Who pays for the blogging and curation rewards? (Part 1: STEEM POWER)
It is important the Steem(it) users and investors have an accurate understanding of how much debasement is accrued yearly to fund the various rewards paid by Steem, 77.5% of which is for blogging and curation rewards.
Although it is (multiples) higher now and falling fast, in the future the rate of Steem’s money supply growth will stabilize at approximately 100% (a doubling) yearly. Of that 100% yearly increase¹, 5% is created as STEEM DOLLARS (SD) and the rest as STEEM POWER (SP). And 90% is distributed to existing SP holders.
Approximate STEEM POWER (SP) Debasement Rate
The yearly SP debasement rate depends on the ratio of SP to non-SP (i.e. STEEM and SD).
An approximate mathematical model of the effect on SP holders, is to assume the ratio is 95:5, i.e. that there is no net powering up or down so the relative rate of creation of money supply dominates the ratio. In a recent video interview with @dollarvigilante, @dan and @ned confirmed that 95% SP is the approximate ratio currently.
So on a yearly basis, in a normalized to 100 money supply example, the holders of SP at the start of the year possess 95 of the money supply and end the year with 95 + 90 = 185 of the 200 money supply. Thus those SP holders’ percentage of the money supply drops from 95% to 185 ÷ 200 = 92.5%. Thus the SP holders from the start of the year are debased by (95% - 92.5%) ÷ 95% = -2.6%.
Note a percentage of the money supply is equivalent to percentage of the market capitalization. Thus any change in price due to the 100% increase (i.e. 50% dilution) of the money supply (such as in the often maligned Quantity Theory of Money) is irrelevant given the above computation is a percentage of the market capitalization.
Interestingly if the ratio of SP to non-SP is 90:10 then in our approximate model model above, the SP holders from the start of the year are not debased, because 90 + 90 = 180 and 180 ÷ 200 = 90% and this is functionally just a forward stock split for the SP holders in this approximate model.
The generalized equation for the debasement in this approximate model is ((100 × (x + 90) ÷ 200) - x) ÷ x where x is the numerator of the ratio normalized to 100. So if all the money supply is SP then the approximate yearly debasement is ((100 × (100 + 90) ÷ 200) - 100) ÷ 100 = -5%. And if 50% of the money supply is SP then the approximate yearly debasement is (100 × (50 + 90) ÷ 200) - 50) ÷ 50 = +40%, i.e. the SP holders gain 40% value as a proportion of the money supply!
Precise SP Debasement Rate
The approximate model ignored the fact that disbursements happen every day (or even intra-day frequency) throughout the year and that 5% of the newly created money supply is SP. Thus these new holders of SP take some of the normalized 90 units of the money supply that the approximate model above assumed would all go to the holders of SP at the start of the year.
The mathematical series for this daily compounded model is:
(90÷365) + ((90-5÷r÷36)÷365) + ((90-2×(5÷r÷365))÷365) + ... + ((90-365×(5÷r÷365))÷365)
where r is the SP to non-SP ratio.
Which can be simplified with the nth triangular number:
(90 - (5÷r÷365)×(1+2+...+365))÷365 = (90 - 5÷r÷365×365(365+1)÷2)÷365 = 90 - 5÷r×183÷365
So for ratio 95:5, the holders of SP at the start of the year will receive 90 - 5÷0.95×183÷365 = 87.4 normalized units of money supply. So we can precisely calculate the debasement (100 × (95 + 87.4) ÷ 200) - 95) ÷ 95 = -4%
| SP:non-SP | Yearly Debasement Rate |
|---|---|
| 100:0 | -6.3% loss |
| 95:5 | -4.0% loss |
| 90:10 | -1.5% loss |
| 80:20 | +4.3% gain |
| 70:30 | +11.7% gain |
| 60:40 | +21.5% gain |
| 50:50 | +35.0% gain |
| 40:60 | +54.7% gain |
| 30:70 | +86.1% gain |
| 20:80 | +147% gain |
| 10:90 | +275% gain |
| 5:95 | +349% gain |
Obviously if the market capitalization of the money supply of Steem (and thus including SP) increases (via less price declines than the creation of money supply would proportionally dictate) more than the negative debasement rate, then there is not a loss in exchange value. So the price can actually decline while the SP holders will see their net worth increase in exchange value.
