RE: Is Burning the Best Way to Save Steem from Inflation?
Good morning @dses and everyone else reading my comment
 | I brought some of you to this publication, simply because I wanted to know your opinion on discussed topic and I'm wondering if you agree with mine. |
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Burning is something trendy right now. And I'm fully aware that many people consider burning tokens as a way of bringing value (by reducing inflation) to token and somehow it supposely (by magic) should increase price of such a token.
In theory maybe that explanation make some sense, however this believe is fundamentally flawed.
Behind selling pressure are always those users/investors who care about profiting/cashing out their rewards. Those people obviously will not burn their tokens. Why would they.
The very only group of users promoting idea of burning part of their rewards are the same ones (believers), who would otherwise most likely power up those tokens.
So let's ask ourselfs a question: does it change ANYTHING at all if part of newly received STEEM would be burned or powered up? Not really. Impact would be close to non-existing. Plus it wouldn't create new demand for STEEM/PAL/LEO etc.
The only reasonable way of burning tokens is by creating some ulitily that has a value (existing example: promoting post to trending page on PALnet/SteemLeo) and burning tokens. That would make sense.
To illustrate what I mean, I would use steemword.org as an example:
it's very useful took, and if monthly membership would be introduced, which would require buying 10 steem and burning them (sending to @null) then it would both: reduce REAL inflation and also bring demand for STEEM token.
Yours, Piotr
Burning just seems to make the little guy be a sucker at the expense of the big whale.
Steem needs to figure out how to reward users from using and steem and being active here.
That is the core issue that is always ignored
That is within the real of the blockchain. Time to think outside of the box.
I like my answers to be as summarized and clear as possible.
From my point of view, what makes STEEM have a market value is the fact of rewarding for the publications and the votes they produce, generating profit.
I think the best way would be for that STEEM to become STEEM POWER, Tokens and even trade on serious platforms.
Also projects like @steemmonsters do can generate wealth if that benefit is transformed into SP.
Hence @olimiesma
After the rewards of generating profit, you have steem in your hands; what's next?
That would be in every person's mind.
Would it just be selling off for fiat and be done with it?
I agree. Burning tokens doesn't increase the value of a coin. Price of a token doesn't depend on its quantity. Bitcoin is not valuable just because it is rare. But, it is valuable because people see value in it. On the other hand price of steem is not declining because of increasing numbers of Steem and SBD. In fact, no SBD is being printed these days but, its price is also declining. The price of Steem is going down because of faulty strategies of Stinc and top witnesses who are eager to kill the goose which lays golden eggs. Too much greed is the main reason behind the fall of STeem.
Yes you are seeing as what I am seeing. 👍🏼
People got to see beyond the social media, content creation, upvote or down vote hedge, then it can work to make steem valuable.
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IMHO there is no need to burn any crypto at all. The code was desined in such way that any entity getting the reward should USE it. The only cancer here is the need to transform that crypto into fiat. If every network participant can BUIDL something on that network that would be useful for others, then there will be no need to transform it into fiat or even burn the tokens. The total supply of one coin is not the integer number. Burning 10^4 coins from a network with scalability of 10^-8 and a total supply of 10^12 (ex) will have no action on the whole network. The best thing to do is to make sure the members of the network can USE the coin as a form of payment for many products and services.
You hit the jackpot @concorde. That's what I am thinking too.
And that's one of the reason I am going to Steemfest, to see if there're any projects heading that direction.
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@concorde has stated it very well - value comes with demand, and that will drive apparent scarcity. When you have more buyers than sellers in the market, the price will go up.
Exactly, @jdkennedy
Think in practical terms.
How does this work in the real world?
Consumer side inflation is a function of LIQUIDITY and DEMAND not "total dollars in existence".
Have you ever heard a government or central bank advocate BURNING MONEY?
No.
When QE1 and QE2 and QE3 were executed, trillions of new bills were printed, but inflation barely rippled, WHY IS THAT? LINK
Spoiler Alert! - Because the new bills were SEQUESTERED in VAULTS.
