RE: Steem Power Interest Is Not Compound Interest!
Let me explain this another way, which will hopefully end all the confusion.
The debasement of STEEM units is 9/10ths to pre-existing STEEM POWER holders. The other 1/10th goes to new STEEM holders, not the pre-existing STEEM holders.
So if the ratio of STEEM POWER to STEEM is 9 (i.e. SP is 9/10ths of the money supply), then STEEM POWER holders have no gain in terms of the percentage of the money supply due to aforementioned debasement. If that ratio is less than 9, then STEEM POWER holders do have a gain; and if that ratio is greater than 9, then STEEM POWER holders do have a loss in terms of the percentage of the money supply due to aforementioned debasement.
It is a variable interest rate, which can even be 0% or negative, depending on the market conditions.
And that does not factor in the change in market price (and thus market capitalization) due to the debasement.
None of that changes the fact that when the interest rate is not 0%, there is a positive or negative interest rate compounding.
What is a fair criticism of my blog post, is that the effective gains in terms of percentage of the money supply, is much less than 90% APR because the ratio is probably normally closer to 9 than to 1 (or an infinitesimal).
The ~90% APR is always the case comparing the effect of the debasement on pre-existing STEEM POWER versus pre-existing STEEM holders w.r.t. to percentage of the money. However, that is rather meaningless effect, since new STEEM holders are created with 1/10th of the said debasement. Thus the constant 90% assumption of my blog post was an error. Yet also the claim of the OP of this blog that there is no compounding due to VESTS is also in error.
There is a compound interest rate, it is just variable and can even be 0% or negative at times.
Edit: and note afaics that 50% of 1/4th of the STEEM created is converted automatically to STEEM POWER as 50% of the blogging rewards. Thus this will tend to force the ratio to greater than 9 (a negative interest rate), which would mean that much of the debasement is being paid by the STEEM POWER holders.
@anonymint im pretty sure that the dilution caused by steem power rewards to bloggers is supposed to be offset somehow by part of it being paid in SBD, though im not really sure of the mechinism for that yet.
that said, im not trying to be a dick, but you really suck at making your case here, which is easy as hell to explain without bringing in the creation of steem and steem power. I have an MBA and your explanation was so bad you confused me into thinking you were wrong, when you were actually mostly correct. You could have won this argument 20 hours ago if you weren't making it needlessly complex. (see my post above for why its compound, and not simple interest)