In Part 2, I will do the calculations for the debasement of STEEM.
P.S. note there was a prior blog post about this, in which we had discussed the correct math in the comments. I believe my explanation above is more succinct and clear for the average person.
¹ Note this doesn’t include the currently 10% APR interest paid to SD holders, but we will ignore that relatively insignificant factor for our first estimates, given that currently only 2% of the money supply is SD. And also relatively insignificant given that the 10% APR can decline in the future.
Good analysis of the overall money supply dynamics and clear explanations like this are badly needed since the system is complex and many do not understand it. Upvoted.
A small correction:
They actually misspoke in the interview in stating 2%. Currently the outstanding supply of SBD (which can be found on steemd.com) is
"current_sbd_supply": "1876469.436 SBD",
That is less than 1% of the market cap of STEEM+SP+SBD.
Looked at another way, the blockchain is currently reporting:
"virtual_supply": "124634091.611 STEEM",
"current_supply": "123729768.992 STEEM",
virtual_supply is the total money supply if all the SBD were converted to STEEM at the current exchange rate. Again the difference here is <1%.
I know you usually stay out of the spotlight @smooth, but you are an invaluable member of steemit.
You have helped me be able to pursue my passion for helping others and creating interesting content full time here on steemit. It will afford me the ability to watch my nephews so they don't need to be put in day care by my sister.
I am indebted to your generosity and will pay it forward by helping as many people as I can even if it is not monetarily beneficial to me.
It looks like I will lose out financially by rewarding $50 to the winner of this contest $50 Steem Dollar Reward For New Writers Who Have Made Less Than $10 Steemit, but since it was what you blessed me with, I felt I needed to use it to help multiple users.
I asked @rok-sivante how to thank you directly, but I am not sure if you are on steemit chat.
ooooh, so thats what that is.. i had noticed the two numbers.
That said, doesn't it make more sense to calculate SBD against vesting fund steem, not against total market cap? (i realize the difference is trivial at this point), to measure debt exposure?
Since SBD has to come from vesting steem, the real measure of debt to ownership (and thus the risk from debt exposure) would be
vesting_fund_steem ÷ (virtual_supply - current_supply)
It does not. The vesting fund is SP balances.
IIUC, redeemed steem$ (SBD turned into steem through the convert steem $ function in the wallett) come out of the vesting fund. Where do you think the steem comes from when you convert SBD? Its not from mining that i can see, its not from liquid steem and it can't be created ex nihilo.
If enough people redeemed enough SBD at once, SP balances could run backwards (though there isnt enough SBD in circulation to do this now in any significant way.)...
Thats how they get the min 20-1 ratio debt to ownership ratio discussed in the white paper.
So they create say 4 steem per block for rewards (ignoring the POW). Block creation and liquidity (1 steem each) is paid in vests. Curation and blogging are paid half and half in vests and SBD. SO a total of 3 steem worth of vests and 1 steem worth of SBD
Then they create 10x steem for the vesting fund for every 1 steem thats created that way. So under the current system, for every 1 SBD +3vests created there are 40 steem added the the vesting fund. Thats a 40-1 ration of DTO.
I think this could go as low as 20% because the 50-50 split between steem and vests for blogging and curation can go to 100-0 either way, or anywhere in between. but im still figuring that part out.
Actually, it is. When SBD is created, its initial backing is supplied by the post's reward STEEM. Any fall in the price of STEEM will result in a rise of the virtual supply (and conversely, any rise in the price of STEEM will result in a fall of the virtual supply).
Basically if you have SBD, it's like owning the backing STEEM with two differences:
This is how leverage works.
