RE: STEEM Price Touches Historical Low, Steemit Users Number Increases Dramatically - Why Correlation Is NOT Causation
If one would try to connect the dots, or to use correlation as causation, will say that the influx of new users is actually dragging the Steem price down. I'm being ironic, obviously, and I'm also drastically exaggerating.
The influx of new users does not drive the price down but it is not driving it up either. There is so little demand in percentage term for steem power, my guesstimation from looking at exchanges wallet is that less than 1% of users are buying steem and power it up. This is because steem power is only useful to a few dozen people ( who mostly don't buy steem power), the large majority of users see no utility in steem power.
As long as influence is something difficult to obtain for the majority nobody is going to spend money to buy more of it. Until this is changed the price will stay low because the low utility of steem power puts a limit on the steem price, my guess is that when the price reaches $0.1 again people will stop buying because relative to the utility of steem power 10 cents per steem will be overvalued by the market.. If all the influence was given to the 99% the price will be blowing up right now, everyone would be buying crazy to have more power because they would see the direct result of their power up.
This also puts a limit on the number of users because if users base is growing while price is not then everyone gets paid less until it becomes not worth it anymore for some users.
That's a very good analysis. So what you're saying is that too few people can actually use the SP. Those who can use it are the whales.
What should happen in order for price to climb again would be a broader power distribution amongst all members, right? In your opinion, this is something that can happen very fast, or it will need a certain period of time?
First, the curve should be removed or flatten whatever you wanna call it, it serves no purpose and increases power concentration a lot.
Then if the influence is still out of reach for most users there are many differents solutions that could be implemented.
I'm speculating here but it seems like many in position of power would rather see their steem become worthless than giving up any power which is why any of those proposals have not been considered, most whales mined steem early so if they lose it all they would care a lot less than investors.
Myself as an investor I would give 100% of my power to random minnows and I know many other investors would too because it's the smart thing to do. I would only want to keep downvoting power in case the people I have given my power abuse it.
I am on the same line with you here. I don't even qualify as a dolphin, I guess, and all my SP is made by writing, curating and maintaining a witness node.
I don't think many whales are willing to give away their Steem because it was ninjamined anyway and they won't lose anything. My hunch is that they're just comfortable waiting until the INC makes some moves which will increase the value of their investment again. Sometimes we forget Steemit it's not even one year old.
I'm personally very, very curious to what will happen after HF 17, there are a few changes that may be game changers, especially the arbitrary splitting of rewards.
I see nothing in the roadmap that is addressing this. There will be a flattening of the curve in HF17 which is the only improvement that I see and I personnaly don't think it will have much of an impact on the price.
I said this multiple times but the system is out of touch with the reality, the average joe earns 1000 bucks per month, and steemit expect him to buy $ 100 000 to be a whale on a social media site with 5000 users lol, that means that 99% of users will never be a whale. People should be able to be a whales for much less than that, like 10 times less. This is why a flat curve won't do much.
No, there won't. They took it out. https://github.com/steemit/steem/issues/913
People who have been here for months, working hard, engaging a lot, spending hours and hours, are still not able to give 1 cents with their upvotes, if that doesn't tell you something is not working...
What is INC?
short for Steemit INC. Frequently used in chat :)
Hmm, this one is tricky. I don't see it as a "downhill locked" process. It is fluctuating. The first stage will diminish the average payment, but if enough people are jumping the train, it will also trigger demand, which will increase price. Then another plateau, and so on.
The "traditional" social media giants, Twitter and Facebook, evolved the same way. I can't count how many times I saw "the end of Twitter".
Increase in the number of users doesn't create demand, increase in utility of steem power does.
Increase in number of users will automatically trigger the need for influence (it's intrinsic to any social media platform) and the need for influence will trigger demand for SP.
Just my 2 cents, I may be wrong, obviously.
The influence you are talking about is meaningless to most users. I would argue that users who buy steem power now don't even do it for the influence, they do it because the price is so low and want an investment in this project but their primary motive is not to increase influence.
The influence is not a need, it is similar to upgrades and power ups in games, you can play the game for free but without these extra power options the game sucks.
This is correct, though as ive noted elsewhere, this increase is mostly fictional.
The real problem isn't that the influence is meaningless, its that you can't buy a significant amount of influence for a reasonable amount of money. Part of this is concentration of stake. Part is the amplification of that concentration by n^2.
Look at the biggest whales like @blocktrades or @abit or @freedom. How much would you pay for parity with them? How much do you think the average man on the street would be willing to pay.
Way less than the amount their steem power is worth, even at current ATL prices.