Powering up Steem remains a matter of choice, so those who cannot take the risk should gladly enjoy their place as a speculator with their liquid Steem.
Image credit: @majes.tytyty
Following the advent of the New Steem and the juicy incentives that it gives to large SP holders, it appears that a group of Steemians calling for a faster power down period have emerged.
Those who belong to this school of thought believe that the present 13 installments (over a period of 13 weeks) that complete the power down of account is too long.
Therefore, it continues to discourage potential investors from powering up their Steem since they don't want to be trapped in a crypto market that is perpetually volatile and unpredictable.
The reformists, as I would love to call those championing this change, go on to argue that if the power down period could be completed within four weeks or less, potential investors will be motivated to power up their Steem, knowing that they could easily exit should the market sentiments turn against them.
On the surface, the reformists seem to have good intentions for Steem. However, if history were to be consulted and if the cap of critical thinking were to be worn, then it will not take long to realize that heeding to their demands will have grave consequences on the price of Steem in the long run.
Today, here we are lamenting and complaining about the falling price of Steem relative to other altcoins. But we forget to realize that apart from the bear market, a major economic change led by @ned and @dan that was implemented about three years ago laid the foundation for the crisis we see today.
Before the monumental economic change was made, it took about 104 weeks to completely power down a Steem account. However, the 104 weeks period was replaced with the 13 weeks period we now have today. And the consequences, if you ask me, have fallen nothing short of being disastrous for the price of Steem.
With all of the other drastic changes to the economics we also have this one. This can be looked at in 2 ways. In one way, it opens the doors to short term speculators which can be a positive thing. However it also brings the influence of a weekly powerdown all the way from 1/104 to 1/13. I consider this drastic adjustment to be extremely risky and a dramatic change to the original ideology behind steem power.
The 13 weeks power down period allowed massive capital flight, greatly depleting the Steem market capitalization. Those who have effortlessly amassed large amount of Steem in the formative days were able to exit with millions of dollars, slamming the door on the faces of the rest of us. In the past three years alone, Steem has dropped over 70 places in the rankings on CoinMarketCap.
Unfortunately, the call for a faster power down period is growing again. The truth is that a faster power down period than the status quo will only further crash the price of Steem because, as we have clearly seen in the past, it creates selling pressure that further crashes the price of Steem.
Even in real life, the banks pay more interest to those who run a fixed deposit account than they do to those who run a savings account. This is because fixed deposits stabilizes the lending activities of the bank when compared to the unstable funds in the savings accounts.
The same thing applies to Steem Power. Because Steem distributes incentives for holding it, the holder must be willing to sacrifice reasonable amount of time for the purpose of stability and the sustainability of the Steem blockchain. After all, an English adage says that you can't eat your cake and have it.
I fear that the reformists are clearly trying to eat their cake and still have it. Powering up Steem remains a matter of choice, so those who cannot take the risk should gladly enjoy their place as a speculator with their liquid Steem.
Until I come your way again, I wish you a full Steem ahead.