You are viewing a single comment's thread from:
RE: Summarized Explanation for the Falling Price of Steem
I agree that the rate of inflation of steem is too high. It is part of the mechanism, however, that there be inflation, as this is how the voting/distribution works, and it would work equally well in any similar function to what taxes are ostensibly about.
But it doesn't need to inflate as fast as it does, and the measures to try and get people to lock them into SP are not sufficient, and the benefits of holding SD are too great and have a negative effect by causing selling of steem to hold the peg.
I would be interested to know what the current thinking is in the Steem Inc developer community about the parameters. I'm sure we can't be the only ones who see there is a serious oversupply problem.
Actually, when you think about it, while Steemit does need a "self generating currency" in order to power it's upvotes mechanism, it doesn't need an unlimited supply of it. Think of what would happen if there are only 100 million Steem (Steemit shares) to be ever produced. The currency won't keep loosing its value, as there's a limited supply of it. And as Steemit becomes a more powerful player on the social scene, its shares (Steem) will increase in value.
This network is either created by someone who doesn't really understand how supply and demand, and currency and share trading work, or built the network as a pyramid scheme - expecting a huge inflow of users from other social networks, and being afraid that there wouldn't be enough of a supply for all the new users, which will increase the value of Steem, at which point he'd cash out.
If it were the latter case, whales should've cashed out by now, because the price of Steem lost almost ten times its value, since the start of the project. While we do see whales cashing out now, it's because they lost trust with Steemit's model. So, leaving aside the idea that Steemit is a pyramid , we're left with a poorly designed cryptosocial network.
How exactly do you away free money without printing it?
You have stated that inflation is not needed but have not explaned how
I did explain. You print a finite number of money.
But that way you will eventually need a new way of funding. Like transaction fees or something else.
If there's no reason for people to buy Steem, yes, eventually all Steem will be cashed out by the authors. Which outlines another flaw of the system - like any proper functioning economy, we need not only to import products and services (sell our Seem for other currencies), but to export products and services (Steem to be bought, in exchange for other currencies).
Since we are not exporting anything (we offer our content for free - there's no advertising, nor subscription), Steem will only be exchanged for other currencies. That's why it's constantly printed, but the more there is, the less its value.
@dek - Commenting here, but intended for
If Steemit posts really have value beyond the upvoting period, that suggests authors should delete their content the day before the last payout period expires, and then sell collections of their content, through Peerhub for example. The 30-day upvote and editing period is just a 'pre-publication market testing' period.
The inflation to reward content and miner is about 10% why is the inflation 300% ?
There is a lot of unecessary inflation right now.
If the inflation could be 10% per year every year trader would be able to speculate on the currency and increase its value, as it is now nobody is interested to buy such hyperinflated currency
I wrote a post about this 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 think they were simply optimistic about uptake and especially the rate of buying and banking steem. Obviously they were mistaken. Also, the rewards come from inflation, but it needs to be pointed out this is coming out of everyone's wallet. So by its nature it has to be inflationary. The issue is how much.
Why would you say the rewards come from everyone's pocket, when the pool is generated (money are printed) every day? And I don't agree there needs to be inflation - a finite number of Steem can increase its price, per share, as Steemit becomes more and more valuable.