RE: Announcing Steem 0.14.0 Release Candidate
I'm undecided about the vote power change, but I wanted to respond to this;
Under this scheme, the big whales will need to sell the max on exchanges every week and other people buy their Steem for any real redistribution to occur. That will hold down the price and our competitors will zoom right by us.
This is absolutely what is needed. There is no substitute for redistributing the stake if you want a fairer system with less concentration of power. Even if every whale did this (and they aren't) and even if it were at the maximum rate in all cases and completely uninterrupted (which it isn't), it would still take a full year to redistribute half of the whale stake.
This maybe isn't what people want to hear in terms of trying to drive up the market price but this is the bitter medicine that Steem/it needs to thrive more than anything else.
FWIW, I happen to believe that the path to higher market prices comes from increasing demand by creating a better system -- including a better distribution of stake as soon as possible (which as as said above, still isn't particularly soon) -- and not from trying to reduce supply by holding back redistribution. If the path to a successful outcome is clear, the market will reward that with higher prices, regardless of the amount of whale selling going on (or indeed because of it).
"There is no substitute for redistributing the stake if you want a fairer system with less concentration of power", i strongly agree with this. From the outside, people see the platform as a clssic MLM strategy disguised in a a social media platform. The see it as a scam. For us who trade at polo, its really hard to sell the idea... i think this platform is revolutionary, and the only thing that makes people to hate it is becuse of its distribution. Its a caste system rulled by whales. Which reminds me of NXT which had all the fundamentals to succeed but did not, because of how it was distributed from the start.
@tjpezlo
Bam!
Smooth, good point and I mostly agree with you. It's a fact that selling is the main way to redistribute, since voting simply generates more curation rewards for whales. But I've worked with a number of large whale accounts on curation lately and I've admired what you are doing with your own curation also. If there's no reason to vote much and stick around, then I think it would be a loss for Steemit to have the large accounts staying dormant and simply selling the max when they could be actively using their scale for good work.
Plus, if you really want this platform (and your stake in it) to succeed, then you have incentive to build it, and I would hope that you are spending some of your curation rewards to make it better for others. That has the same net effect on redistribution as selling does.
Every economic system has its rich and poor; Steemit at least gives the poor a chance to rise. Redistribution can occur at those middle levels, too. It would take so long to fully redistribute resources that I'd rather you guys just continue your good work and help the platform that way, while selling some of your gains. If there's no reason to vote and stick around to make it better, then the max selling is about the only activity we'll see.
Both are useful: Literal redistribution (by the largest stakeholders selling) and voting with an intent toward widening the base of rewarded posters. But rewards themselves themselves are relatively modest.
A total of about 20 million Steem will be given away in rewards over the next year (57600 STEEM per day x 365 days = 21024000 STEEM; for simplicity we can assume that curation rewards have been entirely eliminated and this all goes to posters), while 180 million is distributed to existing SP holders (mostly whales) in the form of antidilution payments. That will make the supply about 320 million, of which 20 million will have come in the form of rewards. Some (in fact a lot) of those posting rewards go back to current whales (think about this the next time you are voting up one of Dan's posts, or mine should I make any) or to established, successful posters.
Nearly all practical redistribution must come from selling.
I agree with everything you said about the improvements to curation that have already been happening. I very much disagree with the constant shifts in the rules just as people are starting to work within the existing rules and we haven't even seen the results of those efforts yet (for example the new Project Curie program). The constant tweaks create way too much uncertainty for those trying to build initiatives and business models that are reliant on the platform rule set. It is for this reason I have already curtailed some of my investments into curation-based initiatives. Not only this change, but potentially others that may be coming soon (see Ned's reply) make it an unattractive environment to try to operate.
I cannot agree enough. This was the same problem experienced with BitShares as projects that were building applications for BTS suddenly were informed that the rules/code had changed.
Moonstone is but one example. The abrupt changes from the onset, up until Dan chose to focus on Steemit, set them and others back and completely eliminated a few projects altogether. I think it's safe to say that a large portion of the BitShares Community was not pleased with what appeared to be an unhindered desire to make drastic changes to a system many felt was fine as it existed.
Whether or not the changes were ultimately the best decision for BitShares the platform, the Dev's or the Community is completely subjective and an entirely different discussion from how those changes affected the projects attempting to build upon the platform as it existed.
