Comment

I'll be honest at $8 I will pull some of my fiat investment back to remove risk. Not a ton, but enough to offset some of my highest priced purchases. Oh and no way I'd be disappointed if it then went to $16+. With this risk removed I'd be able to let the rest ride.

It will be interesting if we reach those levels to see how people reach. I've been plugging away with @pifc for 96 weeks now which gives me a little different insight into some things IMO then many have. Have soon so many come and go, seen so many scams to milk the reward pool, and so forth. Really hope that when the next bull run happens people act better then they did during the last one.



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Hi @thedarkhorse

I've just visited your profile to check out if you posted anything interesting lately, just to realize that you didn't publish anything in a long while.
Hope you are well and didn't give up on steemit yet.

Cheers, Piotr

Just been to busy with getting things ready to open the store. Not giving up on Steem, just focused on my priority.

hope you've managed to open your store and you're doing well buddy

  ·  5 years ago Reveal Comment
  ·  5 years ago Reveal Comment

Your opening paragraphs sound so very confident XD

  ·  5 years ago Reveal Comment