Id venture to guess that you don't know very far then. SO your contention is that these steem used to pay SBD are just created out of thin air on redemption?
@theoretical
POsts are not rewarded with steem.... They are rewarded with SBD and vests.
In response to those rewards, steem are created and placed in the vesting fund. Those created steem are what backs SBD.. they are created by mining, so i suppose you could say theyre created by nothing.
You got this opposite... a decrease in the steem marketcap actually gives you profit with SBD, but yeah youre right. The loss is socialized as a loss to the vesting fund.. Because when SBD are redeemed, they are taken out of the vesting fund. thats why if enough ppl convert SBD< the steem represented by your SP balance would become lower.
All an SBD is is a debt instrument drawn on the vesting fund.
Thats why (and this was the initial bone of contention) the real measure of SBD debt exposure to the system is a comparison between SBD supply and vesting shares. Becuase SBD redemption comes out of vesting shares.
As far as I'm aware, this is totally false.
Here to you refer to virtual supply so I wanted to presume no new vests are created after the initial creation of SBD, but then you wrote:
Ah so the supply of vests is adjusted when the SD (aka SBD) are converted to STEEM.
But I don't understand, then why do I have to sell my SBD on an exchange when you could just transfer the backing vested to me? Who gets the backing vests then, or is it impossible to ever retire the SBD so then why do we need the backing vests?
And thus the trusted oracles for the exchange rate control the creation of new money supply.
So then why create initial supply of vests before the SBD are converted to STEEM? What purpose does that premature estimate serve? Surely coinmarketcap.com needs to account for the market cap in SP+STEEM+SBD any way, if they want accuracy.
The vesting fund apparently also includes the backing for SBD.
Are liquid STEEM also backed by specially tagged vests, or are they accounted for separately? I realize it is just irrelevant backend semantics though, i.e. doesn't reflect on the math whether STEEM are named "STEEM" or "vests with a special tag".
Didn't know, that there was so few steem dollars in existence, wealthy investors would want to look out for the 10% annual interest on the steem backed dollar, but given the low supply of steem dollars, they'd shoot the price of the asset sky high.
Interest wise, its still a worse deal than steem power.
Steem dollars are liquid. You can trade them at will. Can't say the same for steem power.
If youre buying for the interest, it liquidity isnt an isue.
Don't get me wrong I traded all of my sbd to steem, because I'm overly bullish on the future price of steem. You can't trade steem power.
Very interesting, thanks for sharing!!
While I understand some of what you are saying and a lot goes over my head, I am glad we have some brilliant minds who have created steemit (with a 42 page whitepaper, written so all can understand) and people like you that can help bring credibility to those who are more economically minded and may need answers to technical questions.
It's amazing that while you know so much, a person who knows about social media can make a post with no knowledge of any of this and make money. I love learning about the behind the scenes, but for those who don't, they aren't left out.
And once people earn enough that they wish to withdraw, they are then interested in learning about bitcoin and transferring steem and steem dollars.
Steemit has the opportunity to bridge the gap between cryptofanatics, and the casual social media user and both add their own unique views and value.
Your last sentence knocked it out of the park! Very much agreed, bringing two worlds together.
Yes and this is just the beginning. Could steemit become as big as facebook or youtube and maintain its quality content? I don't know, but I'm happy to wait and see what the future holds.
yes, I agree with you, many people need it because it is very valuable that person who has knowledge about cryptocurrency . Even I do not understand about it, but I appreciate it....really :)
Very well done and much needed post. I will use this post to deepen my own understanding and to explain Steemit to others! Upvoted with pleasure!
where is the 77.5% number coming from?
iiuc its 65 point something without liquidity rewards and 49% and change with liquidity awards.
so without liquidity rewards its 2/4.0476 = 49.4%
without its 2/5.0476=65.6%
For that matter, where does the dual cap come from from? If were talking fixed production per block....
