I have a theory how the market forces behave and I would like to share it with you. It is a theory that reveals the relationship between the big Whales and the small fish, and why they are both crucial in a healthy market, and that this relationship emerges naturally, without any forceful external influence.

Now a market is just an exchange where the supply meets the demand and transaction happen, that balance this. When the market is balanced, or shall we call it in equilibrium state, the SUPPLY = DEMAND. The market is almost never in equilibrium, because there is always new input, new events happening that distort either the supply or the demand or both.

But it tends toward equilibrium, and this is very important. Now this is nothing new, economists have already knew about this for 200 years, but what is new, is my theory about how different sized participants balance this.

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• First of all there is no equality between participant's potential. So unless you can find me a real world example of a communist market where every participant trade the exact same amount and earn the same amount in profits, it's impossible. It is impossible because each participant has different knowledge, experience, or information about the market, so it's impossible to earn the same amount of profit, naturally. (Of course with government forced wealth redistribution that is another story, but in nature, this doesn't happen). Therefore, market participants will never be equal, so a Whale class is naturally formed, that hold more % of that market's share than the rest of people. It is usually the 80-20 rule, but I'd say it's more like the top 5% in some cases. In either case, this is our Whale group. Nothing wrong with this, this is how nature works.

• While there is no equality between participants (no communism), there is however equality of opportunity, at least in a fair free market there is.

Ex: A billionaire is just as likely to lose his 1 billion$ than as a poor person to win 1 billion$.

• The fair free market also treats every participant equally, ideally, a 1 billion $ transaction should have the same priority as a 1$ transaction, but most of the time it doesn't. It should also cost the same amount in fees for any transaction. Not all markets are fair, but they tend toward fairness nontheless.

Ex: Your Bank charges you 5% for a 1 million$ transaction, and only 5$ for a 100$ transaction, and the big one will have a priority; while Bitcoin charges 0.1$ for both transactions, and they will be equally treated. Therefore Bitcoin is a more natural market for transactions than a Bank.

This is probably the most equality you can get from the market: transaction being treated equally, and participants being treated equally, however the wealth inequality is unavoidable, and totally natural.

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Now let's see what is the role of the Whale and the role of the Small Fish:

• The Whales (collectively) always represents the downside risk, since he has accumulated a large % of the market share, he is most likely to sell than to buy, and him selling will move the market down more, on average than any other seller.
• The Small Fish (collectively) always represent the upside potential, since they don't have a large % of the market share, he is most likely to buy than to sell, and they are most likely the buyers, to whom the Whales sell to.

These observations are always true, for example a company going public, who are they going to sell the shares too? The small investors who want a share of that, while the private investors who invested as venture capitalists, are starting to buy.

This is not a scam, it's not like the Whales are dumping on the gullible small investors.

Remember they both have the same risk, they can both lose money. Just as a small investor buying an IPO can turn that into a fortune, the big Whale can also lose a lot of money in the early stages of investing. So equality of opportunity principle still holds.

NOTE: And another interesting thing is that they will never have equal % share. So communism will never happen. When a Whale halfway finishes selling and a small fish halfway finishes buying, they will not have equal wealth, it will just flip. So the old Whale will exit, and become the small fish, while the small fish will enter and become the Whale. So the top 5% will always be there, it's just that the participants are changing, the inequality won't.

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Same goes with Steem, big Whales are powering down, while small investors are powering up. Of course this is what is happening, what did you expect? The Steem market is no different than any other fair market, the Whales will always power down, on average, while the small fish will always power up on average.

So there is nothing outrageous about this, everyone who thinks that Steem is a scam, should read this article, and study market forces more closely, because people fail to realize how markets work.

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I also don't think this is a bad thing, while I think the inflation of Steem is a bit high, I don't have a problem with the existence of Whales, because it is unavoidable either way.

So people should think about this as an opportunity, and not as a bad thing. If the Whales are powering down, you have a higher chance now to be the future Whale. The composition of the Whales will change, and you might be the Next Whale of Steem!

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Upvote, ReSteem &