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RE: Summarized Explanation for the Falling Price of Steem
A good thing is that the rewards for posts on the landing/trending page of steemit.com are starting to look realistic, i.e. newcomers will not think it's fantasy or a scam.
About inflation/dilution of shares, Steem/Steemit has to grow by maybe 15% a year (given that most of the Steem is being kept/recycled in the ecosystem), which is realistic in the long-term. There is potential for a lot for a lot of synergy with added functionality.
Personally I don't like the witnesses model of a blockchain very much, but from an investment perspective, it probably won't count very much, as potential big investors of the future first and foremost would see the social media aspect.
At the moment, the value of Steem is defined by the value of Steemit. I'm not certain what the value of Steemit is ($100k? $1mln?), but apparently the cryptomarkets think its low enough, not to compensate for the ever increasing supply of Steem.
I wrote a post about this issue here https://steemit.com/steemit/@snowflake/why-not-inflate-steem-by-only-10-or-whatever-reward-pool-is-instead-of-having-this-crazy-printing-going-on
I don't even know what the purpose of the inflation is, it seems like it could be reduced to about 10% and still work as it does today
This is what I've been trying to figure out - What can WE do, as a community, to increase the value of Steem? If that value is defined by the value of Steemit, then our focus should be on increasing the value - or even just the "perceived" value - of Steemit.
Perhaps investments could come by allowing members here to sell their items (art, photographs, etc..), and their services (writing, tech services, etc..,) - and by "allowing" I mean the community not downvoting sales posts (selling with overall community blessings).
If enough members sell here, and drive traffic to those sales posts and start making sales (primarily to buyers comfortable with using Bitcoin, as that is what they would be using to buy Steem to make the purchase), would that increase the value of Steem?
So then we could start creating posts with "Selling" as the category tag.
And reputation, verification would become more important as well.
There's already PeerHub, accepting sale of services and products, and that's in Steem and not Bitcoin, which should theoretically (but not really, as I've explained in my article) keep the price of Steem up (as we wouldn't need to sell Steem for Bitcoin, in order to obtain said products and services).
The truth is that the underlying mechanism of Steemit is flawed and this is something that the founders, @dan and @ned, need to change. Money printing should be reduced significantly or even stopped. The actual value of Steemit should be confirmed by recognizable business agencies or through offers of known social network competitors. This will bring investor and cryptocurrency trader confidency back.
I've thought of one thing to drive the price of Steem up, but it's it more of a joke - invite dissidents or whistleblowers. If governments want to silence them up, they can buy Steem to become whales and downvote their posts. In fact, it's quite possible that with enough money, they can wreak censorship havoc to the entire network, downvoting everyone's posts.
(i was thinking advertisement plugs to promote posts could be paid for by outside currency.)
though an alternate currency would be nice to exist on its own without need to track any other one(s).
so then sale of goods in exchange for steem bucks would allow people who want to promote their content to do so using the bucks paid while not having to bring in any fiat paper money to the system nor ask users to acquire that currency to buy what they like.
a seller just brings his goods or services for trade,
in exchange for steem he spends to promote his goods or services available for trade for other goods or services being traded in the market or bought with whatever currency is used to negotiate the transaction. (currency is just a ledger system, dollars are only needed for paying government taxes, [digressive point to following up on the topic of paying dues, a service people could provide in exchange for officially produced steem {my ignorance about where steem comes from} is to provide cpu cycles like SETI@home or to do file organization or tag pruning {unless that is already automated} or they can collect fuel to deliver energy to the steem server farm or lay fiber or mirror the site to help absorb bandwidth costs in exchange for steem reimbursement to get them SEO preference by having promoted their fiber laying or energy producing company's logo and deals on the site. ie "today's steemit crypto-social networking service is brought to you by alan and sons wood gas supplies™ they're helping to Make America enerGy independent Again and are ready for your business. now accepting steem, bitcoin, doge coin, silver coin, gold coin and carrot coins by the pound as payment choices." and if the service was a membership dues charging site, like a members only trading post, albeit with publicly visible ads, then steem could be bought back by the system as it recycles itself. posts could cost money even grammar mistakes, refusal to use capitalization or obvious violations of decent use codes against profanity or grievous misrepresentation of fellow members can be fined in steem so that either such posts get removed and a waiting period elapses or they have to get enough upvotes to pay the fine before more posts can be made from the posting account.])
Why and what don't you like about witness model?
People are corruptible. Right now steemit is small and cozy (though you already see the cronyism at work https://steemit.com/steem/@transparency/don-t-vote-for-witnesses-your-vote-does-not-matter which is exactly what Satoshi originally designed to prevent), but if it became a global force, we'd see the same effect of today of psychopaths manipulating their way to the top, and it will become the IMF 2.0.
I see your point. However i find that the design of a blockchain with 20 even powered witnesses is better than one where we have 3 miners that can control the chain, such as in bitcoin. To me the design of witnesses seems more decentralized than how bitcoin works.
What is however not decentralized at this time is the fact that steemit itself has a majority of SP, but this should resolve itself due to the dilution happening.
It would be interesting to analyze what is an ideal decentralized architecture.
Mining will re-decentralize again as eventually miners will have to find a way to make use of the waste heat in order to stay competitive, and this will not be applicable to large-scale farming. Maybe long-term it will be even so that end-users will be mining again with devices like toasters, and not for profit, but just to get some crypto-coins back again for their energy bill.