3.875% + 3.875% = 7.75%. From the white paper:
So 7.75% ÷ 10% = 0.775, i.e. 77.5%
I understand the liquidity rewards are currently paused, but I am writing my analysis per the specification of the white paper. They may restart the liquidity rewards in the future, and anyway the difference isn't very significant.
I don't know what you are referring to by "dual cap".
OKOK. i see what youre doing... but this isnt really correct.
The blogging and curation rewards alone are just 7.75%.... the SP incentives caused by those blogging and curation rewards are the rest of that 77.5% (ie the 9-1 ratio again)
By dual cap,I meant that its either 1 steem per block or 3.875% I don't see how it why this number would ever vary... unless its a function of the decreaseed POW rewards.
I wrote in the blog, "how much debasement is accrued yearly to fund the various rewards paid by Steem, 77.5% of which is for blogging and curation rewards.".
That means of the 10% debasement of the money supply which is not just a forward split for SP holders, then 77.5% of the 10% (i.e. 7.75% of the total yearly increase in the money supply) is paid for blogging and curation rewards.
It is a bit annoying that you were too lazy to take the time to try to really comprehend my blog and instead immediately jumped into plastering the comments with your long-winded "walls of text" incorrect accusations.
If your attitude towards me had been more cordial from the get-go, I would have been more inspired to be amicable in my replies. As it is, I am trying to keep a smile on my face. Hope you too.
I appreciate peer review, but please take the time to comprehend really well. Whe you shoot off accusations without taking the time to comprehend a blog, you set yourself up to make mistakes and be the one wearing the asshat. I had a very good mood from writing this blog and receiving a lot of appreciation for it. And you rained on my good mood.
As well you have wasted some hours of my very scarce time.
Just as a side note, i think my explanation is a bit easier to understand... and more accurate, as its not rooted in money supply theory, which is basically silly anyway.
https://steemit.com/interest/@sigmajin/understanding-the-steem-economic-system-vests-sbd-steem-dilution-interest-and-all-those-crazy-things
https://steemit.com/economics/@chiefjay/where-does-the-money-come-from-part-2-of-my-steem-economic-model
The second one is actually the better of the two, IMO, but ive been told the first one is easier
In my opinion, frankly the second blog is so convoluted and inundated with a overly verbose explanation of the unnecessary complexity of vests, that I just gave up reading it about halfway through. Sorry but IMO it is really bad. That is not the way to simplify explanations. I don't intend to offend you, and I just want to be honest with my reply. I am not downvoting you. No animosity is intended. We are trying to help each other and the community understand.
In my opinion, the first blog is better organized and has more concision making it easier to follow, yet still you introduce this afaics mathematically unnecessary complication of vests. Afaics, the understanding of vests is a programming issue on the backend and it is mathematically irrelevant w.r.t. to understanding the economic structure of Steem, which is why I never mention it as it will only make the explanation of the economic structure of the Steem system more obtuse.
Afaics, there appears to be a mathematical equivalence between my way of conceptualizing (and the UI's way of presenting) SP as units of restricted STEEM coupled with the STEEM being separate units of the money supply where the supply of STEEM is increased ~100% yearly, versus your explanation of SP as vests converted to STEEM units by a ratio which changes as supply of vests increases. Frankly I've never found yet a complete explanation of the way vests are accounted and programmed on the backend, which is another reason I don't discuss them. And I haven't studied the code to figure it out. And I didn't find your explanation of them to be complete and unambiguous. If you'd like to cite a more canonical resource on vests, I'd appreciate that.
I don't know of a more cannonical source, unless the founders would care to comment. I figured out the way it works by looking at the numbers on steemd from day to day.
You cant get the numbers right without understanding vests.... i kind of see what youre trying to do, and tbh youre not far off but youre either double counting something or not counting it enough. Youre missing a key division that happens with the steem power value.
You're basically leaving two things out that almost (but not quite) cancel each other out.