While I agree that changes need to be made to create the best system possible, I feel that those decisions should have been made prior to a public release and especially prior to allowing any third-party to begin building applications around the platform.
Slapping "Alpha" and "Beta" next to a logo, while still pumping the platform to the masses in the press is a bit spurious. On one hand it allows the Devlopers to say, "Well it's still in alpha/beta". On the other hand they are out there pushing this alpha/beta onto the masses inviting them in before the basic structure of how the platform will work has been settled.
Some may argue that they need that wider user base to determine what changes need to be made, and that may be the case. But at the same time the types of people that are being invited in (no offense to anyone) to this alpha/beta platform have no clue what they are getting themselves into most likely and I feel that the Developers are well aware of this fact. If they aren't, then that's ... well I'll just leave it at that.
And at the same time you have companies attempting to build their own business models around an ever changing set of rules and they are being invited to do so. Those companies are of course assuming all of the risk themselves and can choose not to build upon the platform until a more stringent set of rules are adhered to for longer periods of time, but there are no guarantees on that either, as we saw with BitShares.
I'm sorry to say that I don't have a solution. This field is not my expertise. I'm merely offering up my observations from the past/present and how I see things unfold, and how I see the same scenario playing out once again at Steemit. The good news is, it can only get better (I hope)!
You make a good point that selling is the most effective way to redistribute. The problem is, what is the incentive to buy if the curation rewards are restricted to 5 votes a day?
@smooth But surely the "meat" of the curation award is really in voting and then having a lot of people voting after you. If no-one is voting after you, you might as well use your five votes voting on your own stuff. Restricting the votes defeats the whole point about crowds discovering good stuff together by voting.
@alyssas it is 5 more powerful votes per day. Also you can vote more often if you voluntarily reduce power per-vote using the slider. 10%-power votes after the change will be about the same as regular votes now.
I think people are getting a little confused. Of course the changes are somewhat disruptive, but we have to remember that the 5 votes are really just 5 more influential votes per day, as @smooth reminds us. We can still vote all we want. It just becomes more diluted as we vote, which is not much different. The only difference is that our 5 votes we actually have some control over. Which I don't know. I think that's cool. It makes me feel dolphin-ish.
So are you saying that you feel increasing the supply of STEEM on the market will increase the number of new investors? IIRC, you've stated repeatedly for months that few new investors existed.
Do you now feel that a lower STEEM price will make new investors suddenly want to grab it up?
Personally, I don't see people saying, "If only the price of STEEM would go lower, then I'd get on board!".
Where were they when the price was at .30 cents? Although debatable, I feel that not that much has changed in the platform between now and then and generally people don't like catching falling knives.
IMHO, a lower priced STEEM will simply be grabbed up by the existing true believer whales at the lower price after selling off their STEEM at a higher price. I'm fairly certain that's what most of us that believe in the platform are doing. But I don't see many big new investors coming on board.
What may be considered "big investors" that are coming on board are simply posting for thousands of dollars per day and powering up or cashing out. I don't see those accounts buying STEEM. In fact, I see them basically defending themselves to anyone questioning them for being here by boasting about how they've put nothing into the system out of their own pocket.
I'm not necessarily disagreeing with you that the scenario you describe is what "should" happen, if others saw Steemit the way we do, but I am simply pointing out what "is" happening from what I can tell, and the perception of others is usually entirely different from those of us that have been here for a while.
Tuck your words continue to be wise and sharp. I will keep following your commentary wherever it may be~
Thanks~*~
I'm the village idiot. Be careful my friend. ;)
Every single trade has a buyer and a seller. Unless you think that whales are going to buy back their own or other whales' coins (IMO not a chance, and certainly the evidence with 95% of whales powering down doesn't suggest it, but I guess you disagree), any selling by whales can only improve the distribution. Mathematical certainty. It may (and perhaps probably will) happen at lower prices, but it will happen.
If it turns out that you are right and only existing whales want to own this coin, then we are dead. There is no way to improve the distribution it will simply collapse into one big circle jerk singularity. The last remaining whale can autoupvote his own posts all day long.
