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RE: Ned's Making $700k+ Every Week: Is the Steem Power Interest Rate Too High?
It's not interest, it's dilution prevention. The price of a single steem is expected to go down accordingly.
There's a lot new steem being created, powering up keeps your stake growing proportionally. At 90% total powered up (or VESTed, to make the connection to @bacchist's comment), there's no dilution for those who powered up. We're at 97% right now, so there's a lot already.
@pharesim You stole the words right out my mouth but used more intelligent terms:) Great Rebuttal! The steem will drop.
Thanks so much! I keep using the word "interest" because I'm thinking in terms of X over time becomes X + Y at some rate (which also changes over time), but I see it's a more intricate dance than that.
I think I understand now that the dilution should drive the prices down a bit and bring things back to equilibrium. Thank you!
It's interest in the sense that quantity of STEEM you have increases over time in proportion to the amount you're holding. That does occur with both STEEM and SP... But it is not compound interest, which is what we normally think of, where at some point the interest accumulated is added to the principal.
Yeah, that's a great way to phrase it. Previously, I wasn't thinking in terms of VESTS which don't change, even though your Steem Power balance is going up.
Right. At 90% powered up, the growth of the money supply does not outpace the inflation of the vested STEEM. But with such a high % powered up, the money supply is increasing at a faster rate than even the inflation (aka interest rate) can compensate for.
hi @pharesim, please check my latest post out. I wrote it to you and the other whales. Maybe you will agree with it :)
https://steemit.com/steemit/@steemitpolitics/6rqxnc-to-the-whales-get-your-head-out-of-your-ass-and-vote-good-content-up-you-are-harming-steemit
I almost flagged this since it doesn't really relate to the conversation going on here. There are probably nicer (and more effective) ways to get people's attention and support than telling them they have their heads up their asses. These are some smart people. They want this thing to succeed also.
@lukestokes, sorry for posting this here. I just think that this whole thing goes into the false direction and so i want to use all possible ways to get more attention for it. But you are basically right, i wont post this again :)
@pharesim, thank you very much for the up vote :)
Understandable. I'm glad you got the attention you're looking for, but I'm also hopeful we can improve things respectfully going forward. I don't want others to seek rewards by badgering those who have influence. That, to me, would also be a false direction.
Great post and I have been trying to do the math on this stuff too. You are A LOT further along than I am. I guess if Snapchat is "worth a Billion" than I'm perfectly ok with @Ned making $700,000K / week. I wish I was that talented!