1: the creation of additional vests to pay bloggers, etc devides the vesting fund, and decreases the Steem value of SP. In fact, if you @lukestokes (i think) has a pretty cool blog where you can actually see this effect happening with liquidity rewards (which are awarded the same way) as hourly pulses on a graph of a sharp decrease in SP growth rate. its visible here because althou gh the steem to fund them is created constantly, theyre actually awarded in big hourly lumps.
ALL new steem is created as steem power. not 90%, 100%. There is no such thing as newly created free steem.
The two things above almost cancel each other out, which is how you got fairly close with your numbers. But all youre doing is making an approximation based on an incorrect understanding of the proccess.
this is why your numbers are closest to accurate at a 0% growth rate of 81.8%.... , because thats the point where the two factors above cancel out perfectly. Its also why youre way off on the outlying numbers.
for example 5:95 SP ratio would create a huge gain for the 5%... they would start off with like 5% of the money supply and end up with a hair less than 50%, for a net gain of around 1000%.
the above should even be clear intuitively. If 90% of the new money being created serves to increase the value of the initial 5% holdings, the effect should be far greater than what youre talking about.
So for example, these 5 steem in SP. In the yearly doubling you create 100 steem. 90 of those steem are for SP incentives, and they get added on to those 5.
So those 5 steem in SP would now be worth about 95 (out of a 200 steem money supply)
For part two, rather than:
I would like to read about the "Why". It appears that this post was saying that the people who pay the rewards are the people holding the various Steem tokens; they pay via depreciation of their holdings.
What I don't understand is why they would do that. What's in it for them? I worry that the reason people are "powering up" is that they are thinking of it as an investment, whereas in reality the rewards don't even keep up with inflation if SP:non-SP is 95:5 (as you say it is).
Not quite... if you read my second link above, i do a pretty good job of explaining why. Basically, though voting for someone and giving them vests does decrease your percentage share of the system, it also increases the steem value of your holdings.
At the end of the day, what the vesting fund is is a way to mediate the exchange of voting power for steem. You give up some of your (relative) voting power and in return your steem value increases.
Now i suppose you could argue that the best startegy would be only to vote for yourself and award yourself vests and steem. But that only works in system. Youd be hurting the $ value of your holdings
Btw, your math is off. I can't figure out what youre doing, beccause its so convoluted. But its off. HEre is the correct way to figure debasement.
since 90% of new SP goes to increase SP balances, nd the other 10% goes ot fund newly created vests, we can just u the total supply doubles, with all of the new steem from the doubling delivered to the vesting fund.
so where X is the % SP we hold initially, the new total amount of SP will be
X+100
However, in addition to the SP supply doubling, the amount of total vests has increased by 10%. so we are going to devide the new vesting fund by 1.1, to account for that. (which is about the same as multiplying by .91)
.91(x+100)-100=P
this is the percent increase in our vest value in steem.
p+100/2 is our new percentage of total steem
so for 100% steem power
out SP increases in steem value 82%, and our total share of the money supply decreases from 100% to 91%...
the breakeven starting point for SP is around 81.818181%
the debasement of "liquid" steem is easy. Its simply the inverse of 1+ the percentage increase in the money supply (expressed in decimal). So if the money supply increases by 100%, its the inverse of 2=.5 if the money supply increases by 10% its the inverse of 1.1, or .90909090909
Disagree.
If you do not understand some math, then it is illogical to claim it is incorrect.
I believe your unnecessary involvement of vests is convoluted.
Disagree.
Incorrect. Only 95% of the new supply created is assigned to SP. The other 5% is assigned to SD (aka SBD).
You appear to be highly confused. The SP doesn't necessarily double. It depends on the ratio of SP to non-SP, since their sum is the money supply and 95% of the money supply is created as SP.
I won't bother to unravel the rest of your confusion. Please try to take the time to understand my math. I will try to explain it more in Part 2. I think you unnecessarily complicate your understanding by trying to think in terms of vests, which afaics is entirely unnecessary as illustrated in my math.
