Ladies and Gentlemen,
Steem has been a fun ride. Like a rollercoaster. But in reverse.
Fast as hell going up. Slow, slow, slow as Aunt Jemima's toe jam coming down.
Guess why?
It's engineered as if we live in an alternate universe with different laws of physics. And guess what - it didn't prove anything - it just reinforced the reality that value can viewed through the lens of physics. And yes, perspective is a manifestation of physics. Now, the physics of reality are working against us. And they will continue to do so because the laws of physics do not change.
I digress.
As I pointed out yesterday (https://steemit.com/saving/@bobsunday/price-will-continue-downward-unless-we-make-a-simple-change), the only way to fix STEEM is to re-engineer the emission (inflation rates).
There are going to be some challenges in this. One is status quo. One is political, meaning ego and incentives from the large voices in STEEM. One is selecting the best alternatives (new inflation algorithms). The latter here is the most important. We as a community can come to the solution. We can put pressure on Dan and Ned to make the changes. Hell - they may even be relieved if we tell them the better alternative. I'm wiling to bet they are going to be very tired of schlepping for a coin with backwards economics that scare investors off at every turn. If this coin had simple economics, imagine the market makers and investors that would have already been attracted here.
Bottom line - we need to suggest the better alternatives and get Dan and Ned to implement.
Dan and Ned are going to be very hesitant to suggest changes because of the blowback they anticipate from community members who flip out whenever ideas of change are proposed. They can fork the code and go elsewhere. So we need to ask them for what we need from them.
So the only solution is for the suggestions to come from us - the community.
Here's my proposal.
1. Witness rewards are paid as STEEM at a rate that covers costs. (Kill the payout in SP).
2. Kill the Power Down contract of two years. Change it to 4 power down payments over four weeks. Also if powering down - then no voting power for that stake.
3. Those in SP get the opportunity to earn from accurate CURATION. AND 5%.
This proposal kills the long term spillage of STEEM POWER. STEEM POWER as it is today will suffocate the system. There will be slow and long seepage that never ever again allows the price to go back up. No matter how much ad revenue steemit or whoever generate to create buy pressure. The seepage will not be overcome. No matter how many speculators are doofed into buying Steem - the price will not sustain upwards.
Therefore Steem Power in this system needs to change. Payments in Steem Power need to change.
If we change it, we have a bright future ahead. No other crypto has so many people and talent so well organized. It wont take much to go get STEEM into the hands of those Wall St. traders if there isn't asinine 110% inflation.
Now. I want to hear from you. Your comments. your suggestions about how to dial these knobs differently. AND WHY.
@everyone @smooth @steemed @recursive @roadscape
@ned @dan @luminati
@community
@economists
It's not hard. Use simple economics. Kill the Steem Power contract. Upgrade the code. Move on. Grow this thing to the MOON.
THANK YOU.
I spent $200 to get this message to the steemers. Hopefully the community responds.
Hopefully the devs respond.
Blockchains shouldn't need leaders. But here I am trying to be one. However, there can be no leader without followers.
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Hi Bob. It is really awesome that you care so much. The idea you are proposing is a great recommendation. The problem with what you are proposing though is that a drastic change to the "property rights" like what you have here would not be fair to everyone that has bought in and invested resources based on the way the blockchain was proposed in the white paper. Changes like this to the fundamental nature of the blockchain and coin are typically things that kill projects like this, because there is no longer stability that investors can depend on. Many will think "if they just made a change that screwed over all their existing investors, what's to stop them from making another change that will screw me if I decide to invest".
There are definitely some issues with the current dynamics of the way funds and rewards are allocated, but they are solvable problems within the constraints of the existing framework. It will take some time to get there, but many solutions are in the works.
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Where are these investors concerned about change? Surely they would be involved in this discussion no?
There is barely anyone left here man. Anything that can save the ship will do.
