RE: LOW-LIFE DOWNVOTING MEMBERS
That Steemit is essentially run as a ponzi scheme, since it is virtually impossible for the average member to make any money despite claims made that it pays curators for their upvotes. What Steemit does not clearly explain, is the fact that unless members invest in a significant amount of Steem in order to gain a lot of Steem Power, and on top of that, have a reasonably high reputation, they will receive virtually nothing from all their upvoting efforts. This is exactly what happened to me. I invested approximately 800 steem, and with over 1000+ upvotes, it netted me a grand total of less than 25 cents. Nowhere in any of Steemit's documentation does it state that the average member will receive nothing, despite their ongoing investments and efforts. Furthermore, when a member wants out, he has no facility to get his investment back, other than wait a ridiculous 13 weeks (1/4 of a year) for power down to take place. And those facts are where the crime is, and that is what will be investigated.
..
While I agree with most of your assessment, I'm not sure I would personally call steemit a "ponzi-scheme" (nobody promised you'd double or triple your money in a short span of time).
Steemit does seem unfair and misleading, but it's apparently no more unfair or misleading than the true scam we're all born into (fiat currency).
Thanks for your reply!
"I'm not sure I would personally call steemit a "ponzi-scheme""
A "ponzi scheme" is any scheme in which you invest money, and by its design, essentially provides no chance of ever making a return on that money, despite claims to the contrary. Steemit claims you can make money by curating posts, whereas in reality, the vast majority of Steemit members can not and will not do so.
"(nobody promised you'd double or triple your money in a short span of time)."
While it's true that nobody promised that you can double or triple your money, Steemit does claim that you can make money by curating other authors' posts. In reality however, that is simply not the case for most members. Steemit does not state anywhere that the chances of making any money at all, is fully dependent upon both making a significant investment, and on having a relatively high reputation rate. Those 2 facts will immediately eliminate the vast majority of Steemit members. Only a very small number will invest the amount necessary (if any), and gaining a high reputation is next to impossible when you have so many unethical members who are constantly downvoting members with lower reputations than themselves, for no reason at all in the vast majority of cases.
Actually, the definition of a Ponzi Scheme is a fraudulent venture that lures investors and pays profits to earlier investors with funds from more recent investors. If they were asking us to pay some sort of membership fee from which the senior members were getting their rewards - this would be a Ponzi scheme. But when steemers choose to purchase more steam power that doesn't directly benefit those who joined before them or those that referred them. It actually benefits the buyers whose vote now weighs much more than that of a user with mere 15SP.
The best comparison is the online game. Those that are serious about succeeding (or winning?) do spend some of their money buying weapons and armor or whatever other tools they need - even though these tools are virtual and are worth nothing in the real world. Same thing here - people may wish to purchase some virtual power with real money and they may not get any material benefits from it, but this doesn't make Steemit a Ponzi scheme.
Well stated.
"But when steemers choose to purchase more steam power that doesn't directly benefit those who joined before them or those that referred them."
Sure it does! The whales benefit (earn) from investments and curating by the minnows for which they (the minnows) get paid nothing. Without so many minnows, there would be no whales.
"Same thing here - people may wish to purchase some virtual power with real money and they may not get any material benefits from it, but this doesn't make Steemit a Ponzi scheme."
I do not agree! People invest in a game solely for the Entertainment value that it provides. There are no other claims. People invest in Steemit, on the other hand, as a result of Steemit's claims to reward curators, and in the belief that they will actually make money, whereas in reality, they do not, or at least the vast majority do not. And that is what makes Steemit a ponzi scheme.
If rewards were shared equally amount all curators, that would be a much different issue. Likewise, if those members with higher reputations did not have any more downvoting power than lower reputation members, that too would be a much different issue. Downvoting other members simply because you do not agree with what they have to say, has absolutely nothing to do with maintaining a quality forum. In fact, quite the opposite is true. The quality of the Steemit forum is extremely low for that exact reason, because serious social media people will have absolutely nothing to do with a platform such as Steemit.
If Steemit was designed properly, it would have perhaps 100+ million members by now, but as it is, it has only managed to attract a mere 1 million, with less than 5% of those still active.
I agree.
Steem-power does pay out about 8% APR, + if you setup automatic voting to instantly band-wagon onto the top earners like gooddream and nonameslefttouse and steemcleaners, then you can even boost that up a bit.
It's not bad for a hobby, but almost nobody is "making a living" at this. I mean, last time I checked, gooddream was making about $500 a month in payouts (which is hardly lambo cash).
