My grasp of economics is far better than my grasp of cryptocurrencies. Is voting somehow necessary for cryptocurrencies? Or did Steemit just decide that voting would somehow add value to the process?
From the purely economic perspective, here's how Steemit should work. Say I put $5 dollars into my digital wallet. Then I'd decide exactly how many pennies to spend on your article. If I decide to spend 25 pennies on your article, then a quarter would be automatically withdrawn from my digital wallet and deposited into yours. The value of your article would increase by a quarter. We'd be able to sort articles by their value.
With this system, writers are rewarded for producing valuable articles.
With Steemit's current system... writers are rewarded for producing popular articles. As far as I can tell, the more votes an article receives, the more money it gets. The logical but unfortunate result is that there's a surplus of superficial articles and a shortage of substantial articles.
Hi there and welcome. It looks like you have just arrived judging by the 25 Rep score.
You are right in principle but the system is "stake-weighted" and the people who started off this time last year managed to 'mine' an awful lot of the stake available amongst very few people.
The rewards curve is, in effect, an exponential curve as the relative power increases as one's ownership of Steem Power increases, creating a scenario whereby very few hold the power and this has been shared amongst them selves to the extent that 98% of all rewards have gone to less than 4% of all the accounts on the platform.
As an economist, you would see that decentralisation is necessary. It is in fact going the other way or static at best.
Following you. Ask anything about the platform should you need anything.
Namaste.
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Thanks for the welcome but I've been here for 7 months. Initially I participated a decent amount but the quality of the interactions wasn't high enough for me to stick around.
Medium.com just launched a subscription option. You can pay $5 dollars a month and receive some perks. Interestingly enough, all the revenue will be routed to the most valuable writers. Unfortunately, the value of a writer is determined by how many "votes" (recommendations) their stories receive. So I posted this story... Medium Is The New Steemit.
I got curious and clicked my bookmark for Steemit's recent economic articles and found yours. It was pretty substantial so figured I'd try and pick your brain on the topic.
To be honest I don't quite grasp the economic necessity of "mining" a "stake". It doesn't seem to serve any real or necessary economic function. And by this I mean that it doesn't seem to facilitate mutually beneficial trades.
More often than not there is this incredible disconnect between technology and economics. Whoever founded Steemit probably has a great grasp of technology but they definitely have a terrible grasp of economics. Which is to be somewhat expected given that society is based on a division of labor. However, it's exceedingly unfortunate that the founders of Steemit didn't seek the advice of a moderately decent economist.
Then again, you shouldn't really need to be a moderately decent economist to understand how and why a flea market works. It's just a central place for buyers and sellers to make mutually beneficial exchanges. Steemit should simply be a central place for readers and writers to make mutually beneficial exchanges. Instead, it's mostly rigmarole. It's not easy or straightforward to use money to communicate our valuation of articles.
My new friend Markus is super into cryptocurrencies (CCs). He's designing a virtual community based on a CC and shared his design ideas with me. Unsurprisingly, there was also the weird mix of voting (democracy) and spending (markets). I shared my thoughts on how voting should be entirely replaced with spending. He seemed super receptive. In any case, it's only a matter of time before a CC community is created that's based on solid economics. I just wish that it will happen sooner rather than later. If you happen to run across such a community, or know of people interested in developing a new community, please let me know!
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