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RE: PRICE WILL CONTINUE DOWNWARD UNLESS WE MAKE A SIMPLE CHANGE
Really interesting concepts. I'd like to hear your expanded thoughts on:
- Lock up your Steem (Power Up) and earn 5% per year and get voting rights etc.
- Knock Power Downs from 104 payments over to two years to 4 payments over 4 weeks.
The insane inflation that steem has is completely unecessary and as bobsunday said the price will be impossible to sustain.
A fork could be done to reduce steem inflation from 300% - 100% to about 10% and steem would work perfectly fine, much better actually. This would mean that the reverse split won't even be needed,not for decades at least.
They could make the system much more attractive to investors by simply stopping printing so many coins. There is no real purpose for having so much inflation, they are shooting themselves in the foot with the insane printing.
I have discussed this with smooth and apparently the inflation is there as a psychologic incentives to buy steem power ( your balance is growing when you have steem power ). As we have seen recently this incentives does not work, people want to grow the value of their account not the number of SP and investors are not falling for this. I would also argue that a growing number of steem power have a negative psychological effect ; users think they earn money without doing anything which means that many don't bother curating and actually work to earn.
Want to keep talking human psycho? Well, If you lock someone in a prison this person would be a lot more eager to want out than someone sitting in the same cell with the keys. Which is why a shorter lock time period would probably result to more people locking their steem.
There are also much better ways to incentivizes people to buy steem power, as OP said you could reduce the lock time period, you could also increase curation rewards percentage.
So you ask what is going to change if we completely remove the unecessary inflation?
Not much, your steem power balance will remain exactly the same instead of growing but your account value is much more likely to grow. Most importantly the price of steem will be allowed to breath and grow which is essential to pay for the increasing amout of bloggers.
As OP said speculation is not evil, it is actually the lifeblood of every crypto. Steemit thought it could do without but it can't.
Some links where I have been discussing this matter
https://steemit.com/steemit/@snowflake/5a2p2k-why-not-inflate-steem-by-only-10-or-whatever-reward-pool-is-instead-of-having-this-crazy-printing-going-on
https://bitcointalk.org/index.php?topic=1558366.1040
Regarding Op's proposals they are meant to incentivize people to buy steem power. I would argue that the first proposal is not even necessary because there is already an incentive to buy steem power which is curation rewards, the more you have power the more steem you get, maybe they should increase curation rewards but the system is working as intented.
Also the very reason we are concerned about people powering up or down is because of this crazy inflation, remove it completely and you will see that powering up won't be so needed to keep the price steady. The second proposal however is good in my opinion, people will be much more likely to convert to steem power with a much reduced time lock period.
Good points. I would like to hear the counter arguments too.
There is one argument which is that a low steem price allow for faster power distribution . Steem inflation was designed with this in mind with a "distribution" period.
However I don't think this is necessarily true. When you have a low price sure people can get more share % for less money but there is also a lot less people buying because of lack of confidence in the project. If the inflation was only 10% there would be a lot more buyers/traders and overall interests in the platform and sellers wouldn't have to sit on their steem, so the redistribution would probably happen at the same pace in both cases. A shorter time lock period would actually allow for much faster distribution as people who want out would be able to sell all their share quickly.
I am personnaly not worried about distribution at all, it may take time but it is only going to get better and it doesn't prevent the platform from functionning.
I'm also interested to hear some counter arguments.
People who want out quickly can already sell their accounts directly, although not everyone know that, nor convenient enough to do that. Perhaps it's good to add an account trading market on the site.
I hear what you are saying. The distribution will not matter if people don't want the Steem in the first place. Whereas if there is a lot of demand then distribution will happen anyway as people sell off to make profits. Good points.