Blake Letras Is Pissed That Steem Got Called A Ponzi...

in steem •  2 months ago  (edited)

is your blockchain a fraud 1.jpg

Blake Letras Is Pissed That Steem Got Called A Ponzi...

The comment that became a post...

I don't own a lot of STEEM, mainly because I think MKR, ETH and ZEC are going to be the crypto that gets me that lambo (its going to be a Shelby GT 500), but I think of Steem as wicked cool social tech. Personally, I don't like seeing whales, I wish everybody just treated Steem like a social platform and not an investment and had around 500 STEEM or less (preferably less) powered up.

I figure if everyone's upvote value was only worth $0.01 or so then Steem would work like a dream, and that's what I hope to see some day. But what really annoys me are these people that come out of the woodwork calling crypto projects scams and ponzis without a shred of actual evidence.

It just boils my blood, and that's not good for the blood pressure, so I relieved some of that with a nice long rant. Some people go with bubble baths, but me, I rant, its therapeutic. Below, you shall find that rant...

This post was written as a reply to a comment from this post:

Stupid Youtube Videos
original poster is @pagandance but he's not the reporter I ridicule...
(at least I don't think it is)

First, I agree on three points: 1. Downvotes are stupid, 2. The 20 + 1 Witness system is stupid, 3. STEEM distribution sucks. However, none of that makes Steem the blockchain a scam or a ponzi scheme and I will explain that thoroughly.

I am an outspoken proponent for getting rid of downvotes, don't believe me? Ask @themarkymark and others. I hate the concept and agree that it is a form of censorship called financial censorship. That said, this function does not violate a person's human rights like the reporter claims. You are not owed any amount of rewards, the system distributes inflation according to a vote system that involves upvotes and downvotes.

From the beginning, anyone is able to understand that this is a "stake-to-play" system and that money fuels authority on the platform. Its not about equality, its about network ownership. Don't like that? Okay, you have that right, but it just means Steem is not for you. Nothing is illegal about a private network that requires staking for participation. There are free-to-play games and there are pay-to-play games, and on both the people coughing up more money usually get advantages for doing so. Here, stake-to-play is the game, and higher stakers enjoy higher authority.

The argument that they are "printing money" for themselves is ridiculous. Every blockchain produces "money" in a way, so does Bitcoin. Arguing that POW somehow is different is nonsense, staking is every bit as legitimate as any other method. Crypto is getting into the business of creating tokens and coins out of nothing and that's that. It will continue, the fastest moving industry in the world is not going to stop for traditionalists that hate a changing world. "Bitcoin can't be uninvented..."

hobo invented.png

Is the 20 + 1 witness system stupid? You bet it is! Ethereum devs didn't mock EOS and Steem for DPoS for no reason. Ethereum's future staking system is going to involve a massive number of validators putting their own ETH on the line. That's what Steem needs too, and I definitely agree on this. I have never seen any good explanation for why the count needs to be 20 + 1, and I firmly believe in creating a movement to push for it to expand to a 1000+. That said, it is also true that block times do slow with the increase in validators, at least, this is true on Cosmos and I would assume it to be true with Steem. All that said, valid argument that Steem is not decentralized enough is not evidence that it is a ponzi scheme! By the end of this comment you will see that the reporter clearly does not know what a Ponzi Scheme actually is...

Your complaints against Steem in favor of sites like Youtube indicate that you're not attracted to blockchain as a global social media platform. That's cool, you can stick with Youtube and other platforms designed by private corporations. But look, Twitter and Facebook are getting huge heat for being censorship-oriented platforms, and so is Patreon. Steem integrates with frontends, so Steemit can remove you, the witnesses can too, so I agree that its not immutable like it claims to be, and that is a legal issue there. It either needs to be immutable, or it needs to not encourage that belief.

Okay, now to distribution...


Damn it! She's right... Life is not equal and fair, some people are hot and some people are not. Yep, distribution is unfair, and so is Bitcoin's. Just because Satoshi isn't using his coins doesn't mean he couldn't raise havoc one day if he wanted to do it. Satoshi has power, panty-dropping power, make no mistake about that. Additionally, we hear about it all the time, the vast majority of bitcoins are owned by a very small number of people. The mining is not particularly decentralized either, it only takes 5 pools ran by a handful of CEOs teaming up to 51% attack Bitcoin or to force implementation changes.

What blockchain is distributed fairly? None, at least none that I know of... maybe one of those hippie-love chains hoping to create a universal basic income chain like Manna is. Look, crypto is heavily capitalism-centric, and them capitalists like distribution skewed. You're just going to have to live with that fact, because they won't buy into the blockchain that makes them less rich, and they will buy into the one that makes them richer.

Time to discuss ponzi schemes... What is a Ponzi?

"A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. The scheme leads victims to believe that profits are coming from product sales or other means, and they remain unaware that other investors are the source of funds."

Does Steem qualify? When you buy STEEM with fiat currency you do obtain an actual commodity, the STEEM coin. It has a functionality and that functionality continues to work after you purchase it. After buying STEEM, that coin provides you with the same voting power and resource credit generative mechanism that the previous owner had when the STEEM was in their posession. You have purchased an asset, which has a distinct functionality and that functionality continues to function.