I do understand the math. The correct math. Yours is incorrect. because you explain it so poorly, with a bunch of scammy sounding double talk, i can't figure out precisely where youre going wrong, but its somewhere. *
You are correct that the SP doesnt necessarily double. If you read the statement you quoted, i do not claim it doubles. It would only exactly double when X (the percentage of steem held in SP) is 100.
Your thesis is easily disproven by an analysis of the actual numbers on steemd.
*EDIT i figured out where see my other comments.
I wrote if you don't understand my math, then it is illogical to claim it is incorrect. Until you can be specific on the mistake in my math, then you are just speculating (which is not math).
I didn't go to your blogs and insult you claiming your math is wrong and being unable to proof mathematically and show where the mistake is.
If you will (especially amicably) clearly explain for everyone, then that will be helpful and appreciated. But lazy accusations create animosity.
@sigmajin at this point you are creating useless noise. See the bolded italic text in my other reply. I am not going to reply further on your attempts to obfuscate by throwing undefined terminology and walls on irrelevant minutia verbiage all over the map. My model is per the white paper. And it is correct.
Does our steem power collect less interest while we're powering down? I was asked this today in response to my video and I still haven't dug up a good answer.
Apologies for my prose as I've been awake 27 hours. My understanding (which afair @smooth confirmed at bitcointalk discussion) is that our SP continues to earn the debasement rate I showed until it is actually converted to STEEM. So for as long as you see it still listed under your SP balance, then it is being debased as SP not STEEM. Also afaik powered down SP (aka VESTS) can be aborted at any time before it is actually converted to STEEM, but I personally haven't tried it yet. The debasement rate on STEEM is much worse and I will detail that in Part 2. It would have been too much to put in one digestible blog post.
As a side note, this will show through increased payment amounts on your 104 payments. So, for example, if the rate of interest is 100% per year, your 52nd payment will be approximately twice the size as your first.
The payment amounts will not be assured to increase, as measured in a unit-of-exchange such as dollars. As I explained in my other comment response to you, you are sort of building a strawman here, because the increased money supply would cause the exchange price to decrease if the market cap will remain constant.
If you believe in money supply theory. an outdated economic philosophy that hasnt been taken seriously in a century.
Yeah, the value of a steem might go up. It might go down. I assumed that was a given.
Did you not read what I wrote in my blog. "such as in the often maligned Quantity Theory of Money". Obviously I am aware that the QTM is not in control of the price, i.e. there are other factors such as variable investor confidence, etc..
Then why did you assume it couldn't go down? I will quote you, "this will show through increased payment amounts on your 104 payments".
Thank you kindly for your timely response :)
It does collect power while powering down. I tried powering down for 1 week and still accrued new SP at the same rate as prior to powering down.
Thanks! That's all I wanted to know. :)
You're welcome.
Thanks @justtryme90 That is exactly what I was trying to get at.
full $teem Ahead!
@streetstyle
@piedpiper Good question, sorry I can't answer it. But I bet @smooth or @anonymint could answer you. I hope they do because that is an important question that matters to those who are thinking of powering down.
Full $teem Ahead!
@streetstyle
Dan & Ned Rule the World
Basically, what happens when you power down is youre cashing in your vests. So lets say you have 104K vests, youre cashing in 1000 at a time every week.
if you go to steemd.com, youll see up in the top right steem_per_mvests. This number is always increasing, because steem is created and added to the vesting fund by mining. Thats why your SP is always increasing because the steem value of the vests you hold is increasing.
So whats going to happen when you power down is youre going to a little more steem each week for your payment. your last payment should be around 2X your first one.
Its interesting to note that it actually takes much less than 104 weeks to get the full steem amount listed in your SP balance. Right now, because the rate is increasing so fast, it looksl ike it might take less than a year.
Thanks for break down @sigmajin Especially that info. about it pays out sooner. Wow!
Full $teem Ahead!
