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RE: Synereo versus Steemit (engl)

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Synereo versus Steemit (engl)

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ntomaino (63) in steemit • 8 years ago (edited)

The fixed supply is interesting ($1.6B, released over time).

One of the big flaws of Steem that I can't reconcile from an investor perspective is the infinitely inflationary nature of the tokens. An equity investor would never invest in a company thats shares would be infinitely dilutable, and that's what you're doing when you invest in Steem power.

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8 years ago by ntomaino (63)

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officialfuzzy (75) · 8 years ago

An equity investor would never invest in a company thats shares would be infinitely dilutable, and that's what you're doing when you invest in Steem power.

This is actually wrong. Let me give you some facts to help clarify.

Steem does infinitely inflate supply (against steem holders...SP holders are 90% protected *if they do not curate or earn any value. Then once every 3 years it does a 10:1 reverse split. Meaning if you hold Steempower at that time, the number you have will decrease significantly, but their individual value will increase significantly as the supply is cut by 90% (in favor of those holding steempower).

Hope this helps guys :)

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ntomaino (63) · 8 years ago

This is not wrong. The reverse split is just an accounting mechanism (the number of your SP goes down, the price goes up, and the total value stays the same).

New Steem power is literally created every day forever to reward creators. That is called infinite dilution if you think about SP as equity.

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officialfuzzy (75) · 8 years ago (edited)

you are inflated at approximately the same rate with steem as you are by holding bitcoin...
Do you hold bitcoin?

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fabio (67) · 8 years ago

Still trying to get my own head around that exact subject...is the amount of valuable content humans can produce limited?

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ntomaino (63) · 8 years ago

No. But like miners in BTC once the 21M is reached, creators could still earn via other means in the network (e.g. transaction fees).

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fintekneeks (52) · 8 years ago (edited)

@ntomaino The inflation of the Steem system works out like this:

Steem 100% inflation a year (that's massive)
SteemPower 5% inflation a year, only if you continue producing content. What happens if you have a stroke and are disabled for two years? Yes, this happened to a close friend of mine and it's a reminder that some people need a currency that holds value while they recover. SteemPower wouldn't protect them.
SteemDollars subject to the Fed's inflation rate. Let me know how trusting them works out.

Ultimately, most people don't get why inflation matters because they are told by mainstream media inflation is good. Steem will be a great lesson for many people who will learn why inflation does matter. For this reason though, Synereo does have a better model for Venture Capitalists and people who grasp basic economics. It will be interesting to see how well it does and how it handles challenges as they arise.

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