Are investors of STEEM unaware that the "profits" of the Steem blockchain are dependent on new investors? I would say that they are not unaware. It is frequently expressed that blockchain value for all blockchains and their coins are dependent on network value which comes from an increase in participants. Nobody is hiding or denying tthis fact, and a coin's value being dependent on its ability to draw in more users does not constitute a scam. Facebook, Twitter, Youtube are all valuable only because of network value and this does not constitute them a scam because all the investors are aware of that fact.

... "A Ponzi scheme can maintain the illusion of a sustainable business as long as new investors contribute new funds, and as long as most of the investors do not demand full repayment and still believe in the non-existent assets they are purported to own."

Steem, like Bitcoin, is a public blockchain or ledger. It is available to be used by anyone owning STEEM, and so long as people still wish to use it there will be a value. The creators of Steem cannot just run away with people's money, they have to find buyers for the STEEM, and those buyers will value the STEEM they bought and will use it. There is no reason that Steem needs the original creators to remain holders of STEEM, because the blockchain is independent of any individual person or corporation.

The same can be seen with Litecoin, which is considered a very legitimate blockchain and yet the creator Charlie Lee (aka Litetoshi) sold all of his holdings. It wasn't a scam, he created a well designed blockchain, sold all his holdings when the price was wicked high and retired. He now supports and works on Litecoin simply as a labor of love.

That's not a ponzi scheme, that's the American Dream...

As for my dream, that's putting a ring on the finger of that beautiful woman in the picture above. You can support that dream and the time I took writing this with BTC or ETH. Donate to my plan to stalk that woman with a very expensive diamond ring... Addresses below:

BTC: 13uczTE77ezqfqNHVrfDqnN1nhqawScRLW
ETH: 0x51f659D186E7849162Bab981604014ca14Eabec0

Every person commenting in this post with non-spam and on topic expressions will be gifted 50 HBO for fun and giggles!

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Reason why most people haven't adopted Crypto in Africa especially, Bitcoin became popular over here during the days of MMM saga and people still see it as ponzi not just steem. Steem is the next big decentralized social media platform that the world will queue in soon


Appreciate your comment dear @yungchief

Thank you for taking the time to share your view with me. Absolutely appreciate it.



I am sending you 50 Hobo tokens for commenting! :)

Read your post, then read @pagandance post and your comment there and his comment back.I bookmark steemit post. I search for things with the steemit search. I have commented on post that are over a year old, and I have gifted steem to some of those same post that are past payout, not a hard thing to do at all.

The censorship issue on steemit, steemit can block post, so can all the other front ends. This is actually a needed function and ability. I have not seen nor heard of any true abuse of total blocking of a person. A few have been blocked by steemit on their front end access point, note it is Theirs, they do have to worry about legal issues, court orders a person post blocked or made invisible, it is not steemit that censored them it was the court system.

We have all seen what youtube has done recently. No one likes the flag issue, a disagreement on rewards should not go against the poster, but on the person that gave the excessive reward. ie: remove the equivalent amount on the givers rewards. No loss to the pool then.

Anyway, I thought it was a good rant, I myself very rarely watch youtube videos, and did not watch any of the videos mentioned in either post.

one last thing, as far as I know and from what I have read, Dan left under amicable circumstance to get going on his next dream project, not because of a twit.


Dear @bashadow

I love your comment! Thank you for taking the time to share your view with me. Absolutely appreciate it.



Thanks for comment! I'm sending you 50 HBO.


It is difficult to compete on this platform, we should only keep in it all the faith that many of us have placed in steemit, I believe and I am sure that it is worth continuing in it.

I always remain firm and I will continue betting on steemit. I regret that there is always some unequal way in everything. But sometimes I think, you just have to try harder to achieve what you want.

I am always promoting steemit in my classes and I see that only because of the restrictions that we have in my country for reasons of electric power and Internet connection and many more Venezuelans would be in steemit even though there are a lot of Venezuelans but I am sure that there would be many more

Saludos desde Venezuela


Thanks for your comment, I'm sending you 50 HBO! :)

Ok, I see that your criteria is very broad on the subject of steemit!
You bring good news and bad news, but for some users we just see the rewards in the wallet 7 days after posting!
Your post has helped me a lot, you have a lot of first class information, I congratulate you.
let's hope Steemit manages to cover everyone's expectations equally!
you have my support...


I hope I won't sound silly if I ask you: who the hell is Blake Letras? :)

ps. do you really believe in ETH? Somehow I think old good days are already gone for this project. I see it the way I've seen yahoo - it simply does exist.

Personally, I don't like seeing whales, I wish everybody just treated Steem like a social platform and not an investment and had around 500 STEEM or less (preferably less) powered up.

I think that some maximum voting power should be introduced, to ensure that whales do not absuse this platform the way they do right now.

We cannot restrict people from investing in STEEM, but their power should be restricted. I think voting power should from the beginning be build similar way to reputation. Meaning: it's easy to grow at the beginning,but with time more and more "resources" is needed to make any difference.

