Do we really have an inflation on steem ? ! - Day 303 !
Last time when I participated in the show of @pennsif I heard people talking about the inflation in steem blockchain.
Referring to wikipedia ''inflation'' is : a sustained increase in the general price level of goods and services in an economy over a period of time.
If we consider steem as good or service, I don't think that the price of steem is down because of the inflation.
I think the price of steem is related to it's capitalisation and to bitcoin price.
As an economist I believe that the capitalisation and the inflation are not related at all.
The more money investers will put in steem the higher the price will be.
I think the distribution of the pool reward can't affect the price.
I'm recording this video and writing this post to understand if I'm right or not.
I want to be sure that steem is really the best currecy like I was always thinking.
Can you prove me please that we really have an inflation on steem ?
I hope to get an answer from @blocktrades . I think all steem community needs to know what kind of inflation we have here. For some people it's hard to understand such complex terms. Is there a way to explain that in a simple language ?
Even if we have an inflation. Should we focus more in bringing more investors on steem, or in forking it and making so many proposals about how to change everything on it ?
I think a lot of people are confused now. Because I always motivate people to stay in steem and tell them about all the benifits of this blockchain and I want to have a clear answer to explain everything to those who are asking.
I hope also that : @theycallmedan or @acidyo or @aggroed or @netuoso or @therealwolf or any steemians to explain to me or to people everything. If not in replies, at least in a post or a video. Please tag me in that case.
Some people are afraid to ask such questions to not be flagged, but I'm not taking any side yet. I want to understand how things are working and this is the most important for me. I'm almost 2 years on steem blockchain, never powering down and doing my best to promote steem on the web.
Or maybe I will have a good explanation from people I know like : @cryptospa , @teamhumble , @nathanmars or @ivansnz.
I really hope that all the problems will be fixed and steem will go to the moon again.
Thanks for reading, watching and understanding.
You are always welcome to join our community @dcooperation. ☺
Here is the link to our discord server : https://discord.gg/UMAMYkP
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If you want to know the inflation rate of steem go to coinmarketcap.
for example, on 1/1/2018 the market cap of steem was $911'843'681 and the price per steem was $$3.70. on 31/12/18 the market cap was $306'543'810, and the price of steem was $0.2727. Do the maths yourselves, but in my brain that makes an inflation rate of 24.4% p.a Unless you can earn at least that much by leasing coins, you are going backwards.
Why most people are saying that we have only 8% inflation ? But the amount is not that important, but how to solve it is the most important. Do you think that creators should pay a tax to reduce the inflations ? or it's related somehow to big players ?
No inflation = no reward poll, around 50000 new steem is printed each day. The actual inflation rate on steem is around 8.5% at the moment.
interesting lol So the inflation will always be and it's impossible to eliminate it ?
Not in the current state, inflation is a false believe of growth.
How you will pay people in the first place?
so, what will happen if the inflation will be 100% for example, is it possible ? or what do you think we have to do to reduce it ?
They can adjust the inflation by a hard fork. If you put it at 100%, the price of Steem will loss value drastically. The inflation is set to decrease each year by .5% so in the current state we have an healthy economic ecosystem.
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Do you think that they should take a part of the reward of creators or just donations will help them achieve that ?
I totally disagree that they take 20% of the reward pool from the author part. This will create more dead fish and people to leave the platform.
I am for the donation part and others way to finance it like selling stuff!
It is already really hard to make money here and like you say is better to see it as an investment! ;)
Inflation is an increase in supply (money,steem, etc.) not an increase in price.
An increase in price is an effect of inflation and not inflation itself
Wiki info is a fake definition
ok, but do you think that we have inflation on steem ? Do you think we should burn those coins somehow ? or to create less ? Or what's the solution if we really have an inflation ?
This website is relating the inflation with the price and a lot of them as well : https://www.thestreet.com/personal-finance/education/what-is-inflation-14695699
Can you also give me a source to read about the inflation more ?
It's more complex than that.
The characteristics of money are: durability, portability, divisibility, uniformity, limited supply, and acceptability.
There is indeed inflation on steem because the supply is not limited. In essence it's a zero sum game because they pay out user rewards by diluting all users. But not everyone profits as much, the key is to get more upvotes than the inflation. So the ones that get screwed the most are inactive users. Because there is inflation and they have no upvotes or curation rewards to counter that.
The problem is that no other system works. They tried another system where users would finance upvotes themselves but then people get greedy and don't upvote as much. (It's easier to spend someone else money or the money from the community than your own money where you worked hard for.)
In essence the problem is that steem doesn't make money. So how can it pay out money to reward users? Well it can't, it's only an illusion. A solution would be for example by showing advertisements on this platform and pay out user rewards with that income.