Powering-up your STEEM has almost the same effect as BURNING IT.
Powering-up your STEEM is like putting it in a VAULT.
That is only one way, because powering up actually still create new steem.
I may be wrong, but when new notes are created they are yes still in the vault but it is still creating a lot more volume even though it is not being used.
The main thing is that we have something being created yet to be widely used, that creates the demand for it.
Your idea is a good one but only having the same amount of "citizens of steem" to keep powering up and holding doesn’t truly solve the inflation on a long term basis.
The most important question right now is what else can we do with liquidated steem (to increase its value of usefulness) besides trading off for fiat to put food on the table / spend off for something tangible, yes?
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YOU ARE RIGHT!!
Burning steem or sidechain tokens doesn't make any difference when there isn't much demand for them anyway. Whales control steem's price. Instead of burning, everyone should always power up and help decide token distribution. That... Or just sell.
Don't just sell.
If there're business entity outlets that allows you to use instead of just sell your tokens, would you consider it?
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There are almost none of those, which is why the two options I've mentioned are pretty much all there is to it.
That's because they are waiting for someone else to do that for them.
But that being said, IF there was that option, would you use it instead of just selling it?
When that finally happens, steem price is finally going to go up. So yes, I would hold it, use it, delegate it, whatever. But it's just not going to happen anytime soon.
Nothing takes instant.
But it is always good to look out of any initiative. It could just be right around the corner about to happen.
🙂
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Nah. Not anytime soon. Unfortunately.
Burning make sense if you have a certain amount of coins reserved for special tasks and you know you don't need then anymore. But these are coins that are not issued so far or at an escrow account.
To burn tokens in circulation does not change anything. Less coins - higher value, more coins - lower value, the product stays the same. You need to generate more demand. If the demand is not there an (just optical) higher price for a coin does not help.
Burning steem to increase value does not sound right to me
It will not be of major importance to the stock exchanges for it is the market that decides the prices of buying and selling. When someone with large accounts is still willing to dump quantities of steem on the stock exchange, the price will not rise
But there are those who make big money (TRADING) on the stock exchange that are profitable because the prices are low. I will not elaborate on this, but it is also a contributing factor to the low price.
Other measures are needed to increase the price of STEEM over time.
Marketing costs a lot, but we should start with massive marketing to our own who are part of the community.
Without starting with our own members first, it will be useless to make progress. Big Investors come when they see that there is a substance to what we do and that society is growing and solid
Too many people complain about screaming wolves when the price is low without even doing anything about it. Yes, because we have some blame ourselves here.
@streetstyle has come up with a great action #SPUD
"SPUD 6" STEEM POWER UP DAY October 1, 2019 is now running for the sixth time and SPUD is increasing in scope each time.
Many people here become familiar with what SPUD is and join.
There is also a competition with good prizes
I believe SPUD will be one of the bigger events here at Steemit
Why is SPUD good?
What we see is that small accounts now stop taking out their profits and they build their Steempower and have gained an understanding to keep the SP
Many small accounts that turn down their power to sell their Steem on the stock exchange make a large amount each week and have an impact on price
What is also happening now is that several of those who join SPUD have started to buy Steem to increase their strength in SP.
The more people who see that benefit, our economy will be healthier in Steemit
Hello, my friend.
Correct me if I'm wrong, but the term "burn" means to destroy the STEEMs (?). In this way, the price of STEEM rises. Right?
But originally there wasn't a finite amount of STEEM created, like all blockchain projects? To avoid inflation?
I have an idea, I don't know if it's crazy, but what would happen if they paid to burn the STEEMs?
This way, the price is increased, isn't it? I guess if there is less STEEM, the price will have to go up, because of supply and demand. These are just conjectures.
Good to see you :D
Stay in touch
as stated before, I think the community underestimates the market forces. Steem's price is just not going to head anywhere until the bear market for steem is over (which might be in the next couple of months):
https://steempeak.com/steem/@tobetada/what-drives-the-price-of-steem
Thank you for your feedback and for sharing this link with us @tobetada
Going to check it out right away,
Piotr