Steem experiment: Burn post #528

The last line is speculative. There are many factors contributing to price changes so I don't think a blanket statement can be made. I would instead say that it could increase the price of Steem, or from another perspective, reduce the decline in the price of Steem.

IMO, it depends whether the rewards (payouts) would otherwise contribute successfully to increasing the value of Steem, or if they are more often being extracted by self-voting, vote-trading, vote buying, etc. which enriches individuals at the expense of Steem stakeholders/investors.

I'm happy to, and do, vote for payouts which I see as contributing to increasing the value of Steem. The rest I consider to be somewhere between wasteful and scams which are actively harmful to Steem, and therefore often prefer to see more burning.

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marki99 (54) · 5 years ago

Yes, of course a positive ROI can be obtained from inflation (hence the SPS). I was talking from a supply/demand point of view.

Market cap remains the same so less coins means higher price. Sure this doesn’t happen right away, as markets are not perfectly efficient. But steem does become more scarce, or in this case inflation is reduced.

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smooth (70) · 5 years ago

Market cap remains the same only if demand does not increase. If payouts are made to (sufficiently) value-adding posts then it should increase demand more than enough to offset the dilutive effect of more coins. Voting for burnpost is expressing a view that the weighted average of other posts is not value adding.

I was mostly agreeing with you BTW. I do personally vote for burnpost so my opinion is that fewer coins -> higher price under current conditions, but I just wanted to acknowledge this is opinion not objective fact.

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marki99 (54) · 5 years ago

I agree with you too, however you can never be 100% sure that demand will increase when upvoting someone. Even if he has the best of intentions and we truly believe in him and his plan to create value, we can still be wrong.

What we have to do is consider what happens when demand remains the same, because we don't how demand will vary. It is possible for Steem to become worse from a fundamental point of view but for demand to increase because the market has constantly proven to be irrational.

That's why I think that burning is the only 'objective' way to increase the price. Other methods can be argued and disagreed on, for example, not everyone votes for the same proposals on the SPS.