$500 is not a lot of money to make, but it would certainly not be bad for a small hobby. But let's be honest! What percentage of Steemit members make anywhere remotely close to that amount, and what percentage of Steemit members make nothing or close to it?
The overwhelming majority make less-than-break-even for the electricity they pay to run their computer(s).
I'm just pointing out that even those at the TOP aren't exactly "rollin' in it".
"The overwhelming majority make less-than-break-even for the electricity they pay to run their computer(s)."
Agreed! So what's the point? Is this whole Steemit thing really worth it, or are we all just wasting our time putting that $500 per month (or whatever) in the hands of those who really have no respect for the rest of us. Only a fool would do that. I think it's time to shut down Steemit for what it really is...a ponzi scheme.
"I'm just pointing out that even those at the TOP aren't exactly "rollin' in it"."
Point taken! But let's not forget that there are countries in the world where $500 a month would be considered a lot of money.
But regardless of how money is earned or allocated, one of the other main problems with Steemit is the fact that there is almost no original content posted. The vast majority of it is simply copied and pasted from somewhere else on the Internet.
And that's probably where most of steem's potential growth lays.
"And that's probably where most of steem's potential growth lays."
Not really! They may be initially interested in joining Steemit to make money from curating articles, but as soon as they discover that it is impossible to do so, without investing in a lot of Steem Power, they will leave just as quickly as they come. Also, they will not have the money to buy a significant amount of Steem even if they wanted to.
And I don't personally see a problem with that.
If people want to treat steemit as a sort of news aggregator, that seems perfectly reasonable to me.
Slashdot, FARK, GoogleNews, and actually most "news" sources don't post original content. They just regurgitate Reuters and the Associated Press.
Why do I care if it's "original" or not. I only care if it's interesting.
Although, I do find those on the almighty steemit "top trending" page to be pretty boring.
"And I don't personally see a problem with that."
While I might also agree with that, someone needs to tell some of Steemit's biggest members to STOP black listing members for posting such articles. Have you noticed just how many members have been black listed for that very thing? I would bet far more members than are now active.
By that definition we'd have to include purchasing a home (most can't sell for a profit), paying for a college education (most never pay off their student loans), starting a small business (90% fail) and investing in the stock market (90% lose money).
No, that is not a correct analysis. First of all, no offer is made in any of the above scenarios that the purchaser will actually make money from their investment, and in all the above cases, the purchaser actually receives value for their investment.
Investing in Steemit on the other hand is made with the claim (assumption) that those investing will make money from their investment. Yet by the very design of Steemit, it ensures that the vast majority of investors will never make any money, with the bulk of the rewards going to only a very select members at the top. That makes Steemit a classic definition of a ponzi scheme.
Feel free to contact the FTC or the FBI and ask them. If you tell them the whole truth, they will tell you exactly as I have.
The kid paying hundreds of thousands of dollars for a college education has certainly been told they will be able to at least double their ROI.
Ok, ok, I get that you're upset, but you should be able to get at least most of your "cash" investment back after the 13 week cool-down.
Maybe you lose 10%? It's no riskier than investing in stock-market-securities.
I know people who lost $30,000.00 (and more) when Washington Mutual Bank was dissolved.
WTF is the FTC doing about that?!
Well to be honest from quite a while back when I got really pissed off, it's been quite a while and I don't remember the name but he developed that parley site, but he wasn't the only one involved at the time there was someone else, I did file a complaint with the FTC and before you can file a complaint they ask you what your complaint involves as they aren't going to waste their time filing reports that have no merit...at the end of telling him what my complaint concerned he thought it justifiable enough to take it. I asked him what happens next and he said they get sent out to all the federal and state agencies where they sit until the pile gets big enough that someone finally takes notice and does something about it. In other words when they make a big enough mess on someone's desk who finally decides to pick them up and do something about it. It's been I think well over a year now and I haven't heard back but that doesn't mean that someday isn't coming. For everyone they piss off that pile gets bigger.
