So, you want to BURN your STEEM?
LIQUIDITY and DEMAND.
Sure, I understand you (and many others) believe there is a LIQUIDITY problem (too much STEEM), BUT all that does is drive the price (value) down (which isn't necessarily a bad thing).
If a country wants to make their goods and services more attractive in the global marketplace, they devalue their money by printing more! Lowering the value of STEEM makes STEEMIAN WORK more affordable and thus more attractive in the global marketplace!
The "problem" of MICROPAYMENTS has been a difficult one for many years and I believe a low STEEM valuation actually makes MICROPAYMENTS a feasible reality!
If people could join STEEMIT and easily hire workers to write articles, advertise products and services, create computer programs and websites, and produce videos, or even just meaningful social interactions in exchange for STEEM, that would translate into REAL VALUE and a REAL (STEEM) ECONOMY.
The real potential for growth comes from GLOBAL participation. We need more participation from Venezuela, India, China, and the African and middle eastern nations! Most people around the world do hard manual labor for less that $1 USD a day! Just imagine if these people (with smartphones or computers) figured out that they could get (ad-hoc) work by participating in STEEMIT to supplement their income (perhaps doubling or tripling their current take home pay).
Here's an example that helped me understand the economics of value.
Back in 2014 I read an article about the "value" of Bitcoin that made a use-case for a $10,000.00+ USD Bitcoin valuation (the current value at the time was about $300.00 USD). The article made the compelling case that The Baltic Shipping Exchange LINK spends a lot of money exchanging currencies between different denominations. The total value of the Baltic Shipping Exchange was, at the time, roughly ten times the total MARKET CAP of Bitcoin.
They laid out a case, and pointed out that this is just one of many possible cases, that IFF The Baltic Shipping Exchange converted to 100% Bitcoin, they would save a lot of money currently lost in currency exchanges (roughly 10% or more per conversion). And as a consequence of that, the MARKET CAP of Bitcoin would grow by 10X, and consequently, the effective value of Bitcoin would grow by 10X.
The value of your currency is directly proportional to the current total number of users and the $ value (MARKET CAP) currently invested.
And as for your "STEEM POWER still earns interest" proviso, #1, it's still not in circulation, so it doesn't contribute to LIQUIDITY. And #2, it attracts investors (just like bank-deposit interest payments), which increases MARKET CAP.
AND if you really really really want to BURN STEEM, why not BURN the STEEM lost from DOWNVOTES (and below minimum payouts)?
Currently, DOWNVOTES (and below minimum payouts) boost the income of TOP EARNERS, which incentivises them to DOWNVOTE EARLY AND OFTEN (and keep minimum payouts HIGH). If it was really just about "bad content", why not just BURN DOWNVOTES (which would also primarily benefit TOP EARNERS)?
Thanks for your thoughtful response and please let me know if you have any questions.
ZOMBIEBASICTRAINING
Very nicely written @logiczombie,
You seem to have a very deep understanding of economics, much more than myself. My understanding of the ecosystem here is pretty basic in comparison, but I do not think burning is the key to driving intrinsic value. I think use case (as you mentioned with advertising of products/services), and adoption on a higher scale is what will drive our intrinsic value here.
I'm very hard pressed to see what burning a bunch of Steem will do if no new users are arriving, other than maybe give the middle class a little more of a chance to close the wealth gap, and I still don't think burning will make a huge difference in this aspect, due to the limited sharepool, and how sharepool leverage/influence works. The reward pool is still being drained with the burned Steem, so it probably doesn't do much in this aspect.
Centralized platforms don't seem to want too much chit chat of crypto platforms like this being mentioned in their environment. Here's one such example, and not the first instance I have heard of these strange "shadow bans."
Nice read, I think you raise some great points to consider here @logiczombie!
Thanks!
Burning steem decreases LIQUIDITY and this causes deflation (increasing the relative value of the remaining steem by making it more rare, which disproportionately benefits large stakeholders and top earners).
However, it does absolutely nothing to boost the DEMAND side of the equation (and may even reduce demand if outsiders think people are burning steem because it's perceived as worthless).
I wanted to see what you thought of, https://steemit.com/philosophy/@logiczombie/my-30-days-on-a-tv-game-show-part-one
I'm still working on part-two!
In order to buy and sell items IRL you must have some sort of private chat feature.
Also, vendors will inevitably dump (liquidate) their STEEM on the open market, (when selling their wares) further driving down the valuation relative to fiat.
The current major use-case for STEEM (value) is ADVERTISING.
However, it looks like the banner ads are denominated in $USD.
https://staticfiles.steemit.com/SteemitMediaKit.pdf
The big G and the big F make zillions of dollars on advertising. If STEEMIT could get just a small slice of that juicy ad money converted to STEEM, it would do wonders for the MARKET CAP.
If a major advertiser wants to drop millions of dollars of ads on STEEMIT, their best option at the moment, is to buy banner ads (which do absolutely nothing for the price of STEEM).
Also, wouldn't it be nice to be able to upvote ads that you like and get curation rewards? It seems like the "promoted" feature should be the gateway to the banner ads. The top trending "promoted" posts should rotate in the various banner ad positions.
And, you should be able to pay for "promoted" status with STEEM and not just SBD!