HF19 YAAAAY!!! ...dial it back a bit, chief.
It has been a fun morning, yes? Just look how much everybody is freaking out!
Are these enormous payouts here to stay?
To be terse: no. Then why are they so high right now? Well, there are three possible reasons, and each reason has its consequences.
Reason number 1
(I pulled this from this comment I made to @dragosroua.):
It used to be that every vote spent 0.5% of your available voting power; now, every vote spends 2% of your voting power. So when the hard fork hit, a huge massive flood of voting power hit the system and allocated a disproportionate share of rewards to posts that got votes after the hard fork. But the rate that peoples' voting power recharges is still the same as it always was, so within a few days everybody's voting power will hit a new equilibrium where their outgoing voting power is about the same as it always has been.
Get it? Your votes are more powerful now than before, but you don't get more voting power. All that's really happened is that now, you have the option to spend more of the voting power that you have.
Thus, Reason #1 is self-defeating. It can't last.
Reason number 2
Linear rewards! This is what the "equality" in HF19's propaganda was all about. It used to be that it took a lot to get a post's payout "off the ground," but that the more payout a post had, the more each additional vote helped it. Now that's all gone. Now the amount a vote changes a post's payout is the same, regardless of which post you're voting for.
You can test this yourself! Post a comment to my article, upvote it, and write down how much the payout increased. Then refresh the page, upvote my article, and note how much the payout of my article increased. The benefit should be the same between your reply and my post even though my post started with lots more stake voting for it than your reply.
It's a little bit hard to estimate, but my belief is that this has almost no bearing on the huge payouts we're seeing today. The big effect of this will actually be much more subtle, and will probably decrease post payouts in the long run because now minnows can get paid thousands of times more by voting on their own comments than they used to. Mark my words: self-voting is going to be the next big bad perceived "problem" with Steemit.
Reason number 3
Draining reward pool! I don't know if this is actually happening or not, I haven't dug through the source code to see. But it's possible that the huge flood of voting power has actually started pulling huge amounts of Steem out of the reward pool. I need a dev to comment on this because I might be making a big deal about nothing, but if this is happening, we're all going to be very sad and confused in about a week when we have to start paying back all of these massive payouts.
The problem here is that the flow of Steem into the reward pool hasn't increased, but maybe the flow of Steem out of the reward pool has temporarily gone up. Again, I need a dev comment here.
Anyway, enjoy your temporary large payouts, enjoy your temporary powerful votes, and keep on Steeming! All images from Pixabay.
Why would this make sense?
It would be a very simple way to implement the reward pool. Swap some of your vote from your comment to my post and I'll explain... ;)
Done ;)
Heh. Big disclaimer: I have no idea if this is how the reward pool is implemented, but it would totally fit with some of the language they've used to explain previous hard forks.
First, the reward pool fills at a fixed rate - each block, so much Steem drips into the pool; the total amount in the reward pool is
total_reward_pool.Second, every time a post pays out, it sucks some Steem out of the reward pool. How much Steem should it suck out? Well, we know how many
rsharesthe post has, and we know thetotal_rsharesallocated to all posts, so we could give the post a share of the reward pool that's proportional to its share of the total rshares. That is, we'd come up with a proportionality constantalphaand the post's reward would be given byrshares/total_rshares * total_reward_pool * alphaWe could choose
alphato be fairly small so that there aren't big fluctuations in the amount of rewards coming out. This would be a very clean, very simple implementation of posting rewards. As long as nothing changed too rapidly, it would give posts a nice even payout. But a step change would cause problems! We saw such a step change with HF18, where (in my imaginary implementation) they decreasedalphafrom 1/7 to 1/30.But if this is how the pool is implemented, then HF19 is draining the pool much faster than normal. This is because we aren't directly controlling how much Steem leaves the pool each day; we're just letting it equilibrate wherever it "wants." By quadrupling the amount of
rshareseach post gets, this would cause each post to pull more out of the pool in absolute terms.Long-term, it's fine. The pool would reach a new equilibrium and average payouts would go back to normal. But short term, we'd see a huge boost in payouts followed by a huge decline.
Great insight @biophil. Thanks for your technical knowledge into this. From a non tech point of view this makes sense and I think you were on the money! Will follow you because of this post.
Question: if the payout will remain the same at the end, then what is the point of the hardfork19? Now that my vote is worth more, I will use my votes more carefully, I do hope that this hardfork will allow me to get more curation rewards, because before, even if I upvoted a post at 31 mins of being posted, whales and dolphins get all or most of the reward 😩
The payouts won't be exactly what they were before. The main reason for the HF is that it rebalances the influence a little bit more towards small users.
Ok, at least it means that a little red fish like me, gets a bigger vote, that works for me 😊
@jrcornel what would be your response to this? You predicted such calculations by biophil :-)
Great breakdown... people need to think things through before hoping and wishing that they just found a money tree lol
Thanks for the insight, although, i'm still a bit confused on how the system works. Thank you for sharing this information.
No worries, it's pretty confusing and there are lots of bits I don't understand either.
Good luck with that. I hope it happens because I was wondering about this same thing. If it does turn out to be the case, there are going to be a lot of sad, sad "Steemians" in about 8 days.
It would be great if we just discovered a golden goose, but I'm of the opinion that we did not and that we ought to be a little careful about how awesome everything appears to be. We need to see what the consequences will be once things calm down. Reality might end up hitting us very abruptly.
Yeah. I think easy money is usually self-defeating.
just messing around a bit.
and again, why not
Thanks alot for your tips....
Nice post that sheds some light on the new fork.
I'm starting to see some negative effects of HF19, my feed is now getting spammed with new posts from the people I follow! This is making me harder to find the really good posts.
I think you may be onto something here with your analysis of HF19, interesting points!
ahhh... I wondered WTF was going on this morning when I automatically got $60 in rewards from my own first vote on my own post.
guess things starting to level out - just made another and it was "only $28."
still really don't understand alot of these details with the algorithms, though appreciate your diligence in keeping on top and helping simplify through posts like these...
(and happy to throw an extra $27 worth of rewards on this post for you with a single vote. :-) )
Here are a few more explanations less artfully described . At the bottom.
https://steemit.com/steemit/@dennygalindo/hf19-will-kick-off-a-time-like-july-august-2016-2017620t18565446z