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RE: Can Steemit Survive Burning $65 Million USD in Author and Curator Rewards Every Year?
Dear @bbilgin, your questions about the complete Steem content being worth or not $ 65M misses a few key elements:
Steem is new, not mature technology. In this stage we will see very odd things that are not sustainable at all. A nice example of this is the value of 1 SBD. It deviates hugely from 1 USD.
Rewards are in a sense the Steem way of mining (tagged Proof of Brain). Mining is an integral part in many blockchains. Blockchain technology itself is fluctuating heavily in value as well, so much here should be seen in terms of 'potential future value'.
Dear @fitzgibbon, I did not question the value of the complete Steem/Steemit ecosystem. Can you quote the sentence where you think that I question the value of the Steem/Steemit ecosystem?
I question the amount of rewards paid to authors and curators in a single year, which amounts to $65 Million USD. Again, I did not question the amount paid to the witnesses or someone else.
That $65 Million USD is paid to the authors and curators for the content created in a single year. Do you think that the potential future value of the content created on Steemit is $65 Million USD? If so, can you explain me your calculations?
The exact number in USD depends on the value of 1 Steem. The value of 1 Steem is determined by the market. If the market would behave according to Metcalfe's law, it is assuming Steem has about 33000 daily active users that contribute time and content.
Metcalfe:
value = users2
Seems oddly accurate, no?
Again, I don't discuss the market cap of Steem. I assume that the ~$1Billion USD market capitalization is accurate.
According to the current schedule, total number of Steems are inflated by 9.5% in a year. That makes 8.7% dilution in a year. 75% of 8.7% makes 6.5%. That 6.5% is allocated to the authors and curators for the content created in a single year. That amounts to $65 Million USD a year.
Do you believe that the content created in a year on Steemit is worth $65 Million USD?
In other words, suppose that Steemit is your own private website that you host on GoDaddy. And you have a billion USD in your bank account. You allowed all these people to create content on your website. Would you give $65 Million USD of your billion USD to these people for the content they created on your website?