I'm new to Steem and I'm overall very impressed and excited. I want to share with you something that I thought was an issue regarding Steem doubling every 1 year. Once I heard that Steem doubled each year, i wondered if Steem could continue to hold intrinsic value over the years unless tons of new users kept joining and staying active, effectively propping up the diluted units of Steem with valuable economic content from the outside and with new content. But this is actually a fallacy. According to the Steem White Paper:
"The increase in the supply of STEEM is mostly an accounting artifact created by the desire to
avoid charging negative interest rates on liquid STEEM. Negative interest rates would
complicate the lives of exchanges which would have to adjust user balances to account for
the negative rate of return of STEEM held on deposit. Mirroring the blockchain logic exactly
would be error prone and complicate integration and adoption. Therefore, STEEM has
chosen to never charge someone’s account, but instead to increase supply. This achieves a
similar economic result without forcing everyone accepting STEEM deposits to implement
negative interest rates on their internal ledger." (Page 38 Steem White Paper)
...also
"In order to compensate for the ever increasing precision, the STEEM network performs a
10:1 “reverse split” every 32,000,000 blocks (about 3 years). At this point in time all balances
of STEEM are divided by 10 and all prices are multiplied by 10. Cryptocurrency exchanges
will have to suspend trading around this time and update the account balances and price
history to reflect the “reverse split” before resuming trading."
(Page 39 Steem White Paper)
(https://steem.io/SteemWhitePaper.pdf)
This means that Steem is in a continuous expansion and contraction. Basically there will be rounding errors when the reverse split brings the amount of Steem created back down to the level it was roughly 3.3 ( ln 10 / ln 2) yars earlier. But these errors will be in the fractional amounts like 0.001 Steem, and that has insignificant economic value for most everybody.
Please comment if I missed anything important, and I'll correct my post. Otherwise, I hope this was accurate and I was able to clarify any problems users had for those who were worried about the value of Steem due to inflation. This is virtually not a problem, and the Steem developers took this into account when they made this social-crypto-currency.