A Possible Cure For Steem?

Some time ago, I wrote an article that asked the question, "Is Steem Dying?" My conclusion was that Steem is not dying, but that it was ill. This article goes further and attempts to look at things that may be able to help Steem get well and hopefully flourish!

Before embarking on a new venture, it is often a good idea to research what others have done before. Since Steem uses 'stake' in a similar way as corporations use 'shares', why don't we examine the business model to see what they are doing?

Suppose we have a company that makes shoes. An investor buys shares in that company and the company uses that money to buy new equipment to automate some of its processes. That allows the company to make and sell more shoes. This makes the value of the shares in that company worth more.

Now lets consider if the investors demand a pair of shoes for each $100 they invested in the company: You can see that if there are a lot of investors, many of the shoes the company makes will not be sold, but instead go to the investors (who can sell or use the shoes as they please). Obviously, this eats into the profit margin of the company and the value of the shares is diminished from what it could be if all those extra shoes were sold.

However, if the investors were treated like any other paying customer, the company would be selling shoes both to the general public AND the investors, thereby increasing their sales and also the value of the shares. This is the normal business practice. NOBODY gets free shoes, regardless of the amount invested in the company.

In the case of Steem, the product being sold for "proof of work" is Steem and SBD. The price you pay for Steem and SBD should be the same for everyone (and it is if you buy it on the open market). However, if you work for it, the price is NOT NECESSARILY the same due to the voting system. If we apply Steem's voting system to a worker in the shoe factory, an employee who owns a lot of shares could get paid far more than other employees simply because the employees with large investments can vote to pay each other more and more with no cap! The more they earn, the more powerful their votes and the greater their influence on the next pay raise. This is a bizarre concept and would never work in a business model. The employees who are also investors would soon control the company and bring it down due to human greed.

HF19 simply altered the number of votes allowed and did give slightly more power to those with less invested, but ultimately it is still the same flawed system. The system itself could work if the people involved could control their natural tendencies. The question is, can we conquer human nature?

A POSSIBLE SOLUTION:

Source of syringe used in my graphic.

Corporations allow investors to bring forth resolutions that are then voted on by the 'stake' or number of shares that each investor owns. Corporations do not ask investors how much they should pay their employees. Corporations do not ask investors how they should run their day to day operations. All that menial stuff is left to managers who are governed by the Board of Directors. The Board of Directors is guided by the voting shareholders.

Steem currently has no single place where shareholders can submit resolutions. It probably would help if a central repository were created for suggestions on how to improve steem. These resolutions can then be organized and voted on by shareholders using the weight of their vests. (All shareholders and not just witnesses.)

There has been a lot controversy about self-voting, distribution of rewards and community growth lately. I believe that by making up-votes a fixed amount regardless of vests, would eliminate many of the issues faced today. If we allow 30 votes per day and everyone's vote is worth the same, there would be less incentive to hoard votes or even to self-vote. Now we would really have a social platform where the community decides what is worthy and what is not. There is no longer any reason to chase the whales and it aleviates the frustration the whales have of trying to support the community. Everyone is now responsible equally! Yes, I know it was fun to be able to feel powerful and decide who gets a dollar and who gets 10 cents per vote, but we really need to think long term here. Good content will still get a lot of votes, and even though there may be less reward from whale votes, there won't be a lot of those fractional-cent votes either! The rewards might even go up if you have a large following of small accounts. Steem needs to be seen as a viable business and not a place to print money for a select few. You will be rich beyond your wildest dreams when Steem is worth as much as Bitcoin, so don't fret (I'll do some math below) about not being able to take a bunch of dollars out now from your weekly rewards.

What I'm saying is that the investor's reward comes when they sell their 'stake'. The fact that Steem has a system for earning income should not be a factor as to what an investor takes out now as "wages". The proof of work concept must be considered as wages and pay depends on how well you do your job, not how much you have invested!

If flagging is also done with a fixed vote value, then rogue whales will not be able to flag indiscriminately and kill someone's account just for fun or spite. Flagging becomes more effective because now it really is majority rule rather than might is right.

And finally, I will do some math to demonstrate what I'm talking about.

Let's suppose we have someone who is earning $200/day by self-voting, circle-voting or any other means.
$200 X 365 days per year = $73,000 per year. That's a very nice income!
However, because people see the current system as slanted in favour of early-adopters and feel hopelessly doomed to remaining dust, they abandon the platform and the value of Steem stays constant at around where it currently sits. After 5 years at this rate, our example person has made $365,000 profit.
$73,000 X 5 years = $365,000

Now let's look at what can happen if Steem becomes really popular because people see it as a well-oiled machine where everyone has a chance to make some decent money:
In just 8 years, Bitcoin has reached a value of $5,000 each and it is predicted to go over $1 Million each! Bitcoin is the pioneer of crypto-currencies, but Steem is the pioneer of a social media currency, so it stands a good chance of matching the success of bitcoin. However, for my calculations, I'm going ultra-conservative and suggesting (for our calculation) the value of Steem reaches only $500 after 5 years.
Someone with only 10,000 Steem at $500 each would have an account worth $5 Million! Plus, in that 5 year time period, they would have also earned a nice sum of money from their 'works'. If we assume an average cost of Steem to have been $1 when purchased, then
$5,000,000 - $10,000 = $4,990,000 profit.

So which sounds better: $4.99 Million plus, or $365,000?

Does that make sense? What do you think? Is it worth the risk to try and grab as much as you can now, or would it be better to do all you can to make the platform a huge success? Those who think they are being smart by milking the system are really only cheating themselves in the long run if they prevent the system from growing!