Also, yes I have said there aren't many new investors. This coin is unfriendly and unappealing to speculators, who are most (but not all) of the investors in the crypto space. Whether that is by design based on an anti-speculator philosophy or an unavoidable side-effect of other design requirements, I can't really say, but it is clear that many speculators pass it over (as they should IMO).
There are some long term investors who appear willing to buy in and power up. I guess we have to hope there are enough of them and they continue to find it attractive. No other practical method of redistribution exists. I debunked the notion of meaningful redistribution via rewards alone over a reasonable time period in another comment here.
Only a whale with little to no belief in the platform (or lacking the funds to do so) would not buy back his/others coins at a lower price. I believe (and again, this is simply my own perception of the current situation), most whales are overtly aware that the price was much higher than it deserved to be (as I've pointed out elsewhere on Steemit) at this early stage due to the FOMO effect combined with a well timed pump capitalizing, like every new coins shrewd investors do, on imprudent investors.
I would have to say, of course they are! Who wouldn't sell at .007-.002 if they perceived, through experience in this cryptocurrency ecosystem, that they could buy back at a fraction of that price in a short period of time? Obtaining the same amount or more coins, while also being able to gain more BTC or fiat currency, is a no-brainer for many.
I would have to surmise that most all of us with any experience in the cryptocurrency ecosystem would, and therefore think that most all of us are doing just that. And in that line of thinking, it ends up being a self-fulfilled prophesy.
If I assume it's going to happen, I must be assuming others are also considering the possibility, and as the number of people who notice the trend accumulate, it happens.
That being said, I would also not have been surprised to see STEEM rise to $10 during it's climb. The problem it encountered was the one you brought up back then and continued to do so for some time, the lack of new investors. And by you bringing up that concise fact, repeatedly, I feel it in itself contributed to many people realizing the time had come to begin selling off to buy lower or otherwise.
I'm not suggesting that you caused the price decline, I'm simply expressing that wise investors reading another wise investor voice that opinion simply reaffirmed their own feelings that the bubble was about to pop. And when that feeling happens, those wise enough tend to want to get out before the others. It's a completely natural cycle as I'm sure you are aware.
lulz, you've summed it up nicely there. Of course I hope that is not the end scenario, but currently I see no evidence to the contrary. There is plenty of time for that to change though. We are in the very early stages of Steemit. One change can at times whip up a frenzy in the masses and new investors come flocking, even if for a quick in-n-out.
Generally when that moment happens it leaves the price 10%-30% higher than it previously was and then the project either continues to build or it goes stagnant and ultimately dies from lack of continued innovation.
I don't think a lack of continued innovation will be the case with Steemit, as testified by my post concerning too many changes too quickly may be a problem. It's a balancing act that no Dev team has yet perfected, and how could they? No one is perfect and no one knows what the others are thinking at any given time. That's what makes this so much fun! :)
We're all just speculating. And at times, people are saying things to make others contemplate what's been said. Those reading others thoughts are left for themselves to judge why anyone is expressing a certain opinion at any given point in time and act accordingly. Gaining as much information as possible from others is never frowned upon. :)
@tuck-fheman
Most whales are highly overinvested. That is why 95% are powering down. They may, at some point after lightening their holdings, buy back at a lower price. That certainly possible. The best thing that can happen is to get that point as quickly as possible, not discourage or avoid the selling that is absolutely necessary to get there and in doing so suffer the many disadvantages of a horribly broken distribution any longer than necessary.
Selling when one is heavily overinvested in a single asset and not buying more is not indicative of having no faith in the platform. Nor does it indicate a desire to sell off ones entire position. Everything in moderation.
I agree with you that there is no lack of innovation, and there may well be a rapid and significant influx of new investors leading to significant price increases including when least expected.
OK. Then what is it indicative of? Do tell.
@donkeypong @smooth I'm against this new 5 vote rule. I think it won't solve the power concentration problem, only make it worse. I think trying to "patch" the current system won't do it either, a new solution with a fresh start to the power distribution must be sought or the platform will wither and die, and competitors will just fly past... I wrote an article that you may find interesting based on the anthropological approach of the disrtibution of power in a society/ecosystem https://steemit.com/steemit/@webosfritos/thoughts-on-steemit-power-distribution-and-steempower-an-anthropology-based-approach which at the end of the day is what's happening here, nothing new, this type of problem has cursed human societies and structures since the dawn of time.