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RE: Steemit Money: Who Is Cashing Out? Who Is Powering Up?
To me, the only way this one makes sense is if the value of Steem permanently crashes in the future (and was intended to do so) and those who invested later can't get their value back out. If the value does go down, it could also just be seen as a failed investment.
Remember that value alone is not an indication because the number of STEEM one has may multiply if they are power up. So what we are looking at is our holdings value. Obviously if you have 1000 SP at 2$ and 10.000 SP at 0.3$ you don't care about the price "crashing" because you've compensated by the increased amount over time.
Thanks a great point, thank you @alexgr. When I say permanently crashes, I mean closer to zero, but your example brings up an important point in that the price per STEEM can go down significantly, but if the amount of STEEM you can obtain via Power Down is increasing to the point where you could still sell (even at the lower price) and regain your value, you'll be good to go. The issue, I think, would be the potential for a downward spiral. If more people have more and more tokens that are going further down in price, the demand might get even smaller which would further shrink the price. It's going to be very interesting to see how this all develops over time.
Yeah I think the "close to zero" will never manifest due to
a) low liquidity of liquid steem
b) it would allow the purchasing of all steem at ...near zero cost - and by extension the control of the platform at ...near zero cost.
It would take a serious flaw or a very strong competitor to allow this to happen. Otherwise I'm not particularly afraid of the ever diminishing price / downward spiral, as a buyer will also have to buy an ever-increasing amount of steem tokens to acquire the same voting weight.
I think the biggest hurdle, as time evolves, is the ability of the platform to scale its rewards. This is a crucial point for the platform to succeed, but I'm skeptic on that department due to marketcap being unable to follow the explosive growth of the userbase.
The userbase could go 100x to 5mn, but can marketcap go 100x to 20bn, so as for rewards to stay consistent? I think not. Even at 10x (2bn marketcap), with 5mn users we'd have /10 rewards among the users, because they'll have multiplied x100 while the reward pool only increased by 10x. So that's an issue.
Yep.
The interesting thing about the marketcap number is, to me, it's not a "real" number. Unlike the other cryptocurrencies, those coins are not liquid. So, given that the number isn't real, I can imagine it going quite high using the current mechanisms for calculating the number. If you just use liquid STEEM, the marketcap looks much smaller and 100x may not be that big of a deal. I also don't think the rewards will stay as high as they are now, but I'm hoping for more $5 posts instead of a handful of $15k posts and a sea of $0.01 posts. As the Steem Power gets distributed around, I think we'l see this happen more. I'm also okay with the approach because it means early adopters would be rewarded more for the risk they took.
@bacchist wrote a good post on the marketcap number you might like.
This is a great point. If the price were to ever get too low, the cost to purchasing substantial influence would be trivial. I think the site has already grown to the point that influence over the front page would be worth a lot to some people.
Exactly.