Steem Price Needs a Fix, ASAP!
The Steem value is just dropping, and dropping and dropping and dropping. Quite annoying, at first I was silent about it, but I can no longer be silent about it.
My value had dropped from 2686$ down to 1723$, pretty bumpy ride. And the disturbing thing is that Steemit is actually growing, and bigger than ever. Then how come the price is plummeting on Poloniex?
WHY IS THE PRICE DROPPING?
It is because Steem is a deficit inflationary system. And there is no problem with that, that is how the currency works and how rewards are distributed.
The problem is that there is no demand. So it doesn't matter if 1 billion people will use Steemit, the price won't be higher, in fact it will be close to 1 Satoshi, if 1 billion people were to use it, because they don't contribute economically.
ADDING ECONOMIC DEMAND!
Steemit seriously needs economic demand integrated, ASAP. We have a social networking system here where people can blog. That is great. That is a form of communication.
Now we need to add the 2nd layer to it, which is products & services, traded in Steem, in order to add value to it, so that people will buy, hold and trade in Steem.
Steem is a fiat currency, that is obvious. However just as the USD, the thing that gives value to the USD, despite being inflationary, is the fact that it's used and traded in the population.
So we need to add value to Steem, by having products and services, that are paid in Steem, so that people will convert their BTC into Steem, in order to purchase them.
This means:
- Job market ( where people can trade post job offers in Steem, like Jobs4bitcoins is for BTC)
- Web services (VPN network, Adult Camera Shows, etc.. paid in Steem)
- Free Market (add Steem into Openbazaar, or create a similar marketplace for goods & services in Steemit)
- Gambling with Steem
etc....
The Steem currency needs utility value ASAP, to stop it's decline towards 1 Satoshi. People need to be able to use Steem outside of Steemit, or integrate additional economics features into Steemit, like some market system directly in Steemit.
This needs to be done ASAP, otherwise the price will hit 1 Satoshi, because everyone is just cashing out of Steem. So all entrepreneurs that are reading this article, think about it, and then create some service that will be built on Steem.
Sources:
https://pixabay.com
https://poloniex.com/exchange#btc_steem
http://steemwhales.com/profitgenerator?weekly
Indeed.
There need to be more "commercial" apps here. And they need to be "for a fee," even if for a minimal one... I know this is all about decentralization, but there needs to be a monetary business plan behind Steemit, Inc.
For example, how about a crypto-based crowdfunding app? Could be great for charities and organizations... and they could bring their followers, who could contribute directly through either blogging rewards or investing fiat in Steem. The other crowdfunding ventures charge up to 10-15%, so a 2% commission would look attractive. And it offers a "soft entry point" to the alt. currency market for more mainstream people.
A marketplace, yes! I keep bringing up an eBay/Etsy marketplace as a TRUE peer-to-peer market, as both eBay and Etsy were, before they became corporatized. There's a HUGE underserved market for small sellers, artists, creative souls. Again, minimal fee instead of the 10%+ charged elsewhere.; Steem and maybe BTC are the primary forms of payment. Making it part of the Steemit, Inc. umbrella of services creates a solid background financial model behind Steem... which, in turn, would make less technically savvy people feel less like they were simply "investing in air."
Well Steemit is just a platform, if we want to keep it decentralized,then we need 3rd party apps and systems working with Steemit or on Steemit to add value to Steem.
There needs to be a "magnet" that will attract value into the Steem currency, and keep the price bare minimum stable, but preferably, going up.
Currently Steem is like a bucket of water with a hole on the side, where the water leaks out. We need a "water tank" to fill the bucket back up, to make up for the water that is leaking out from it.
Seems to me these could easily enough be developed and applied externally, while making the appearance of running "under" the Steemit umbrella. Decentralization is a nifty thing... to a tiny niche group of anarcho- and crypto-savvy core users... a broader audience won't want to run 17 separate helper apps... they just want everything to work in one place. If it gets "too complicated" they'll head straight back to Facebook and eBay.
Yes, there need to be magnets here... and they could probably be best developed as extensions of this social blogging community we have started to build here. The core users are the system's best ambassadors.... they ones who can go forth and say "Not only is this a cool social blogging platform, but look what else we have here: Our own versions of GoFundMe and eBay/Etsy and Instagram... only better and uncensored!"
yes and i think that will happen and is beginning to happen. there are great minds on here and people are incessantly brainstorming how to create these things but are all still in the beginning. i recently saw steemshoot, something steem's instagram and there are others!
That is small thing. We need a Steem based marketplace ASAP, that is the most obvious fix right now.
