RE: A Possible Cure For Steem?
"If I'm understanding you correctly, then Steem is unique in that it allows investors to reap rewards without having to wait for gains in the value of the currency itself"
I would change "reap" to "grant" here, although you are correct that many users do reap those rewards for themselves.
My personal experience with those with high stake is they almost all give out a substantial percentage of their daily rewards, but they generally do keep some for themselves as I think is totally fair.
"grab as much as they can before the penny drops and people realize what is really going on."
What would constitute the "penny dropping", in this case?
I think a lot of the key users are already aware of what's going on, as I've noticed a limited amount of interest/outrage for even heavy, erm, creative-rewards-pool allocators. I used to post about it, too.
"whoever cashed out got what they got and it's time to move on to another adventure?"
Could happen to any crypto currency, frankly, and will to many more in the future IMO. And assets other than crypto...
"But then would that not favor the use of crypto-currencies?"
It would, and I think it is, indeed doing that. Most people are still ignoring the fact that their butter is the same price now for 12 oz that it was last year for 14oz and 2 years before that 16 oz. That's why most haven't even heard of Bitcoin yet.
"Would that fact alone not encourage mass-adoption of this new way of doing business?"
Try talking your mom through buying a Bitcoin. You'll quickly see just how much of an early adopter you are.
"And with Steem having a unique feature, would that not bring Steem over the tipping point so that it is within the 10% that do NOT fail?"
Not really. A number of coins have DPoS, but it's not super popular with the market. People won't pay that much more for the ability to vote on proposals. Most people just don't care.
Monero is anonymous. Bitcoin Cash is faster than bitcoin and relatively easy to support, as well as widely distributed. Ethereum has obvious applications in smart contracts. I could name 10-20 more easily that I think the market might pick over Steem if it went that route.
The rewards are the #1 draw to Steem/Steemit for almost everyone. You wouldn't even bother to tell your friends about the site if it was just a "censorship resistant copy of Reddit with worse interface."
Wow! You seem to know a lot about this topic. Thanks again for your contribution and explanations.
Just to clarify your question about:
I was thinking about all the small-time users who are just trying to earn a few dollars but are not investors. If they lose hope of ever becoming a whale, they are likely to pull out. That might scare off the other small-time investors that buy only small amounts of Steem, but because of their numbers, they start a crash.
"I was thinking about all the small-time users who are just trying to earn a few dollars but are not investors. If they lose hope of ever becoming a whale, they are likely to pull out."
Note that you said "but are not investors." That's typical of small-time users - they usually don't buy into the platform at all. This is partially because they are "lookie-loos", but also partially because that first deposit is by FAR the hardest - you have to, at least, have Bitcoin at the ready.
Even the moderators who chat all day in the Minnow Support Group, post a lot, do contests, etc. Most of these people have 500 SP or 1000 SP.
So, most small users aren't investors. They can't "pull out" because they've put nothing in.
In other words, they can't crash the price of Steem because they, collectively as a group, do not have a significant amount to sell.
Now, between myself and my investor I sold on the merits of Steem as a capital investment, we have put in some $150,000 and hold around 110,000 SP. If we decided to dump it all on an exchange, we could actually move the price. Unlike the minnows.
So, that was sort of the point of my question. Minnows can't really sell out because they never bought in.
"If they lose hope of ever becoming a whale, they are likely to pull out."
I don't think many people think that you can become a whale on Steem without buying in. The window for that is over, unless you treat this like a legitimate full-time job and you have natural writing / communication gifts.
Frankly, if we lose people who are in it only to become a whale with no investment, I doubt we lose much.
"That might scare off the other small-time investors that buy only small amounts of Steem, but because of their numbers, they start a crash."
As noted above, I don't really think there are enough small-time investors with substantial stake to make this an issue.
Bonus - 13 week power down substantially reduces the ability for people to "dump" Steem. It's one of the main reasons I advocated Steem as a crypto investment for non-content creators.
You do have a good point here since 90 % of Steem is held by 1% of the population. When one puts actual figures onto a subject, it becomes much more clear than anecdotal ideas. But that is just our current situation. As Steem goes mainstream, can you see that ratio remaining constant or is it possible for the massive number of new people to actually become a significant portion of the entire value of Steem?
Agreed, that the 13 week power-down is a very smart idea. It also provides some security in case of a breach. I'm beginning to read of cases where people's accounts with other currencies are being emptied in a matter of minutes.
