Steem Inflation : A Tool for Efficient Creation and Effective Redistribution of Wealth
We have heard our elders saying " we could eat full stomach for 5 paisa when we were students which would be approximately 50-60 years before". And now we have to pay 500 Rupees to have decent food for one person. I myself could travel in bus from my village to the district center (27 Km) for 2 Rupee 30 years back which now costs 38 Rupees - a 19 times increase.
And this story is not only in India but all around the world - you hear same type of story whenever you happen to talk to elders of society or look back at your own life.
This is clear that the purchasing power of any fiat currency, issued by any government across world, has consistently gone down. And this decrease in purchasing power of fiat currencies is called inflation.
The question is - who makes them inflationary? and why do they do it?
The answer to first question is very simple - the governments of the day make them inflationary by printing more currency than required.
The answer to second question is bit lengthy. In society there are workers, managers, planners, leaders, preachers, and non-contributors. Except the non-contributors all other produce or help produce something of use for society. If only contributors were to be the consumers then, although inflation still will be needed - I will explain that later, but will be much lower. And this I call good inflation.
But non-contributors are also consumers. Either society has to provide them in the form of state grants or they will steal by whatever means. Now governments for whatever reason if start giving in too much to non-contributors either by choice or by compulsion then it is very easy to expect that inflation will rise much higher. And this I call bad inflation.
It is not difficult to relate that all poorly governed countries had, have, or will have in future bad inflation. Saudi Arabia is case, for will have in future, as it is a society of least contributors and most are living om grants from government. As the Oil demand in world collapses due to use of alternate and renewable energy -the Saudi’s will see hyperinflation. It is not something that has not happened in history. Many great economies have collapsed for this simple reason.
Another example is Reservation policy of India - by which hard earned resources by capable people are being spent on incapable and non productive people of society and at the same time opportunities are being deprived to capable people to contribute for the development of society. Please watch below video - how India exporting its talent to elsewhere
Let's move on from bad inflation discussion as it is not the main topic of discussion for this post. It is actually the good inflation that I am going to discuss and how Steem Inflation is good inflation. Tune in now to the article.
We now know that the value of the unit currency decreases while supply of currency increases with time due to inflation. Therefore, it is in the interest of all those who have their wealth in the said currency to grab (yes grab) more from additional supply of currency. And to grab more the participants have to take part in some activity which is linked to reward mechanism of the society. It is obvious that activities that innovate or help innovate are rewarded more than those that just cater to current needs. This help to create and redistribute the wealth in such a way that those who secure and improve the future of society will become wealthier than those who are just helping to meet current needs. Therefore, it is the activity, that you chose to engage in , that dictates whether you will become wealthier or poorer with time. Look at below image to get this point that shows how wealth of companies enraged in new tech increasing much faster than those involved in age old activity like OIL. In 2016 none of the company that dominated in 2001 is in Top 5.
So if you don't do anything then for sure you will become poorer with time irrespective of the size of your current wealth. And which activity you chose to participate in will dictate your relative growth of wealth over time.
In Bhagwat Gita - we have most famous teaching from Krishna. And that is:
कर्मण्येवाधिकारस्ते मा फलेषु कदाचन । मा कर्मफलहेतुर्भुर्मा ते संगोऽस्त्वकर्मणि ॥
In English its meaning is written below:
You have a right to perform your prescribed duty, but you are not entitled to the fruits of action. Never consider yourself to be the cause of the results of your activities, and never be attached to not doing your duty. - Bhagavad Gita, Chapter II, Verse 47
In the vedio below it is very nicely explained by Krishna to Arjuna:
The highlighted text above is very important. Don't engage in an activity expecting returns instead do something that makes you happy and satisfies your inner self.
And I am sure we all know how Nike uses the same concept
How Steem Inflation Fits in all this and binds us all into it ??
It is this power of good inflation and selection of activity you chose to engage in, as explained above, that has been used in Steem blockchain to motivate users to contribute for the growth of Steem and so of the users - as we all collectively own Steem blockchain. The rewards of steem come from gradually decreasing inflation from 10%-0.95%. This reward pool is then distributed among those who do some activity on the blockchain as per below arrangement:
"Of the supply of new tokens created by the Steem blockchain every year, 75% of those tokens compose the “rewards pool” which are distributed to content creators and content curators. 15% are distributed to vested token holders, and 10% are distributed to Witnesses, the block producers cooperating inside Steem’s DPoS consensus protocol."
"75% rewards are distributed among content creators and curators in the ratio of 75% and 25% respectively"
Now YOU can decide which activities of Steem blockchain you are equipped/inclined/motivated to participate in. Accordingly you will earn rewards.
Activities Directly affect Your Rewards on Steem Blockchain
- If you are passive investor -then you earn 15%.
- If you are witness then you earn 10%.
- if you are curators then you get 25% of 75% reward pool
- If you are content creator then you earn 75% of 75% reward pool
- Develop apps on steem blockchain like dLive, SteemPress , busy.org etc,
- Promote steem blockchain like @jerrybanfield
- If you are investor bring investors from your network
- if you are author - get more authors to register
- If you are good at identifying good and original content then invite other curators
- Write motivating posts so that others become more active develop positive outlook
- If you know exchanges then get steem listed on new exchanges
- And be ready to launch your SMTs as soon as it is made possible on the blockchain
- Help police bad behaviour like @arcange who lists out any scammer on the blockchain by simply resteeming his posts
- Ask difficult and uncomfortable questions to those who are in leading position on the blockchain
"Either invest money or invest time"And remember anybody who invest money has actually invested his time somewhere and earned that money which is invested here. So if u can not invest money then be ready to invest your time in learning required skills to excel here. But please don’t complain about somebody is earning so and so. You too can if you care to.
Good Luck & All the Best
Read my best post so far my story of one year on steem and learnings