RE: How viable is Steem as a currency as the Steem network must constantly create tokens to reward bloggers and enable votes (causing lots of inflation)?

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How viable is Steem as a currency as the Steem network must constantly create tokens to reward bloggers and enable votes (causing lots of inflation)?

in promo-steem •  5 years ago  (edited)

But under lower inflation, it will still climb relative to everyone else, but without the ability for everyone else to do anything about it. The distribution would remain quite static and similar to now unless they sell - which is likely if price climbs enough also. The problem is that if there is such a thing as good actors to come, they do not have much chance of ever gaining influence against those who have largely proven themselves indifferent to the community for 4 years.

edit: I will add - publicly indifferent at least.

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  ·  5 years ago (edited)

It would stop increasing (about 0% per year after inflation rather than 3.5% or higher currently, all else being equal; over numerous years even this is a BIG difference). Okay maybe that's still not ideal, but it is better.

We could use a solution to the rich-getting-richer problem that is sort of baked into proof of stake, but unfortunately we don't have one. Sticking with the existing system is not only not a solution, it is making matters worse.

Meanwhile we stop needing massive inflow of new capital (which mostly isn't there) just to maintain the price and value of Steem from draining further down the toilet. Like I said earlier, it buys time to find solutions.

Fair enough. I will have to think more about it and factor in some of the things you have mentioned. I have suspected for a long time that the tap will close and I have posited a long time ago that it would be through a fork that changes the inflation rate. This isn't unexpected, but I am still undecided on whether it is the best way to go. Since I have relatively high stake, it would benefit me, but since this is a social environment, the entire population needs consideration. If SMTs pan out, they will create their own inflation pools anyway, so this might be the best way to secure the Steem infra.

  ·  5 years ago (edited)

It is unlikely to be imminent (apart from what we can do within the existing consensus rules, such as voting for @burnpost), but the logic in favor of stopping a very expensive and a broken system is pretty compelling; perhaps someday it will achieve consensus. I don't really know.

It is also possible that we will come up with better solutions before that point, and we will then know how to spend high inflation in a manner that is actually a valuable growth engine instead of a waste of money. I can't rule that out.

Since I have relatively high stake, it would benefit me

I would narrow that somewhat. Since you have a high stake that (I would assume) you aren't using for shameless self-enrichment, it would benefit you. The largest stakeholders who do aggressively leverage their stake into either an income stream or gaining more stake would not benefit from the inflation cut.

If SMTs pan out, they will create their own inflation pools anyway, so this might be the best way to secure the Steem infra.

Yes, that's part of the thinking behind the idea.

You assume correctly.

One thing with pulling more people into the community is the chance that some of them will see what other might have missed with fresh eyes and new ideas, and innovate something entirely new. Perhaps one chances upon the missing piece.

Thanks for taking the time.

  ·  5 years ago (edited)

We all need to warm up to the idea to like the blockchain we have, not the blockchain we ideally want. We play the cards we are dealt with and try to make it better from within.

Pretty sure the latter is what we are doing here.

  ·  5 years ago (edited)

Yes, I am sure you personally are. So are many key players. But can we say that for all or majority of the key stakeholders and influencers? It’s a log normal distribution smooth and that’s fine..... question is how big is the tail of the distribution and how much we can move the mean towards our end :)