People invested in this project to make money, most people lost everything already especially those who bought at the top and the inflation is not going to compensate them, it's going to send the price to 0.001$ and lower. How is a change that can make people's investment finally growing in value unfair? Investors don't care about change as long as it benefits them and if you think removing the inflation will screw the system even more then you need to learn basic economics :)
What OP is trying to tell you is that "No matter how many speculators are doofed into buying Steem - the price will not sustain upwards." and he is totally correct. The current system is fundamentally flawed in that it is designed to suppress the steem price. Because of that the future growth of the project is compromised.
All the existing investors have been screwed already, people bought from 4$ all the way down, they already lost a ton of money and they never gonna see it back with such inflation. I mean can it really get any worse?
what stability? please look at the 2 months chart man
People seem to think that removing the inflation down to a normal level is a major change, it's definetely not because as I said multiple times the inflation had no purpose in the system at all.
Steemit is beta software, it is an experiment, investors knew that and I am pretty sure investors welcome any change that will turns this situation around at this point.
When the price hits 0.001$ people are going to beg for change .
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You assume that the price is just going to keep heading down to zero, which is not necessarily going to happen. If the price does recover and go back up past it's current high, then a lot of the people who made large investments with assumptions about how the blockchain would distribute STEEM would not own shares of the system they thought they were buying into. Every change to the property rights is going to have winners and losers. If they start making changes to who those winners and losers are, then it starts to become very unfair to those on the losing end.
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You assume that steem economics are sound.
SP holders inflation rate is already 10%, getting the inflation of steem to that level would make absolutely no difference to investors's expectations and wouldn't change the % of share that they have.
The idea that SP holders receive some free token issued by the blockchain is an illusion. It is just a compensation for the unnecessary inflation. Remove the inflation, stop compensating people and you have the exact same system in place.
What do you mean losers/winners? Everyone would be affected similarly by any change.
Highly unlikely, the more coins are being printed the more money would have to be invested in the future to get the same price/steem ( rewards on the platform) . The hyper inflation makes it more difficult every day for steem to go back to its previous high. The longer we print the harder it's going to be to get a high steem price, and this will have consequences even after a change is made to remove the inflation. The idea that locking people's coins will prevent the negative effects of inflation is pure delusion. You will probably understand the impact of this crazy printing soon enough.
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We have different views, and both of us are making assumptions about how this will all play out. I see your point of view and get what you are pushing for/why. I just happen to believe that the way the system is setup today is better than what is being proposed. You probably will think that I'm being stupid or missing the facts of the situation, but really all it is is that we differ in opinion on what we believe is best for Steemit.
It's probably best to end the conversation here, because at this point I don't think either one of us is going to convince the other of what we believe is right :)
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You think that putting unnecessary downward pressure by default on the price of steem is better than not put any pressure at all?
Please explain why you think the way the system is setup today is better. I have explained how removing the inflation is a much better system for 2 days now, have made multiple posts asking for counter arguments but have had none.
So I am really interested to hear your thoughts.
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It's a lot of info to type, and I'll need to review some of my facts from the white paper first. Both of which are not going to be easy from my cell phone :) Since you seem genuinely interested though I will type up my thoughts when I get home tonight. Are you on Steemit chat? That would probably be a better forum for a back and forth discussion than replying to a post.
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Unfortunately I am not on steemit chat. I d be glad to hear your thought here nontheless
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Ok, no problem. I'll write up my thoughts tonight.
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I replied in the other thread where this is being discussed, since there is more traffic there.
https://steemit.com/steemit/@timcliff/attention-sharks-there-is-blood-in-the-water-are-you-ready-to-invest#@timcliff/re-snowflake-re-luminousvisions-re-timcliff-attention-sharks-there-is-blood-in-the-water-are-you-ready-to-invest-20161026t235001037z
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@bobsunday I cannot speak to the technical side of things but Steemit management must respond no matter if it's popular or not. Your leadership and that of others asking for the dialog is key, and helpful. Give me an advertising product that I can use, and I will. Integrate steemit into a fully integrated wordpress plugin, and I will use it. Stabilize the price, and I will buy it. Don't let another great product die when it can rise up, and lead the world with innovation, and success.
