Beyond the STEEM Whitepaper – 2. Where the money come from; New Users DO NOT Increase the Value of Steem (yet)
#beyondthewhitepaper This series of articles aim to 1. Explain in yet another way the concepts of the Steem white paper; in a hope that stating in different words might help someone understand the concept 2. Go a step beyond the whitepaper in some particular aspects of the system 3. Explain the practical consequences of the design. Hope you enjoy it. If so vote up the article both during the first 12h and any time after that!
@arhag wrote a great article explaining where the money in steem come from. You should read it if you have not already.. Arhag concludes that STEEM POWER can be thought of as a “subscription fee” for use of the platform. Consecutively ever one will need to buy it and thus will pay for using it. What is left unsaid is that this buying will happen in the future. In the future as in NOT NOW. Currently nobody needs to pay for this fee as each account is created by steemit account and the fee is paid by them. What is important here is to see that the demand for STEEM POWER by the users of the system is nonexistent.
Who and Why is buying STEEM? Who is providing the money currently?
It has always been mind boggling to me is who and why is buying STEEM? I have never found this buying to be a solid investment decision. When you think of STEEM POWER as “subscription fee” the question arises – What do you expect? On what are you betting guys? That the subscription fee will go up enormously? And if it does when? Many many years from now…if the platform is successful… Not a sound investment by any stretch of the imagination.
The truth of the matter is All the buying of Steem is done by crypto currency speculators. All the buying is done by them and they alone provide all the money Those of you that are familiar with that market know that they have a very strong tendency to follow any crypto coin during their bull runs… with not much research about what they are buying. In that markets multiple times over increases are not uncommon and they just jump on each upward moving coin.
Thousands of New Accounts Daily and Rival Growth of STEEMit is a fact. But unfortunately it has nothing to do with STEEM’s token/coin value.
That is the unfortunate conclusion, but one we must come after the explanation above … As much as having 2000- 3000 new accounts each day is being truly GREAT. This viral growth does little for the value of steem. The new accounts increase the value of the Steem it NETWORK, but as explained above the network value and the token value are disjoint at present time.
There is a good chance those two will come in closer correlation later on (I believe in about 1-2 years)! But before that this disjointment will have dare consequences. I intend to address those in a article in the near future.
#steemit #beyondthewhitepaper #steemithelp #steemhelp #howsteemworks #help #help #money #trading
Recent blog posts of mine:
Beyond the STEEM Whitepaper – 1. Blogging and Curation Rewards Fund; Steem Backed Dollars Creation
Reducing the Payout Time from 24h to 12h – BAD IDEA!!!
Steem – The Solution to Curation Rewards
Time Start
https://steemit.com/steemit/@konti/important-information-or-publication-time-post-or-time-zones
Steem is not merely a subscription fee. Steem can be converted to Steem Power, and Steem Power translates into INFLUENCE. Everyone wants to be more influential than the next guy. To do that, they must hoard Steem Power. Consequently, hoarders are not just "speculators". Some hoarders, myself included, hoard so that we can be more influential and have a larger say on the network. As more user join the network, having a larger say becomes even more valuable, hence demand for Steem increases. So, more users does in fact translate directly into higher Steem values (subject to bouts of volatility from speculators).
I DO have extended thoughts on "powering up as a mean to gain influence"...The truth of the matter is someone wanting to buy say my steem power (aka $7,000) will gain about 0.001-0.003 Steem Power.
This is quite lame investment - 20 upvotes daily x 0.002 X 2.80 $/steem = $0.112
365 days x $0.112 = $40.88 bucks annually... on a $7,000 investment this comes to a pretty lame 0.58% anual return
And to get it you have to spend a good 1-2h/day, 365 days a year....
JUST Terrible!!!!
You're totally misunderstanding the concept of influence. Influence isn't measured by how much you get paid for each of your upvotes. It's measured by how much money you can direct to others with each of your upvotes, or deprive others with each of your downvotes.
In any event, your math is wrong. If you upvote the right posts early enough (that is, if you do a good enough job as a curator), you can earn far more than you suggest. My friend has about $8,000 worth of Steem Power (at current prices) and earned a curation award of over $150 from a single upvote. He regularly earns a $1 or more per upvote. You might want to revisit your voting strategy.
Keep up the good work!