RE: If STEEM Reaches even 25% of Reddit's Market Valuation...
The numbers are a little confused by the overall analysis is valid. There will be about 100% per year Steem inflation (that is once things reach a steady state; the first year is higher). Powered up Steem is inflation-protected which means you get more Steem to offset the effect of inflation (with perfect inflation protection, if inflation is 100% your Steem Power would also increase 100%).
What this means is that in 5 years there will be much, much more than 80 million Steem, it will be more like billions (though I think after 3 years there is supposed to be a 1-for-10 reverse split which brings the number back down somewhat).
However, the effect from the perspective of a current (partially inflation-protected) Steem Power holder will be more like 80 million. (That is assuming the 10% SP effective inflation holds up.)
Are you sure the numbers are incorrect? I went off Bytemaster's statement that if 99% of the STEEM remains locked away (protected from inflation), inflation would not go far above 10%.
And it is also true that when someone holds their steem as steempower when the % of steem locked away is under 90%, they receive even higher "protection" to the degree that they actually earn a sort of "interest"...which would mean that from the perspective of a current steempower holder, they would end up with more than the equivalent amount.
He meant that in terms of unprotected inflation for SP holders.
Yes
You should join our hangouts smooth!
And what do you mean by "unprotected inflation"? Do you mean that when almost all steem is tied up in sp, sp holders are diluted precisely because the market is considered too saturated and people need to be incentivized to keep some steem liquid?
Oh annd btw, you never answered the questions in the main post smooth ;)
Inquiring minds want to know.what your crystal ball says!
By "unprotected inflation" I mean the extent to which SP's share of the total supply is diluted by new supply. So if >90% is locked up the SP holders experience inflation with respect to their share of the total. If <90% is locked up, the SP gain what is effectively "interest" as you said earlier.
The maximum inflationary dilution that SP holders can experience (if >99% locked up) is about 10%.
All this talk of inflation distracts from the main point you made in your post which is that the total value can certainly increase dramatically. I don't really have an opinion on how likely that is. I will say that valuation of blockchain-based system is somewhat different from a centralized web-based system, even if the two do the same thing, since the latter derives largely from advertising (or in some cases direct revenue) and the former does not.