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My proposal would be
Completely remove the unnecessary inflation, only create new coins that are useful for the system ( pay for the witnesses and the rewards) which is about 10% per year
Reduce the lock time period to a month ( 4 payments ) or even 2 month ( 8 payments).Note that the longer the lock time period the more you will need incentives for people to power up.
If I was a steem dev I would reduce lock time period to 48h ( only to prevent double voting ) I believe that liquidity creates stability, the more the better and I see no benefits from locking people's money.
Increase curation %, I think it's about 25% of a post value make it 50/50 . This proposal is more to incentivize people to vote more than anything else but it would also incentivize more people to power up ( however as I said already if you only have 10% inflation it doesn't really matter how many people power up or down)
Basically this will allow the price to grow, speculators to enter the market, new users will want to play the steemit curation game as the lock time period is reduced, there will be more active curation, a scarcer token, the market volume will increase and investors will be more confident,
people who want out will be able to do so faster so a faster market price discovery, every new steem project will bring more money in which will increase the rewards and balance for everyone, the redistribution of power will be faster,
there will be no need for a reverse split ( which will confuse people more than anything), price will be more news sensitive which is very important to bring in new investors ( investors buy when other investors buy). I can only see positives with such proposals and if you guys see any negatives please comment below. The founders said that they want to remove speculation from the equation but
you know what the best thing that happen to steemit was a speculative event ( july bubble to $4) which created a hype cycle, steemit was in the news everywhere and gain huge number of users from it.
The best way to have people invested long term is to have their investment gradually go up, there would be a lot more long term investors if we allow the price of steem to grow.
The long 2 year lock time period and the crazy inflation are both 2 main components of this system and they both serve no purpose, the latter actually serve the purpose of reducing rewards on the platform no joke. The 2 year time lock period 's role is to prevent people from selling the highly inflated steem but it is not even clear why it is inflated in the first place. I fail to see what this inflation tries to achieve.
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Thank you, Bob.
We of course look at Steem from all the angles we can.
We will take your view into account as we design possible future directions.
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Great suggestions Bob. I've been wanting to invest for a while now, but the incredibly high inflation rates is one of my major concerns. Especially when the rate of inflation is higher than the power down rate. i.e. Those who power down will still continue to have more SP over time than the starting point of their power down, even though this is a smaller slice of the overall pie.
Thanks @ned for responding. I’m looking forward to what is going to be done to address the economic issues with Steem. Because besides these economic issues, I absolutely love Steemit and the Steem ecosystem.
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1I am not sure why you would want to change anything with the witness rewards. This reward is included in the approx 10% yearly inflation, it is not the cause of the price going down.
2 Why would you want to shorten lock time period while keeping the same inflation rate, this is going to be even worse.
This is already how the system works
5% of what? new created coins? why would you want to give SP holder an extra incentives? The system was designed to reward SP holder with curation rewards, the incentive is there already.
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The fact that there is so few responses to such an important issue proves my point that locking people’s money doesn’t make them more involved or care more about the platform . What makes people involved,excited and invested long term is the viability of the project long term and a sound investment proposition. It’s unfortunate but currently steem has neither.
I don’t know why founders are not answering these threads but the silence is not helping the issue.I hope that at least witnesses understands that their stash is soon going to be worthless and that they should definitely fork to remove this unnecessary inflation.
I also hope that they understand that this hyper inflation is responsible for the ever decreasing rewards, the current system is basically designed to kill itself. The inflation works against the growth of this platform ( price increase), even if there is suddenly more demand you will always have this wall that will send the price back down ( many have already powered down in anticipation to the next rise)
The difference between steem and bitcoin is that bitcoin can handle more users just fine without the price increasing but steemit can’t. The price of steem needs to increase to pay for all new bloggers, which is why steemit should have been designed to increase the price per steem, but it is design to decrease it.