I've seen many posts about newcomers stating how they are dreaming about becoming a whale. If these people are all just dreamers and after realizing their hopes have been smashed, they leave the platform and only the serious investors are left. What happens to the demand for Steem? The serious investors must either have unlimited amounts of fiat money to keep buying Steem, or the demand dies and with it the value of Steem. What keeps the value propped up? In my mind, it needs the mass hysteria of the general population to keep the token in the limelight and create the demand. After all, there is no real inherent value to Steem, it is just a number held on a ledger. It is PERCEIVED value and that is created by belief. Remove the belief and the value is gone. It almost seems like a casino game... many must lose in order for a few to win. Within the Steemit community, who are the many? Probably all those small-time investors.
Thanks again for bringing your perspective into this discussion. It has really broadened my perspective on this token.
By the way, if distribution was more wide, I think it would be better. I also sympathize with what your intentions are regarding making improvements.
I actually have a totally opposite idea that would make all votes generate the same amount of rewards for both the voter and the target. The idea would be to implement a sort of "stake-based universal basic voting income" for Steemit that would remove all incentive to self-vote.
This would hopefully bring that which benefits the community most in line with the optimal game-theoretical choice for applying voting power.
If everyone self-votes by default (we'll call it a stake-dividend for voting participation), then we're back to strong curation making more rewards than "abuse", or self-voting, would.
It would also probably cut down on a lot of spam posts that get self-upvoted...
Thanks again for all your valuable insight. I'm intrigued by your thoughts on voting, but I don't understand how it would work.
If the voter votes on them-self, they are the target and get both halves.
Well, yes, technically speaking. ;)
Of course I was planning to include some simple logic to prevent this:
IF {Vote.Target} = {Self} THEN Forfeit (burn to @null) {Self.Reward}.
This would render self-voting completely pointless, as it will provide fewer net benefits than voting for anyone else. Anyone silly enough to do it, however, will be helping slightly improve the value of Steem by reducing inflation (forfeiting half their voting power).
Finally, the divide between what is in your personal best financial interest, game theoretically, and what is maximally best for the community (quality sharing/curation) will be gone.
The maximally socially beneficial thing (voting on quality posts) will be the maximally beneficial thing on a personal level.
It's like applying the ideas of Capitalism over Communism to Steemit. Communism's problem has always been a kindergartner's understanding of basic human motivation.
Let me see if I understand this correctly:
Your idea is to have everyone self-upvote their own articles automatically on publishing, however if they self-vote their own comments, they lose half to null and it goes back into the reward pool. When they curate someone else with an up-vote, they use the same vote-weight calculation as now, except that half goes to the up-voted person and half goes back to the curator?
In that case, I presume there would no longer be a need for the 75%/25% split between curators and authors? The split would now be 50/50 but without the complications of the half-hour penalty and who voted first?
This does seem to address the self-voting issue and would also possibly provide greater rewards per up-vote (if the slider is removed). However how would flags be treated? Will might still be right? In other words can someone totally destroy someone of lesser SP with just a few powerful flags?
If the slider is still employed, then can everyone expect to see their earnings reduced by that extra 25% that goes back to the curator?
"Your idea is to have everyone self-upvote their own articles automatically on publishing, however if they self-vote their own comments, they lose half to null and it goes back into the reward pool. When they curate someone else with an up-vote, they use the same vote-weight calculation as now, except that half goes to the up-voted person and half goes back to the curator?"
Yes, that's basically it. Every outgoing vote gives the VOTER 50% and the VOTEE (target) 50%. (Although, I am playing with making it 45/45/10 with the 10 boosting curation rewards.)
"In that case, I presume there would no longer be a need for the 75%/25% split between curators and authors? The split would now be 50/50 but without the complications of the half-hour penalty and who voted first?"
Although I am considering adjusting it, I would not change the reward split. I think curation is already not rewarding enough. I want to encourage it more than now, not less. Hence, the possibility of taking 10% of VP and making it a curation boost.
I have a lot of suggestions for changing the curation formula as part of this change (possibly including rep as a factor, etc).
"However how would flags be treated?"
I wouldn't change flags with this change. I'm already messing with VP and curation, that's too much at once. Flags could be changed independently or not, depending on what people like.
"If the slider is still employed, then can everyone expect to see their earnings reduced by that extra 25% that goes back to the curator?"
I would keep the slider and not necessarily change the 25% curation rewards. I don't want to make it so that voting on anyone is equally good. Curation rewards should be higher, not lower.