  1. The 20 + 1 Witness system is stupid

Interesting. So in your opinion we shall have 1000+ witnesses?

I rather like 20 :)

I hate the concept and agree that it is a form of censorship called financial censorship.




Blake Letras is me, the guy that does most of the Hobo Team's blog posts and podcasts.

On Ethereum, I encourage you to check it out again and see what is happening with them. In my perspective, Ethereum is the only cryptocurrency out of all of them that is absolutely not a shitcoin. Miscrosoft, JPMorgan, small countries all choose to build on Ethereum. Countries are looking at Ethereum as a perfect platform to create their national currencies, which is something no DPoS system could ever do, and it could never happen on Bitcoin either.

It ruffles feathers when I say it, but its the truth... Bitcoin is successfully becoming a store of value, but its never going to be the global money it set out to be and there is one simple reason: whim. Nations are not going to throw away their power over their citizens by agreeing to use Bitcoin instead of their own local currency that they can control. Ethereum offers them everything they want and all they have to do is add to its network value and use small amounts of ETH for gas costs. ETH will likely become the resource used by countries and large corporations, not so much average people.

A lot of people are saying that this new exciting blockchain is the "Ethereum killer" or that one is. None of them are, as Vitalik said, a lot of these people make big promises but have no idea how hard it is to actually do them. Microsoft, JPMorgan and the other big corporations know this, that's why all the serious projects use Ethereum. The developer community is there and the money is there.

Joseph Lubin has been saying in his interviews that "they're the only game in town" and he's not saying that to be disrespectful or egotistical. Ethereum is the only real game in town for dapp creation... DPoS was created not so much because it was a good system but because POS is hard. DPoS is incredibly easy to corrupt and censor, because the Witnesses don't actually have enough skin in the game and there are far too few of them.

Blockchains like Cosmos, Steem, EOS are all going DPoS because its easy, and they call it decentralized, but its not, its Snake Oil. DPoS is no different than a democratic republic, that's what DPoS is, which we all know is corruptible at the human level. The US Constitution is a beautifully designed document, when I was flying between China and the US a read it again as an adult and thought how perfect of a plan it was, only it doesn't work. Politicians and legal professionals have some of the lowest ratings for trustworthiness of nearly all positions in society. This tech-based decentralization we are all talking about is meant to solve the human corruption problem and DPoS absolutely does not do that.

DPoS is never going to be trustworthy to governments and corporations, because its just 21 entities that have the power to completely delete your property on the blockchain, and you may not even have elected them. Ethereum on the other hand is going to make people risk ethers for just 1.5% ROI on the staked coins, and if they are found to be corrupt, they lose their stake. Its estimated that there will be approximately 30,000+ stakers/entities around the world at all times, which is without a doubt the most decentralized system for a blockchain ever. At Bitcoin's best, its decentralization will be 50 entities, right now its more like 5.

But its not all about reaching conensus, from an economic standpoint Ethereum is the most valuable cryptocurrency in the fact that its a recognized resource. Bitcoin is not a resource, to its name, it is a true currency. Its meant to do only one thing, record value transfer. Ethereum, EOS, Tron, Steem, Cosmos and maybe some others are indeed "resource" commodities. They work in a way that empowers you to do something on their network. And on that list, only Ethereum has proven itself already. Cosmos, EOS, Tron and Steem are all DPoS because its easy, but DPoS is just a democratic republic, and we all know they get corrupted.

I think that some maximum voting power should be introduced, to ensure that whales do not absuse this platform the way they do right now.

We cannot restrict people from investing in STEEM, but their power should be restricted. I think voting power should from the beginning be build similar way to reputation. Meaning: it's easy to grow at the beginning,but with time more and more "resources" is needed to make any difference.

100% agree on that.

I am sending you 50 Hobo tokens for commenting! :)

Dear, as long as people continue to trust in steem I think that this will continue to grow. I also think that every time it is more difficult to grow and this has made many people leave the platform, onestam, enmte not e proqure, tel because it is not profitable but hy many people who still rely on steem. It would be good to see changes that would give us a bit of equality to everyone, but that remains to be seen. Everything is a game of financial power.

Interesting post. I don't think Steemit is a scam, I'm sure most people in my country live off publications in Steemit. How can this be a scam when it can help support a small family here in Venezuela?

That has a very low value and does not attract the attention of investors? I'm sure that will pass. By the way, will anyone have the statistics of use of this blockchain? How many publications, comments, votes, and transactions are made in the year in the blockchain of Steemit. I'm sure it should be among the first 5 blockchains worldwide.

Maybe it has declined because of the new modifications that make it difficult for newbies. Already then it will depend on the oldest members to help them to grow the platform.

I also think that ETH is strong, otherwise, the cryptocurrencies of the ICOs would not be taking the standard ERC20, so I think that must be good this Ethereum ecosystem.

I am no expert in cryptocurrencies, nor in their behavior. I'm just getting to know the consensus algorithms and like most users, I have a vague idea of what a blockchain is and what can be done with it.

Generally, bad reviews are good propaganda as well.

So.. You are Blake Letras, I didn't know either

Thanks for sharing