People usually don’t like change so I’m not really surprised by the lack of answers, however I would have expected more support from something that could save the ship from sinking and make everyone’s steem more valuable.
Dan said that he wants to put steem in as many hands as possible, why would he keep devaluing it for no reason then? Make it scarces if you want people to hold it, make people feel special when they have a big stash of it, don’t devalue the thing so much people are running to sell it like they have fire in their butt.
I have been wanting to invest in steemit from the beginning as I saw a new innovation with lots of potential. I've been watching from the sideline, trying to understand how the system works but never took the plundge because I couldn't understand the investment proposition and saw a project that was in contradiction with itself. I hope the community can turns this around.
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The lack of communication is killing them. They need marketing, and company spokespeople ASAP.
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You should check out this post: Attention Sharks - There is blood in the water. Are you ready to invest?
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I agree with you on these point. There is no need to allow 100% inflation and then combine 10 steem coins to 1 to keep the total amount smooth. The conversion is really useless and make nonsense. If you do that in real world, it is more like a totalitarian country as known as North Korea will do this kind of conversion and make the people lose there value during the game.
I think other important things should be : first of all , develop a mobile apps to allure more people into this platform; secondly, improve the user experience and let them stick with the platform.
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@bobsunday thank you for bringing out some technical solutions. I only wish people who are decision makers would be much more open in discussing solutions. I am very surprised that your post has not received more comments. I think @dan and others should speak up and ask questions or propose ideas as well. The platform is in the early stages of development so this is the time to discuss. I just don't want to steemit to have the damage of a 0.01 price for STEEM because they might not recover. I will buy in but I'm not a speculator, and I want steady slow growth not steep downward spiral.
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last I checked the price was at .17
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Hi John - I can assure you that the people in charge are thinking long and hard about how to make the platform successful, and are taking the community's suggestions into consideration. Just because they don't follow all of the suggestions does not mean they aren't listening. You might want to check out this post for an alternate perspective.
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@timcliff Thanks I am reading your post now. For me it is just basic business sense that I am after. They need to organize, and present stability as a team. Visibility, and open communication is also key. Searching for random posts on steemit is not considered open, and has zero visibility. Also I am a businessman so I come from a mindset of building, and growing business. Thank you for the link :-)
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Welcome. If you still have more questions or concerns after reading the post, just reply there and I'll do my best to address them :)
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I read somewhere that the 110% inflation is only on the first year, then becoming 55%, then 27.5%, etc. Is this not true?
This is certainly different than 110% inflation YOY.
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The inflation rate started around 300% will gradually go down to 100% at the end of the first year and then 100% every year. In 3.5 year there will be 5 billions coins or something, we are at 185 million today.
If you only create new steem at 10% per year in 3.5 year you will have around 250 million steem.
The most disturbing thing is that this insane inflation serve no purpose at all. The question you should ask yourself is not how much inflation, it's why the inflation? I'm still trying to find the answer...
The more coins is printed the less valuable each unit becomes and the higher the market cap will have to be in the future to support the same price/steem, so yeah the clock is ticking if steem doesn't want to end up like dogecoin with a worthless currency ( price/unit)
Take a look at NEM the crypotocurrency for example, it has 9 billion coins, its market cap is the same as steem but each unit is worth a lot less than steem, 0.0039$ to be exact.
So what does this mean? It means that hyper inflation is killing the price per unit and since rewards are given based on the price/unit, the more you print the more rewards are going down.
In other words, the more coins you create, the less rewards ( in term of $ value) the blockchain can issue so again my question to the founders is why would you not want a minimum inflation and more rewards instead? And how can this platform be sustainable with so much printing? ( which is completely unnecessary I might add)
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Congratulations @bobsunday! You have received a personal award!
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Congratulations @bobsunday! You received a personal award!
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Do not miss the last post from @steemitboard:
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