'Whales Paradise' Vs 'Useless Wasteland' ? and Demand Vs Supply fundamentalssteemCreated with Sketch.

in #steem5 years ago (edited)

Can the STEEM Price increase
merely by reducing the costs?

Ecosystem in trouble ...

Steemit and Steem (block-chain) are always called and emphasized as "Ecosystem", which is IMO quite a tricky term (because it has double or triple meanings). If it is "Economical System" - then perhaps economics are not going so well lately, as evident from latest official announcements and discussions on that as a reaction. I have previously already pointed out my own opinions (1, 2, 3, 4, 5) and concerns about this business model, that it is NOT exactly an "Economic System", but at most is just a "business model" and not very good one nor wisely ran. As well as that the people who keep talking about it as an "Ecosystem" are apparently are not very good at actual Economics. There are very few real Economists who has bothered to do research and analysis of Steemit and Steem. So far I have found only 1 such analysis (actually series of 5 extensive posts), done by @spectrumecons which I recommend very much: "Is the Steem ecosystem in disequilibrium?" (links on previous 4 parts are included in there)

Thoughts on ongoing debates about recent
announcement by Steemit CEO Ned Scott

I think many people know that few days ago Ned has posted the news about "structural reorganization" of Steemit Inc. Those who haven't heard or read about it yet, here is the OP. It has been Resteemed by many, also got a lot of comments elsewhere on web. Such as this: "Decentralized Social Media Platform Steemit Lays Off 70% of Staff Following Market Crash".

It has also stirred up many comments and opinions. One example here (video), good point made there:

... fundamental flaws of Steemit being basically a "Whale Paradise" and a "Useless Wasteland" for many new users who joined - can't be easily reckoned with. and a rise of alternative Social Media blockchain platforms may of course question the long-term survival of Steemit. especially if they can not compete Financially with {those} newcomers.

whales paradise

Here is another one, notable:

Obviously, this is SCARY! because this is a very well known token out there on the market... and if they have fallen so much ... that is how BAD is getting!

Some other people openly express their disappointment and outright final decision to stop investing into STEEM. Similar thoughts expressed on Steemit too:

Steemit like ghost town now, I don't want to think too much if Steemit will go down with all the problems that occur ...

Selling price Vs Cost Price; Demand Vs Supply

On Steemit itself there are also a lot of discussions, first of all in the 600+ comments under the OP by Ned. There are some related posts too, like this one I was reading today. Which I started to comment on initially, but then decided to dedicate my own entirely new post to that. Because as I can see that a lot of people talking about mostly techy stuff, such as here, about nodes, costs of hosting, etc. However I do not see so much discussions about actual Price of STEEM coin itself. although in this post it was briefly mentioned:

Impact of Steem price. If you own your hardware then you can ride out low prices. If your rent it you are committed to fees every month and may need to power down and sell to meet those costs.

Let's clarify: more exactly it looks like here it is rather talk about "COST price" of STEEM coin. however cost price itself doesn't necessary helps to boost up the SELLING Price of something! I mean, cost price (to produce / manufacture, transport, store, etc) of some product, although important part of the Selling price - is not the Selling price. it is merely a cost of expenses to make that product and make it available for buyer. while actual Selling Price of a Product also includes the "profit margin" (which includes various other things). better / higher Selling price is influenced by Demand! and in regards to Crypto, such Demand for any cryptocurrency and in particular to this STEEM coin - is dictated or determined by the Volumes it is being Traded on on Exchanges! and there on Exchanges Demand can be influenced by what? perhaps one of factors - as a speculative asset (with high volatility and price fluctuation). another thing is - if such coin is being actually USED (be it a unit of value storage / savings; or as money; or as Utility token somewhere) and therefore DEMANDED by those users.

supply demand

Cost Price itself is merely about SUPPLY! but in business, it is rather DEMAND that drives Selling Price up - not the Supply! although yes, Limited Supply may add to the increase of Selling Price. however in case of STEEM - there is no lack of Supply, perhaps can even say that there is "over-supply", i.e. Supply overpasses Demand by a LOT! which is being translated in the ... Decreases of the Selling Prices. So, it is quite amazing that people keep talking about all such techy stuff, which addresses mostly or only the Cost Price and Supply - but do not discuss anything or very little, about DEMAND! while at the same time they all are rather in fact concerned about the SELLING Price of the STEEM coin!

But hey! then apart from discussing the various ideas about "reducing Costs" (that's what mainly Ned's post was about) - there is an URGENT need to talk about THAT part: about the how to increase the DEMAND! so that more people on Exchanges would actually WANT to buy more STEEM - in that way driving the price of it higher. I mean, it is practically almost unreasonable to keep talking about how to solve the problem of Falling Selling Price, which is the result of DECREASING DEMAND - through the ideas of Increasing Supply! even IF the Cost Price of the coin would be reduced - still, without Increasing Demand, the Selling Price would merely be that much, around that very Cost Price. isn't it obvious? :D

demand supply

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Hi @vimukti-ananda

Finally I managed to find siome time to reply to your comment in my recent post related to delegation of 1200 SP. Please go and check it out :)

Thank you one more time for reaching out to me. Hope you will enjoy my little support and delegation of 40 SP.

My efforts has been supported by few people and I would like to ask you to give me small favour. What favour is that? Nothing big really. Just open link below and add it to your favourites (if you don't mind).


You may wonder what the heck is that? I created this account to follow those few people who delegated Steem Power to me in the first place. Without them I would not be able to support you.

Since they are all passionate about crypto, I decided to help them get new followers and bring more engagement to their posts. So this link is nothing else but newsfeed from their accounts.

I would love to ask you if you could start building your engagement on Steemit from visiting this page and showing your support to them. Anytime you can. Just drop an upvote and some valuable comment. Those guys are really worth our time and attention (plus they are all very responsive).

Every few weeks I will be monitoring who is engaging with them most and personally I will give those people my extra attention. That's my idea. I will do my best to reward those, who are supporting those few delegators.

So it's a win-win situation for everyone. You can get some delegation and support, they will get more traffic and I'm building my influence (since I'm right in the middle of all of it).

How does it sound? :) Hope I can count on you.

Have a great day ahead,

dear @vimukti-ananda

are you still around?

I just had a chance to re-read your post @vimukti-ananda

I like how you approached this issue. After all it's all about demand vs supply.

One problem I see is that most cryptos/ICOs out there need to cover their own operating cost in fiat currency. which makes it very difficult to plan future.

If your rent it you are committed to fees every month and may need to power down and sell to meet those costs.

Best solution would be to find a way to rent hardware and pay with STEEM. The way miners are being paid with bitcoin for their "work".

it is quite amazing that people keep talking about all such techy stuff, which addresses mostly or only the Cost Price

Well, the fact is that most supply would be coming from Steemit Inc. and @ned powering down and selling their own huge reserves to cover those cost.
Higher cost = more they have to sell. And if price of STEEM is low then they are forced to flood market with cheap STEEM. So cutting cost = cutting supply. Isn't it?

about the how to increase the DEMAND!

There is only one way. Include adds on Steemit. Bring businesses and make it a bit like facebook. Perhaps even sell our data to corporations. No other way. Or at least I dont see any other way.

ps. what is your background? economy?

Again, great read.

Dear @vimukti-ananda

I didnt see you posting anything in very long time. Are you okey there? Hope you didn't give up on Steemit completely?

Hope to see you here again one day.


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