We have the social element, so we can use the userbase of Steemit as buyers and sellers. We just need the marketplace, and let people play around in it.
Sort of like an web based Openbazaar but for Steem.
The most simple implementation would be for every category to get 3-5 promoted listings where one can bid to hold the top slots for a number of days.
That is only inflation control, that doesn't add external demand. We need external demand.
So that people will switch their cryptocurrencies into Steem. And how you achieve that, by having a service or product, designer for Steem users to buy more Steem in order to use it, or to get outsiders just using Steem just to get that product/service.
This would guarantee a minimum of 10% price increase yearly +/- other good or bad effects on the price. This is how fractional reserve lending stabilizes the price of a fiat currency.
I've kept it intentionally simple. Without rebelling against the system (lol) and admitting it is an extremely hard design goal (if not impossible) I think it a design flaw not to adopt some kind of early hyper inflation to the point where new contributors and contributions are of increasing value rather than decreasing. This idea is an alternative approach to get that result.
With simple dumb advertisement slots (dumb is nice here) the system can directly convert traffic into value as the value of the advertisement slot would scale with the volume and quality of publications.
A fun angle to this is that it runs entirely on cash flow. Where the money goes is almost irrelevant. If it for example goes directly to the people hosting the website it creates incentive for others to host the content. More fun would be to spend it on buying advertisement slots elsewhere, preferably from someone who takes steem.
At first it wouldn't create a lot of demand but the value of dumb advertisement scales exponentially with traffic. If you want a front page advertisement slot you will have to some how find the steem dollars to bid. When you lose the bid you will have keep them for next month, bid on tag pages or you have to some how sell them again. If there is enough traffic it will create monthly curves that attract investors. If the value goes up gradually advertisers will be smart to hoard a lot of currency and sit on it.
does it actually matter for writers(as separate from investors)?
Yes, because the higher the Steem price, the higher is the daily allocated reward pool.
People used to earn 50,000$/post when the Steem price was high. Now there are more writers now, so the pool is more distributed, but still. More money can be earned with high Steem price.
So the way it works is that every day X amount of Steem is allocated for rewards. Let's say 1 million. So if there are 1000 posts each one getting 1000 Steem worth of posts, that empties out the pot. So each writer gets 1000 Steem in this scenario. Now if 1 Steem is 1 $, then that is 1000$/post. If 1 Steem is 10$, that is 10,000$/post.
If there are only 100 writers, then for a 1$ Steem, you get 10,000$.
The number of writers will go up,so unless you are a good one, your reward will drop. But if the price drops too, due to inflation, that will mean that you as a writer will earn less and less.
Yes but don't forget that one selling idea of Steemit is that the content is the real value. Hence, what you want is people writing here as much as possible, with quality and quantity. My personal view is that I came here for collaboration, not for the cash first. I also never put money here, but my time, which I found more valuable. That doesn't mean I am not wondering what can be done for the investors
The content is the real value in the artistic sense. But it has no economic value, until you insert it into some kind of economic activity.
An average Steemit post has no more economic value that a Twitter tweet.
However the #investing content may have real value. For instance, if I told you to buy currency X, and then you made 200% profit. You can then put that money back into Steem, now that would be real value flowing in.
Other than that, not much economic activity is going on here. Maybe we need an AD system to make up for the leakage. Or bare minimum some P2P trading apps.
Well as long as people spend time on your platform, investors will assume there is some potential economic value: see facebook, twitter, snapchat ...
I agree something must be done. For now it doesn't look like a viable system.
No, investors should not be the only ones who put money into it.
There needs to be a passive "magnet" that attracts value , besides the investors.
Now that comes from trading, and customers.
If there is no other value than what the investors put into it, well that is like a ponzi scheme, or a lottery, where the money is shuffled from 1 hand to the other.
We need to be able to siphon money into Steem, from outside cryptocurrencies, or even from fiat currencies.
We can just assume the flow of money is wrong or broken.
This is terrifying
Why? There are already people working on this. We just need a solution faster.
Well the way you write about it, it sounds like the price of Steem is doomed to fall into it reaches "one satoshi"
I remember watching an interview with Tone Vays with Jeff Berwick and I seem to remember him mentioning something about the 100% inflation rate but I did not quite get what he meant.
Put you put it very clear here. Steem as an alt coin is doomed is how I read this post.
"The problem is that there is no demand. So it doesn't matter if 1 billion people will use Steemit, the price won't be higher, in fact it will be close to 1 Satoshi, if 1 billion people were to use it, because they don't contribute economically"
No it's not, I didn't said that. Steem is going down at the moment ,but that doesn't mean it won't have value later, once economic apps will be introduced.