Also, you have to understand that the price of steem is not based just on how much inflation there is. The price of steem is based on how much market participants are willing to give for this cryptocurrency. (=speculation)
That's why we have seen a boom and bust in 2017-2018 and the correlations are so high. People just bought everything in the hopes of becoming a millionaire. Then at a certain point people start to cash in and it crashes. It doesn't make sense when you try to rationalise it but that's because financial markets are always distorted. It's actually pretty predictable when you studied finance. Markets always go through the same type of cycles and make the same type of patterns because people react in a certain way to events. (History repeats itself)
A financial market is made up of all the market participants. In crypto most traders are just mom and pop investors who don't have a clue how finance works. A lot of people buy crypto because it goes up and they sell because it goes down. And even when you do know what you are doing it's still hard because it's almost impossible to value cryptocurrencies. It's not like with stocks that you can use some discounted cashflow models to calculate how much a stock should be worth when theoretically being fairly priced.
Is steem a good investment? I would answer yes. Because right now the sentiment among crypto investors is very bad. The bear market wont last forever. When prices go up people get exited again and use steem more. The reason why we got hit so hard as a community is because of the bear market, it's not only steem, engagement is low on all crypto communities.
Steem has not much users currently so there is still a lot of growth. When there is enough growth the inflation doesn't hurt as much. I don't see steem go anywhere in the next few years. But there are some fundamental issues that need to be fixed.
Both are really cool comments. Thanks a lot for nailing it. It's good that you are still positive about steem. I just hope that they will not cut that 20% from the rewards of creators, but to solve the problem somehow else. Even with the curent price and everything happening, a lot are leaving the platform, I think if they cut the rewards, even more people will leave. Most people who are creating here, are creating for hoping steem will grow. I hope you are right and steem will rise again and everyone will be happy.
These are the top search results for cryptocurrency related keywords in google. When you put this against a chart of the crypto prices, you would notice that it's >80% correlated.
Why? Because people are chasing the prices.
This is the alexa rank from steemit: https://www.alexa.com/siteinfo/steemit.com
When you analyse al this the conclusion is that people don't use steemit that often because of the bear market.
The reason why i'm still bullish is that there is no good alternative. I have seen some ico's which do something similar like steem but it's a pretty big ghost town.
I don't know the exact numbers (look it up on coinmarketcap) but steem is one of the top 20 most used blockchains. It's not easy to take the network effect (https://steemit.com/business/@niel96/pknk8cmqq) away. And other "social media crypto projects" will have the same monetization problems.
The key is innovation.
Steemit needs to work on improving the infrastructure and solve some of the fundamental issues.
The community needs to invent some killer dapps. I think the gaming aspect is something which can work out well. Steem monsters and drugwars are good examples. There is a lot you could do with steem because you can leverage the community.
It's not a bad idea at all but there are some fundamental issues. But what cryptocurrency is perfect? Most have scaling issues which steem doesn't really have. It's one of the faster blockchains. The problem is more that the economic model is "broken".
The fact that a lot of users left doesn't scare me because they are opportunity chasers. They will come back when we already gone up much.
Thanks a lot for all this comments. You motivated me about steem even more. Happy to meet you here.
The inflation on the STEEM blockchain is Author Rewards. Every year 100% of the coins are created over the course of the year. It is distributed for Curation, Content Creation, Mining. That is my understanding. This proposal is a Tax on the steem blockchain. This will cause a negative Fork. Personally I believe as @exyle does, there is no real use case for the steem alliance redistribution of Author Rewards. Developers are already working without this platform wide Tax.
Yeah, I already pay big taxes for the country I live in. Paying taxes to steem as well will be strange. We already have a lot of people leaving steem. I think if we make those who are staying pay taxes, we will lose even more people. I hope everything will stay as usual and they will not make those who are staying leave as well. It's hard to be always positive being a minnow or a dolphin. But, I'm still positive and I hope everything will be ok and they will do it the right way ... .
hi @clixmoney , i agree with you ! it's better someone to explain it in a simple way , so everyone can understand better ,
i like your videos !
Thanks a lot. I hope someone will do that.
I think wikipedia's definition is a little off. Inflation, strictly speaking, is an increase in the money supply which steem certainly has by design. Inflation often leads to an increase in prices but as long as demand for steem itself matches the increase in supply then this won't happen.
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I see, but I don't think that the reward pool is cosing the low price of steem. I think low capitalization is causing the low price of steem. If more investors will invest in steem, the price will go automatically higher even with the supply that we have or we will have.
interesting questions and thoughts clix! i made a video response to expose my thoughts!
Thanks a lot.
I would also like to hear from someone in plain language, what it all means). Preferably with examples.
Of course, we are on the blockchain and everything have to be clear.
Hey,
I would like to invite you to @APPICS as one of the first APPICS app testers!
APPICS is a new blockchain based social media application launching in Q2 this year. Similar to Steemit, users can earn cryptocurrency tokens for posting creative content, but different to Steemit, APPICS will be focusing on photos or videos instead of blogposts. With the APPICS app we give users the power to monetize time and creativity they spend on social media.
The app is currently in beta mode, running on the STEEM blockchain, so you can easily log in with your username and your private posting key as your password.
If you´re interested in joining APPICS, please send us an email at [email protected]
Feel free to visit our website Appics.com for further information.
I‘m looking forward to hear from you!
Best wishes,
Lisa