Is There a Possible Scenario That Steemit.com Can Get Shut Down?
Introduction
Fellow Steemians, I am very sorry I haven't been posting lately. As you have most likely seen, I have been really busy with campaigns, including the very successful Chicago Billboard Campaign. Back to the chase, as you have read in the title of this post I will be explaining my reasoning on how there is a possibilty that Steemit.com can shut down. This is an open discussion and I 100% want to hear your opinions.
Where is the money going that is "secretly" taken out of your blogs during the day?
On my Chicago Billboard Campaign I noticed I was losing money while gaining upvotes. At around 8:00 CT, the post was at around 7,400 SBD. At around 11:00 CT, the post had dropped to around 7,200 SBD with even more upvotes!. Before the payout, it had lost 400 SBD and paid out at 7,004 SBD with even more upvotes!
I have noticed that this has happened numerous times before on my own posts. The thing that gets me the most is that it doesn't say anything about the lost money in the payout.
Can someone who know's the answer please explain to me where the other portion of SBD is going?
Steemit.com is not decentralized.
If you were not aware, Steemit.com is not decentralized. With that being said there could be a huge load of problems.
What does decentralization mean?
Decentralization is the process of redistributing or dispersing functions, powers, people or things away from a central location or authority. This means that when something is decentralized, it keeps the government out from interfering with transactions; can not take taxes out.
What does centralization mean?
Centralization is the concentration of management and decision-making power at the top of an organization's hierarchy. This means if something is centralized the government can do whatever they want to do with the centralized network. If they choose too, they can shut down Steemit.com because it is centralized.
What does this mean?
This means that there is a chance that the government can shut down Steemit.com . They can't shut down the blockchain because its decentralized. Although, if Steemit.com gets shut down my prediction is that Steem will be worth less than 10 cents. I predict this because keep in mind that Steem is greatly based around the social media and if the social media fails, nobody will want any part in Steem. To be honest, I might not invest any more money into Steem until it becomes decentralized (if they are planning on it). Since there are 3+ blockchain based social medias coming out very soon, if one or more are decentralized, you already know those will be more succesful than Steem and I will be investing into those.
Analogy
Image Credits
Currently, Steemit.com is like the late 70's computer video game, Asteroids.
The spaceship in Asteroids is the government and the asteroids and saucers are the centralized networks. The objective in the game is for the spaceships to shoot as many asteroids and saucers they can.
Image Credits
With the following being said, when will the Steemit.com asteroid be shot down by the Government spaceship?
Please let me know your opinions on Steemit.com not being decentralized and if you guys have had/seen or have an explanation on why and where the money goes that is taken out of your post during the day.
Rewards Fluctuations
Your post didn't "lose" value, though it may be perceived that way. It says potential payout for a reason: it changes moment to moment based on activity across the entire network.
Each post has a specific amount of "reward shares" it earns every time it's voted on. The amount of reward shares is determined by the strength of the voter. The reward shares are an entitlement to a portion of that day's total payouts.
The limits here come from the fact that a set/limited amount of SP/SBD is generated every day. The more people earning these reward shares, the more people end up splitting the total pool of rewards for that time period. The post you specifically mention going from 7.4k - 7k isn't because your post is losing reward shares, it's that other people are earning reward shares, thus decreasing your percentage of the overall pie.
Votes aren't worth SBD rewards, they are worth "shares" of the overall payout pool. Think of it sort of like pool mining... the more hashes you generate, the larger percentage of the block (when found) you'd get. And if someone else starts mining harder than you, the overall percentage of your contribution decreases.
Decentralization
I'd argue against your "steemit.com isn't decentralized" statement. You could download the source right now and run the website on your computer. In fact, I know there are a few other web sites right now running the steemit.com source code, seeing the same information, and participating in the same blockchain.
You could shut down the servers running steemit.com, but that wouldn't stop steem. Steem is decentralized, it's running on hundreds of servers. It also wouldn't stop site's powered my my project (steempress.io), like jesta.us. That's reading the same blockchain data as steemit.com and participating in all aspects of steem.
It's amazingly decentralized. The only problem right now is you're only seeing one website, probably because this project is only a few months old. There are others (like myself) working hard to bring new platforms into the ecosystem to further decentralize the systems. It just takes time.
But in the end, if steemit.com got shut down, nothing would stop the content from propagating on the blockchain, and other websites forming around it. The genie is out of the bottle and can't be put back in.
Well said!
Hah, you found quite the old comment!
Yeah, I was searching around for info on Steem, then realized how old it was :P
Still holds true :)
I really appreciate you clearing this up for me! You answered my question fully. Thanks Jesta know I know! :)
Honestly, I would imagine the US government would shut down Steemit over failure to do accurate tax reporting and following backup withholding guidelines associated with paying subcontractors. It's something I am planning to blog about.
Please do! :) I will be happy to read it.
The payout is not fixed, but dependent on the ecosystem as a whole.
As your post gets more votes, it 'earns' more shares. The shares are used to make a claim on the total rewards pool (today its around 100k steem, you can see it here).
I think what happened to your post is normal - other trending posts earned shares while yours already got all the votes. Thus your post lost some of its claiming power as shares on other peoples posts went up.
I appreciate the explanation, I have a question though... Is this in the whitepaper or where did you get your information from?
Its my guess. I don't know if thats 100% how the system works.
Another possible explanation is the the tanking price of STEEM. If the price of steem crashed by lets say 5% while your post was pending payout, the total dollar valuation would be lower, even though the amount of STEEM you're getting is the same.
Thats a well educated guess, I will keep this in mind.
So when my post says 7 cents I get 7 cents of value from the network ?
afaik 7 cents is just an approximation, for how much your estimated reward is worth. The point is, if it says 7 cents, it doesn't actually mean you're guaranteed to get 7 cents.
The payout #s are only estimates, they will fluctuate. On the point of Steemit getting shut down, that is possible but all Steemit or anyone if the company is no longer around is start their own website that interfaces with the blockchain which will be much harder to shut down. The Steemit website and others like it are just gateways to the blockchain where all the posts and votings are stored. Steemit.com shutting down would have an effect on the valuation/pricing of Steem as investors react, but it could still recover.