Phase 1 is complete, we are getting many users.
Time for Phase 2,which is to integrate economic apps here, like P2P trading, and so on.
We need to make Steemit into an online multimedia/trading platform, for a global decentralized economy.
I was just saying that this is how the post came across to me.
OK well are you saying then that Phase 2 was part of the plan from the beginning or that it needs such a plan now?
I don't know if it was or not, but it's pretty clear to me that a social media platform has many other use cases besides chatting and blogging. So we need to utilize those too.
Even facebook added their crappy credit system into it. So every platform that deals with a human audience, will eventually have a currency for it.
The question is how do we add value to that currency, and the answer is, through trading.
Two reasons:
No incentive for promoting steemit, can be fixed this way: https://steemit.com/promotion/@lasseehlers/1-lifetime-referral-reward-on-steemit-does-that-sounds-good-in-your-eyes-suggestion-for-the-devs-and-the-witnesses-implement
Centralization of Steem, the Steemit Inc wallet... I know that the owners of Steemit INc will not like what I write now, but its the truth and my earnest opinion, and someone got to say it!! : The Steemit Inc Wallet needs to be burned or distributed among all steemians... it just does not make sense to invest in Steem when 46% of Steem is held in a central wallet... Also the steem needs to be spread out to alot more people.. I dont care how... but it needs to happen before more serious investments will come to Steem..
Before those 2ish issues are fixed, the steem price will only go one way and that is down! So if you want to keep your value you need to sell now, that is the truth.
Mark my words.. popular or not.
Lasse
PS: Resteemed.
Referral system does not solve this issue, since the issue is not based on lack of users. We already have many users. It's based on lack of value and economic activity throgh Steem.
That won't do any good. The majority of the inflation doesn't come from the @steemit wallet, but from the authors cashing out their Steem or SP. Many authors here are full time bloggers, and they cashout their money to live on it. We the investors are subsidizing their blogging technically, which is fine ,but just pointing out.
The spreading out of Steem is nonsense, it will just make things worse and the price will collapse even faster as everyone would sell it. Plus it's a Marxist/Socialist argument, and I don't like that.
No the problem can be fixed as I suggested in the article. By creating APPS that make use of the Steem as a currency.
The user activity has also been dropping, check the stats at SteemPunks, if you like. The user growth have also been dropping dramatically. Steem is already prepared for a promotion system with a referral program, so I believe it will come in some form at one point.
What I meant was that the steem needs to be spread out to more users in a natural and market-ish way. I agree that just burning the Steemit wallet or spread it out is not sound economics, I don't have the answer to this problem, other then that the steem need to be spread out before intelligent investors find steem attractive. So I guess the only real way is for the Steem price to fall even more and let Steemit Inc spend their Steem on development, first when that is done, will the price go significantly up again. Personally I am glad I didn't invest 1 cent in Steem, as I only see it crashing even more under current economics (I could be wrong of course).
Sure I am an Anarcho Capitalist, I don't believe in a forced wealth distribution, so naturally the Steem price only have one way to go and that is lower.
More users (though a promotion system or not) will potentially have a positive effect on the Steem price and more APPS too. I am not a big fan of more centralized APPs, but sure this will also have a small positive effect on Steem price.
I dont think you are an Ancap if you don't understand the concept of scarcity. The less Steem is circulating the better. Which means that the supply should be non-circulated , or the demand should be high.
Both sides can be tackled, but I prefer to increase the demand side, since the supply is already as it is. It's an inflationary currency, which in of itself is not bad. What is bad is that the demand is lower than the inflation rate.
I am an Anarcho Capitalist.
Centralization of the Steemit inc wallet scare investors and the lack of incentive to promote steem is the two biggest reasons the Steem price is falling.
They need to spend that Steem and they need to incooperate a referral program into the blockchain, then Steem and Steemit will flourish and the price of Steem will be going to the moon.
A referral program is good but it wont solve this issue. Referral system will mean more users, who will just register, and start blogging. So what that will do is to just make the rewards/users smaller, but wont change anything in the inflation.
Again that is a bad argument. Promotion of Steemit doesnt necessarly help, unless the new users are entrepreneurs who will do something in order to make the Steem currency useful.
What we need now is the entrepreneurs who will make 3rd party sites like shown at : http://steemtools.com/
That will incorporate Steem as a currency, in order to give utilitarian value to Steem. That way the demand will overcome the inflation, and the price will go up.
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