@streetstyle
I don't see any mathematical need to mention vests. It is just complicates the explanation, because all that matters is the rate that the SP is increasing every year and the debasement rate. In Part 2, I will endeavor to explain the difference between those two metrics.
Yes this is true because the rate that your SP holdings are increasing is always greater than 0. But I think it is misleading to insinuate (by omission) that this means the users will get the displayed $balance out before 104 weeks, because if the market cap remains constant the price must drop due to the 100% yearly increase in the money supply. @smooth had pointed out to me that the weighted average price of powering down is 1 year of risk, i.e. if the price declined by a constant rate during 104 weeks, the weighted average price would be the price at the 52nd week.
Im not sure what @theoretical said that disagreed with me. He did correct my statement that the backing steem is created ex nihilo (though its semantics.... i guess you could call creating it by mining ex nihilo... i call creating it by mining creating it by mining...) but he agreed with me that the steem to redeem SBD comes from the vesting fund.
His explanation merely restated what I had said... that the redemption of SBD comes from the vesting fund.. which was the entire topic of debate if you read through the thread.
THe whole thing that triggered it was that I had said that it makes more sense to evaluate SBD against the vesting fund (vice against the total supply) to determine the risk from debt exposure, since SBD are redeemed by there. There is nothing in his reply to contradict that. Aside from a basically semantic disagreement about what ex nihilo means, I challenge you @theoretical or anyone else to point out an error that he corrected.
I already wrote a pretty concise explanation of the vesting fund, vests and steem (which i linked and you think is too complicated) I don't know what else i can tell you. Its obvuous that youre one of those authors that gets upvoted as a matter of course because of your connections. That doesnt make you right, and it doesn't back your math (which is wrong).
For example, when you say a change from 5/100 to 95/200 is a 349% increase, that is wrong. And its wrong regardless of what dantheman, theoretical and complexring believe. Its wrong even though you got paid $2k to do math poorly. its just wrong. Instead of arguing with someone who clearly possesses a greater acuity of discernment than you do, you should just sit there and be wrong.
I've already gone head to head with complex on economic issues and the underlying math. And im confident that, in that area (if not in my understanding of how i works) I am at least his equal.
Just BTW, since you brought academic credentials into it, i have an MBA and a juris doctorate.
Well sure. Obv given a linear change the weighted average is going to be in the middle. The point is it could as easily go up as down. I think everyone understands that the price of steem 1 year from now is not a given. But the fact remains that if your SP balance is X, a powerdown to get X steem doesnt take a full one year. That the value of that X steem is unpredictable is a given, i think for most readers.
Your failure to see this is probably why your math is off. Youre figuring the dilution wrong because you don't really understand whats happening. Youre imagining that bloggers get paid in steem (they don't)
If the currency is healthy, there is no reason to believe that the marketcap would remain constant. In fact, i challenge you to find a single successful crypto currency that has maintained a constant (vs growing) marketcap. It kind of seems like this constant harping on monetarist nonsense Is an attempt explain prices circling the toilet.
Isnt this coming frpm the guy, btw, who predicted a 1000% increase in the price of steem over 5 years.
You had numerous errors upthread that were rebuked by @theoretical, so until you produce a cogent canonical reference for me to review, I am going to assume you are confused. Very many people have read my blog and upvoted it, include @dantheman, @complexring, @smooth. The middle guy is a PhD mathematician.
My point was not whether the market cap would go up, stay constant, or go down, but to not give incomplete explanations that make such assumptions as you did.
I know the blog you are referring to and it does not predict an increase in price. Perhaps you meant to write increase in market capitalization. You keep making errors. Yes I did have some myopia in that old blog, but you didn't even get the accusation correct, lol.
Come on man, stop creating butthurt animosity and go write an eloquent, concise explanation for everyone. So then we can compare math notes. For now, you seem confused and/or the explanation in the white paper is incomplete and everyone is confused until we have a canonical specification.
Great!!!