Let's face it - #newsteem does not work

in steem •  last month 

Hello everyone,
HF 21 (as well as the accidential HF22) are now behind us and the blockchain is running as smooth and stable as ever again. EIP is working as well and the first proposals are being paid out. Bidbots are taking a massive hit and manual curation has become the new trend. And best of all, Steemit Inc. has stopped its program trading (i.e. selling) for a month. So all is looking just nicely - the problem is just - it does not work!

The way it should be...

In an ideal world, Steem would attract great content producers, because they realize that they can earn better money than on the likes of YouTube. These great content producers would bring new users to Steem, some of which would also like the idea so much that that they invest into Steem. This would result in an increasing Steem price, which in turn would increase returns for content producers. This would attract additional high quality content producers .. a virtuous circle which would help increase the Steem price to the moon.
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...but shit ain't like this

Unfortunately, this is not how it works. Indeed, we are in a viscous circle, that continues to drive the Steem price lower and lower.

Let's look at the facts:

  • Steem currently has a market cap of 55 million US Dollars.- Inflation is currently at 8.2%, so the available amount of newly issued Steem is around 4.5m US Dollars.
  • Of this amount, roughly 65% or 2.9 million US Dollar belong to the content producers
  • This amount is shared 50/50 between content creators and curators, so the amount of available for content creators is roughly 1.45 million US Dollars.
  • This amount is further reduced by the payments to the bidbots, which are reduced in importance, but not dead yet. Let's see how much they money will flow to these in the future, but I would estimate that the amount at the moment is still north of 0.2 million US Dollar annually at the moment. This leaves the amount of rewards to content producers to roughly 1.2 million per year.
  • This means, that only about 3000 US Dollars per day are available for content producers. Further reducing this by self votes and circle jerking votes, I would consider it likely that not more than half of this is really available to content producers. This means that at the current moment, Steem has to offer only between 1000 to 2000 US Dollars in content creation rewards per day.

Comparing this to the rewards you can earn at other platforms - an "influencer" with 10,000 followers is said to earn as much as 100 US Dollars per posting, somebody with 1 million followers even about 12,000 US Dollars - this shows you that it is simply not attractive for any successful content creator to publish exclusively on Steem.
The result is, that the Steem blockchain becomes less and less attractive for content producers - and thus also for readers.

Additionally, the weakening Steem price makes it more and more difficult for any type of project to survive on Steem. As a consequence, they will tend to sell the earned Steem as quickly as possible in order to make sure not to be diluted by a weaker Steem price.
image.png

So what can we do to break this viscous circle?

At the moment, rewards for content producers are so low, that we have hardly anything to lose. Content producers who are here today are so mainly for the community - and not for the rewards. Most of them are invested anyway, so they would most likely earn more from a higher Steem price than they would lose from a lower inflation. I would therefore suggest once more that we reduce the amount of inflation by at least 4 percentage points. We would than be on a similar level as Bitcoin is today. I am sure that this would result in a higher Steem price.

The second element is the amount of Steem that is sold on the market for fiat or other crypto currencies. Of course, we cannot force anybody not to sell their position - but we can of course make suggestions. I think the decision by Steemit Inc. not to sell any Steem this month is great - but it is not a sustainable solution. The problem is, that Steemit Inc is not fully funded. They need the income from Steem sales to fund their operating costs. Unfortunately, their costs are not in Steem but in fiat. So if the Steem price is low, they actually need to sell more Steem to cover their costs. This is the opposite of what you should do - buy low and sell high. So my suggestion would be for Steemit Inc to seek typical venture capital funding - or to consider a block deal with an investor, which would allow them to cover their costs before reaching a sustainable income level.

Will any of this happen? I am not sure - but I am convinced that it would help to overcome the current phase of weakness.
What do you think?

Wishing you all the best,
Tim

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I believe what we would have to do is end the passive gain of just having SP in the account. Ensure the people you receive are content curators, content creators, and people who run the nodes.
I believe that if we did that we would have a dump of the dormant accounts that only come in to sell inflation profits, but I believe that in the long run it would be much more beneficial to steem's blockchain

The problem is that investors who constantly sell do put a constant pressure on the price. Once people realize that the sell off is over, prices can increase again.

I couldn't agree more, that is why I didn't see any penny that I have.
Cheers!

I sold half of my position to bitcoin over the last 18 months - lucky that I did

All these #newsteem folks seem like sockpuppets who got some steem to me...

Dunno why, but they reasoned that #newsteem would be way better than #oldsteem but didnt count in, that we need new money inflow to make that happen..

Instead the one with mote power got even more about this little platform..

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You have said it all but if only the steemit inc will only listen to your suggestion or advice, it will be much more better

“We can not solve our problems with the same level of thinking that created them.” - Albert Einstein

I have a lot of respect for Dan Larimer; he is indeed a genius. In fact, it was his father, Stan Larimer, that got me interested in BitShares, Steem and DPoS. Brilliant minds!

I personally do not believe that the developers of Steem, nor the investors in STEEM, will ever solve the issues of this blockchain community, because I do not believe they have successfully identified the problems. Steem was supposed to be an experiment for building a social network on a blockchain, but the builders approached it from a financial and coding perspective. They did not, and still do not, adequately look at human nature, psychology and sociology. Facebook's success was, in part, due to the exploitation of social behavior and human relationships. This was supposed to be about challenging oligarchical capitalism, but we have ended up with the same top-heavy model; with just a few Whales having more power than all other users combined!

We keep trying to solve the economic part of the equation, but as Einstein said above, I believe that the same minds and the same thinking that created Steem, are continuing, as you rightly stated, in a viscous circle of not really considering things like human nature, human relationships and human expression. This is a platform dominated by developers and economists. The price of STEEM is not the problem; in fact, it's the constant focus on the price of STEEM that is the problem.

I think that this is the way Steem works at the moment - most people that are here today are here for the community. Money can hardly be an argument for most people. The good news is, that this is a sustainable level - but there is no growth. To be able to grow, we would have to offer something that the other social networks do not offer and which attracts a lot of people.

I strongly, strongly agree with you Tim! I would just add that first we have to offer what other social media are already offering, because we do have something unique. We need to make it easier and simpler for people to create accounts, and we have to be less rigid about the rules we want to enforce for posting. The Steem blockchain can handle unknown amounts of transactions, so why not put it to the test! We need to attract younger people. And Steemit, along with other Whales, should be supporting SteamPeak, Steem Engine and the Tribes!!!

Thank you so much for participating in the Partiko Delegation Plan Round 1! We really appreciate your support! As part of the delegation benefits, we just gave you a 3.01% upvote! Together, let’s change the world!

If only we could have a steady uptrend as we had a downtrend the last year, that would make things more interesting again for content creators. Fingers crossed!

That would be great - but I do not really believe in it...

!BEER

View or trade BEER at steem-engine.



Hey @rondras, here is a bit BEER for you. Enjoy it!