The Small Number of Decimal Digits in STEEM
Have you ever compared the number of digits in the STEEM token compared to other crypto currency tokens such as Bitcoin, Ethereum or many others?
When I first got onto Steemit, I was already aware of Bitcoin, although I didn't purchase any Bitcoin until I got onto Steemit. One thing that struck me though, was how limited the amount of digits were for the currency. Thanks @builderofcastles for reminding me of this.
Bitcoin could be divided into smaller fractions based on a higher value so that people could transact in smaller denominations. This is advantageous if you are looking to make a currency that will become popular and have high-value. You want to make sure that it is easily divisible.
This is what brings me to thinking about STEEM and the ideas from the founders and many others about creating a currency that could gain much value and "dominate the world". For STEEM to be used more conveniently in smaller denominations, the amount of decimal places should be increased.
But the small number of decimal digits doesn't only affect the use of the currency. There is also the issue of lower volume holders of Steem Power and their influence through that SP.
Maybe most of us don't realize it, but when you have a small amount of SP you don't even influence the payout of posts enough to even apply a smaller fraction of STEEM as a reward, let alone a a full $0.01 cent or even a tenth of a cent $0.001.
This means that while people are contributing STEEM with their of votes, so even if it is a smaller fraction, is it being added with all the other small contributions to eventually equal 0.001 STEEM or $0.001 or $0.01 on someone's post?
I don't think it is. So that means people's contributions to other posts -- however small -- could still be applied but currently aren't.
This also affects curation rewards for your votes applied as well. The curation rewards are based on your SP.
A downside is that dupe accounts and people who try to use them to get more rewards for automated activity (bots) or self-voting, can get more fractional rewards as opposed to getting 0 due to their low SP (unless the owner supplies them with SP so that their votes and curation gets them more rewards). Right now the 0.000 STEEM digital limit keeps that down more.
What you think about all this?
Would you like STEEM to have more decimal places?
This would mean that for all the smaller SP holding accounts and users starting off, that they would be able to get smaller fractions of STEEM. But not SBD.
Maybe curation could be optionally done in 100% payout with SP as well? Maybe comments could be posted that way too with an option in Settings? Then SBD might become less popular, and reduce the need for SBD and the leveraging with STEEM to keep it at USD$1. Maybe that would help the price of STEEM as well?
1/10 of a penny is irrelevant. it isn't needed , just get rid of it.
then again , when steems goes to $100 dollars and makes me a millionaire that .001 will be worth 10 cents
It also adds to a 'too-much-information' problem when deciding on your own valuation of an asset.
The only place they're useful (in my opinion) is during trading to settle a final price. Especially if it's a penny stock being traded or on a heavily leveraged trade. Even there though - it's there for the computer to crunch numbers - not me.
Would adding more decimal places also add to the work required of witnesses, or put stress on th Steem blockchain...I have no idea just thoughts.
upvoted & resteemed
Yeah, more transactions would be sent since more people would get smaller fractions instead of not getting them. It's a good point another commenter raised. Thanks for bringing it up as well. I guess we are stuck with 3 decimals ;)
I think that it isn't applied because it makes more transactions that are almost worthless. Steem is already having issues with the number of transactions.
You bring up a good point ;) That's a bottleneck that needs to be considered. Thanks for adding that.
Interesting thoughts on this. I would think all those micro votes are going somewhere, even now. But where? Got me thinking...resteemed so someone above my payscale can add some thoughts
Yeah, into the aether? :P Thanks for the support.
Had the original inflation rate been maintained this wouldn't be an issue. It was limited to 3 because prices like .000005 are not user friendly nor interface friendly.
Smaller amounts than $.001 also don't make economic sense to track. If steem ever reached $20billion market cap then a 100:1 split may make sense.
Thanks for stopping by and explaining the reasoning ;)
One day I am sure Steem will reach $5bn market cap, but we are in for a bumpy ride in cryptos in Q3/4 as fiat asset markets are likely to crumble. @dan
I understand a threshold applies for SP to be earned for curating. If the threshold ($0.001?) is not met, no SP is earned. For newcomers, this threshold can be hard to reach. I am not sure whether the threshold was designed to have this effect. To me, it does not make sense (why not allow micro earnings for newbies?).
Yeah, I don't know what the design reason was... hehe.
Interesting. Hadn't thought if this before. I see in your comments that people have suggested its because of the extra number of transactions that would need to happen. I wonder how many more transactions it would actually be.
I'm interested in this statement. Are you able to elaborate? Is sbd$ not a good thing for steem/steemit then? I thought sbd$ was integral to the platform. Or am I just confused?
Thanks
@fortified
Well it's good for popularity. People like what they know: the dollar. A token that's a dollar is easier for people to relate to for value. It doesn't need to be this way. It would affect Steem, I think for the better. Maybe I'm wrong ;)
@krnel -You bring up a very valid point. The lack of more decimal places definitely makes minnows feel frustrated when we vote and see it makes NO difference. I am sure it all add up eventually but the immediate morale boost of my vote 'makes a difference' is lacking. You are correct in stating that Autobots and self voters will also get benefitted. However, that is a minor downside compared to the overall benefit of the community. I defintely support your idea. Upvoted
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Honestly, I'm not sure the plan is to have STEEM being really high value per coin, because as far as I know there isn't any limit to the number of tokens and they're essentially built onto a compounding inflation system where more and more are created over time. Correct me if I'm wrong but at a certain threshold this basically guarantees the price per STEEM token going down, and the only thing retaining your account value in that scenario is getting more of it through curation or posting to maintain your relative stake ratio of the overall amount. If the marketcap is rising faster than the inflation of the token then it's value will also increase, but the higher the market cap goes the harder it is for it to keep increasing by some steady percentage needed to outrun the inflation mechanic, so in the end everyone will have a billion steem coins and buying something will cost thousands or more. At least that is my long term projection based on the current system.
In 19 years no more STEEM will be created.
where did you get that?
Interesting...I had never considered that before...thanks for the info!