Steemit Economics (Positivism vs. Praxeology) [Part 1]

in investments •  8 years ago  (edited)

This is a response to the post "Got a Problem with Steem's Reward System? Read This!" by Sean-King.

First, thank you for your post. It was thought provoking, leading me to conjure up this post.
Second, you're half-wrong.

My discord is based on the following:

the purpose of Steem is first and foremost to place a valuable currency into circulation.  Given that, there's really only one "logical" way to measure a post's value:  Does it make the currency more valuable and lead to broader interest and circulation? That's it. The end.   

The way to measure a post's value is whether it increases the value of the currency.

This is the way it must be right now; if this remains the primary purpose, content (slow thinking) will certainly lose to emotional pandering (fast thinking). If there were 30 million people on Steemit, it would only exacerbate the common denominator. People are here because they can make money. The increase of the value of the currency is a potential that the people look forward to, but is not primary. The whales are founders, early adopters, and the few that slipped in. They are more concerned with the value of the currency. That is why they upvote authenticity and Steem posts.

All that matters to a rational Steem holder, especially a whale, is whether or not the post improves the value and distribution of Steem.

Rationality is widely used as an assumption of the behavior of individuals in microeconomic models.
People thinks primarily with "System 1," and secondarily with "System 2." (1 2)
Cognition comes into play AFTER the limbic system.

Fact is, beauty and sex appeal are draws. We are hard wired for attraction to such things. There's just no avoiding that, and we'd be silly to try.

More generally, we are hard wired for excitement. We are fortunate that Steemit is filled with people who are excited about cryptocurrency, offsetting the excitement sought by the general populous. But when Steemit gains mainstream audiences, this content will be buried in the cacophony. There are solutions, which I will explore in Part 3; Steemit is a blend of the top social networks, but I intend on fostering the best features of each while obfuscating, or improving, the worst features.

these things were deemed by whales to be important to Steem's growth and distribution potential

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source

The top wealthiest 1% possess 40% of America's wealth; the bottom 80% own 7%. (wiki)
The top wealthiest 1% possess 90% of Steemit's wealth; the bottom 80% own < 1%.

I understand that the redistribution of Steem Power is currently in process, and that the founders and early adopters are the 1%. I point this out to highlight the current inequality, as well as a long-term goal in this respect.

Those with more to lose should have a bigger say in what happens than those with less. That's how self-sustaining and self-regulating systems work. Put too much decision making authority in those with little to lose, who are not sufficiently vested in the system, and...well...you end up with a fiat economy. Head's they win and tails you lose. 

Putting too much decision making authority in those with little to lose is a fiat economy.

The difference is that in a fiat economy it's not the masses that have too much decision making authority with little to lose, it's the whales... which is the current state of Steemit. I grant that once dolphins, sharks, octopodes, and squids get in the game, the inequality will wane; and that plankton, herrings, minnows, and krill will always be the core of Steemit. But I crave unique, unapologetic, and creative content. And the whales are focused on building the community and whether a post increases the value of the currency.

This is not a complaint. This is recognition.

To conclude part 1, I believe "the way to measure a post's value is whether it increases the value of the currency," should hold until the redistribution is further along. The future of Steemit rests heavily on the GUI, interactivity, and curation.


Part 2 preview:

Positivism vs. Praxeology

Positivism is a philosophical theory stating that positive knowledge is based on natural phenomena and their properties and relations. Thus, information derived from sensory experience, interpreted through reason and logic, forms the exclusive source of all authoritative knowledge. Positivism holds that society, like the physical world, operates according to general laws.

Praxeology is the deductive study of human action based on the notion that humans engage in purposeful behavior. According to its theorists, with the action axiom as the starting point, it is possible to draw conclusions about human behavior that are both objective and universal. For example, the notion that humans engage in acts of choice implies that they have preferences, and this must be true for anyone who exhibits intentional behavior.

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Finally able to reply.

I suggest reading the whitepaper again. Distributing the currency and increasing its value is indeed "primary". The social media platform is simplify a Trojan horse. And "quality content" is an expected effect, but not the purpose.

Many people get this backwards, leading to constant frustration and disappointment when the see "emotional pandering". They have nothing to be disappointed about because the founders were quite explicit in the whitepaper as to their intentions. And they have since reiterated those intentions with their "evil plan for world domination" post.

People do not come here primarily for quality content, though that's a useful side effect of the platform. They come here to make money and to see other people make money. They come here for the dopamine hit. They come here for the same reason people gamble (though with Steemit there's little to no cost to wager). They come here and stay here for the "gamification". Steemit has gamified social media better than any other platform in history. It's the game that hooks them. The actual content is secondary.

I agree that humans (including "whales") are not rational actors. Even so, at a gut level, they vote for the purpose of increasing the value of their holdings. That vote may be driven more by emotion than rationality, but the purpose of the vote is the same nonetheless.

It's irrelevant whether the ones with everything to gain and nothing to lose are "the masses" or "the whales". Anytime people who make decisions that impact the community have little to no "chip in the game", disaster awaits. That's the fiat economy. With Steemit, the people wielding the most influence are whales (just like in the fiat economy), but in the Steemit economy, and unlike in the fiat economy, whales suffer the most if their decision is the wrong one. Both profits and losses are privatized on Steemit. In the fiat economy, profits are privatized while losses are socialized.

To conclude, Steemit will have awesome original content because it is the best platform in the world for it, but that's not why it exists. And, just like the art museum in most cities is surrounded by a much more vulgar culture, so will it be here too. Steemit won't be ONLY, or even mainly, a place for quality content, though more of it will be found here than any other social media site. There will always be plenty of "emotional pandering" too (to satisfy the masses).

Currently the "slow thinking" posts often get lost among the "fast thinking" ones. There's currently no way for people to sufficiently sort to their liking. That will soon change when the "follow" feature starts working, and tags become more diverse and better policed. At that point, those who want quality content will see mostly that, and those that want smut will see mostly that too.

Great reply. Thanks for taking the time.
I'm starting to understand your perspective.

SteemIt also seems to be a very interesting experiment in Game theory!

Amazing post! I also crave "unique, unapologetic, and creative content." Let's hope the future Steemit fulfills these desires.

Thanks for this. I have a few thoughts that I will share when I get a chance. Probably over the weekend.

Best,

Sean

You're on fire, man! Any thought to putting this up on github so other PHP devs can play around with it as well? Some things I'd like to see which may or may not relate this specific tool:

Similar to the rich list, I'd like to see one sorted by:
Curation Reward
Post Reward
I'd love to see change over time graphs on various things including:
VESTS
Steem Power
Curation Rewards
Posting Rewards
Number of Posts
Number of Votes
This is making me jealous because there's a part of me that wants to take a sabbatical from my company and work on tools like this all day long. Very well done! Keep it up!

Haha! Thanks... unfortunately, it seems like you may be confused. I had no hand in the making of steemd. Whoever did... well, they did an amazing job and should truly consider your great suggestions!
I hope you work on tools like this at least part-time, because it seems like you have a passion for it!