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RE: Truth and fairness vs popularity. What to do when a post that says another post is wrong and gets more reward than the original post, which was the one that is correct?
The one you think is incorrect is in fact correct. There is no compounding of interests. The reward you get for curation isn't "interests". Interests are a very specific form of income on deposits that doesn't require any form of action and is entirely passive.
I am not obsessing over exact terminology of simple interest vs compound interest as for a one dimensional bank loan.
My point is that steemit is multidimensional, not one dimensional. And that SP is a compounding asset as long as you are active in the community.
An objective way to measure this is that given the same level of activity to the identical set of posts compare the amount that someone with 1 SP would get vs. 100 SP. The latter would get more, right? If so, it is compounding (in the presence of engagement with steemit)
STEEM is a depreciating asset, like a car
SP is a compounding asset, like nothing else I have ever seen
vests are internal and not really relevant, but the nominal amount of vests increases while it compounds in value
Words carry meaning. It's important to use the right words to convey valid meaning when communicating with other people. When you are talking about interests, 99% of people will understand that you are talking about passive fixed income on deposits.
I'm not disagreeing with your point at all. I agree that you can have snowballing compounding returns on the principal if you are active in the community and good at what you are doing be it posting, curating, market making, mining or being a witness. But these returns are not coming from passive ownership of the VESTs but from active work in the community. There is a limited amount of rewards every day, and competition to obtain these rewards. The better other people are, the harder you have to work to beat them. Content has to be better and better to receive attention. Finding new premium content requires to actually read posts if you want to beat the bandwagon. Market making has always been a cat and mice game. Mining is doomed to getting increasingly hard. And being a witness is quintessentially political and you need to campaign, lobby whales and pose a lot to keep your position. As you see, it's really not all that easy to increase your stake by participating in the community. Now, the competition is low and it's sweet. But that won't always be the case.
But that's not what the author of the "it's easy to become a millionaire with Steem" post meant. He literally meant that all you need to become a millionaire is let interests (passive fixed income on deposits) compound while you are sitting on your a##. Well, that's not true because Steem doesn't pay actual interests on vesting Steem deposits. The only thing that Steem does is to hedge at 90% your deposits against inflation. Because you are still exposed to 10% inflation, if you are sitting on your a##, your percentage holding of the network is actually decreasing, and this decrease is the thing that is actually compounding. So if you had say 10% of the stake and do nothing for a year, at the end of the year you have 0.1 / 1.1 = 9.09%. And the next year 0.1 / (1.1^2) = 8.26% etc. In fact this is not entirely true because inflation is a fixed amount of Steem, so the inflation rate is bound to decrease over time as the ratio of the dilution over the total is getting smaller but this is irrelevant to this argument.
Of course, even if you do nothing and get diluted, since this dilution was used to promote adoption of the network and create quality content, the value of the network will have increased following metcalfe law and the value of the intellectual property it holds will have increased too. So you may end up having more in dollar terms. But this has nothing to do with compounding. These are capital gains, and as such are of a speculative nature that it would be misleading and desingenuous to call "easy money".
But anyway, that's not what you were saying and I generally agree with your post expect for the part where you think that @bacchist is wrong. He is not. He is spot on right in his analysis. There are no compounding interests that will give you a risk-free and passive fast track to becoming a millionaire, this is a completely groundless idea wielded by someone who doesn't know what he is talking about. To be a Steemit millionaire, you'll have to take risks with your money by speculating, be smart or work hard to provide value to the network and be rewarded.
I think we are all saying the same thing. SP is a compounding investment assuming you are active in the community. I am not saying SP pays compound interest, but rather that it is an investment that compounds.
Like stockmarket DRIP is a compounding investment. Many are hung up on mapping this compounding to bank deposit account behavior, but that is like mapping a 3 dimensional object to 1 dimension, at best you get a limit approximation, at worst a totally different idea of what it is.
So the tl:dr is that SP compounds but only if you are active and it is not like a passive compound interest instrument.
Sorry but you are incorrect!
You can twist the terminology but that is irrelevant. The math is quite clear as I have explained in the various comments here and at @bacchist's incorrect blog post.
You are really not doing yourself any favors by being a math retard and then writing incorrect posts because you don't realize you are a math retard. I suggest you do a little bit more reading and less writing about things you don't understand well.
Would it be possible to have conversations like this without reverting to name calling such as "math retard"? From an outside perspective, it weakens your argument to an emotional one, not a rational one. It probably doesn't do much for your reputation either. So far, I've enjoyed a lot of really great discussion on Steemit, but this is the first one I've seen with so much juvenile behavior.