On the 13 Weeks Steem Power Down Period: Why the Status quo Should Remain
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.
Even as far back as three years ago, @beanz brilliantly captured the danger ahead when she wrote:
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.
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Upvoted and resteemed @gandhibaba :)
Thanks and cheers to project hope.
It is both a difficult decision to take, and a very important one too. Actually, freezing funds allows neither helping or diminishing the market. Nobody can make liquid steem to get things quickly better by creating volume if an exchange sees steem as too diminished.
I am not an expert, but I think it's why we can neither follow bear of bull markets and why the price is "rather stable" at 0.14-0.12 cents.
At least I'm guessing it will be so until someone finds a better solution.
One possible way to personally "SHORTEN" the withdrawal time is to initiate a Power Down of a larger amount than you ultimately wish to withdraw. (That is, of course, if you have a bit of excess SP in the first place.)
Say, if you have 2,000 SP, but want to power down 1,000. What you do is initiate a 2,000-SP power down. Within 6-7 weeks, you will have powered down your desired 1,000.
Then, just cancel the power down, and it will stop. Mission accomplished.
I never considered this fine and clever tips. Thanks for sharing it, as you rightly say - this only concerns those with large stake. Also, thanks for stopping by and do not dial the power down button now. Cheers!
You could make a post about this tactic. Short, concise, and quite helpful.
Very true but that might hammer your rep.
True, it might, but there's no reason that it should. As long as this strategy is not overused or abused, I don't see any harm in employing it when and if necessary.
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STOPTo support your work, I also upvoted your post!
Well put. This is the best telling of Steemit's history in this regard that I have read. I am still shocked that I voted on your post and it actually fell 10 cents.
It is very difficult to decide on the power down period as a lot of people are short term investors while others are long term investors. Both the 13 weeks and the 104 weeks have its advantages and disadvantages but I will still go with the 13 weeks.
I absolutely agree with you on this. Both have their merits, the 104 weeks and the 13 weeks period. Thanks for stopping by.
Greetings @gandhibaba, what you say in your post is very interesting, personally unaware that some time ago the payment period was so high.
As you say, wanting to make a quicker payment can end up damaging part of the "ecosystem" (to say the least) to the steem, which as you said would give us lower prices.
Of course everything depends on the point at which you see the issue, you have to keep in mind that maybe all those people who are doing power down do it to need the money, at least so I've seen that many Venezuelan colleagues are in those.
Personally I think that should not touch more variance in the payment term, but if you open a second option, something like a kind of advance payment, I explain, put that by X or Y circumstance you need the money, if you open the option that for example you are charged not 25/30% of the withdrawal to make the transaction faster may think many, hear this would only work for extreme circumstances but not to withdraw daily.
Thank you for reading my comment, have a good day, evening or night.✌️