As for your argument that people buy non essential things to bolster their chances your point isn't worth holding. People invest in those non essentials to bolster they chances at succeeding. If they do everything right as depicted they should be able to succeed. Failing that success no matter what they do with all the right tools and time invested then that becomes concerning as to why. Nobody should be left holding a dead fish because a system is stacked against them, which we all know this system is. The plain matter of fact is that until Steemit is brought under the governing laws the system will always be stacked because people (higher ups) make their own rules to abide by. I can give you one simple example right here, that being that under federal tax code Steemit has to give the names of all the people they pay more than six hundred dollars a year out to along with those individuals social security numbers or relevant tax ID to the IRS. I know this to be fact because as a landlord if I use a self contractor (which people who participate on this site are doing, self contracting themselves out for a return on profit) and I pay that person more than six hundred dollars I am obligated to report that to the IRS. We all know Steemit doesn't do that. But that's just one example of running rough. The last hard folk they did runs much similar to the complaint I filed which if someday if it ever gets looked it will only bolster the case that the system is designed in favor of the upper tier. Think logically about what they are doing, someone invest time in a system that says you with this much invested you are worth this amount in a vote, then they come down and say now you are totally worthless after one has done invested an incredible amount of time to get to not only where they were promised they'd be at to start but take away any gains you made by slashing your worth and handing it to the upper tier. Now take that same scenario and apply it also to people who invested their money. It just don't add up. Part of the problem is also the fact that a lot of the people invested here are based in foreign countries who may not have the same laws so they feel empowered to just slap anybody around who complains as they are basically untouchable. So it's quite a mess but over all that though is the fact it is a US based company, someone owns it and it's their job to figure out the mess. Will they ever be forced to?...I guess that will all depend upon whoever that person is sitting behind a desk gets tired of seeing Steemit complaints flying across his desk. I mean I really, really like to invest in Steemit, wholeheartedly, but not when the game is stacked against me.
That would only apply to exchanges of legal-tender.
Crypto is basically "World of Warcraft gold" (which is also exchangeable for legal-tender).
AND, I believe KYC (know your customer) laws are blatant violations of personal-privacy.
Which is also exchangeable for legal tender is what grabbed the guys attention explaining it to him. That gave my complaint legitimacy enough to file.
Also the cryto's have been already been determined by the chairman of the FTC as being the same as money, it holds value. They did this because of the complaints coming forth could proceed in court from the people who were ripped off by the exchanges for millions. They had to determine cryto's had monetary value. (I am not fully informed of all the scandals that were involved when people invested then lost their money after someone took off with it or an exchange went down but that is what drove the decision by the FTC)
https://www.sec.gov/news/testimony/testimony-virtual-currencies-oversight-role-us-securities-and-exchange-commission
I've found a better community here than anywhere else, and I really like the fact that nobody can get perma-banned by a rogue-mod.
Have you found a superior alternative?
Please be more specific.
Companies like Amway or Avon were people become distributors there are products that you will need to start your business that are essential, other products you can buy, like samples to hand out, are optional but can enhance your business. So if someone was investing in the company, which they are when they buy a basic start up kit, find that they aren't making money even though they are selling product are told if you enhance your business you will sell more product because people will buy more product if they can sample it first but once you invest further you find you still aren't making money that's a indication that the company's practice's are geared toward the top tier and people are mislead by their practices. Now if let's say the company's top tier aren't making enough profit. They can raise prices but they can't cut into the lower tier's bottom line to do it, those people are invested, they have just as much right to have their investment protected as the top tier and the only way to ensure equal leveraging would be to raise prices. Same thing would have worked along the lines if I had invested that thousand dollars I was going to invest before the last hard folk. I would have invested upon the assumption that would increase my profit by making my vote for valuable. After I invested my money and woke up the day after the hard folk and found out I was back to being worthless that's highly questionable tactic especially since the hard folk gave the upper tier an advantage. I am just telling you this because, in my opinion, there may actually come a day that enough complaints get filed these practices will be what they look at. It won't be like they will write anyone a letter either whose complained and say we are looking into the company now. They'll assign someone within an internet fraud division to create an account to see how it operates, if they find that the complaints are justified then they'll file charges against the company and it will be at that point they notify complainants of their actions. These types of cases usually spiral into class action lawsuits usually with an attorney located within the jurisdiction where the charges get filed. But because the company is only a four hundred million entity compared to people like Bernie Madoff whose crimes amounted to billions then four hundred million dollar entity and their operation in comparison is small potatoes....it would take a whole lot of complaints to spark interest in how this crypto platform operates. Then there are the questions relating to the IRS, and the IRS does have rules when it comes to crypto's. People have to report their crypto earnings. At what level of earning I do not know as I usually do my own taxes and am not a tax consultant but I don't make enough here for me to worry about it anyway, unless of course I would fall under some rule that said "combined money made from investment, self employment, etc., then it would put me over the threshold of whatever was required as I do have other income as a landlord. Still the amount is so low that if they wrote a letter and said hey you got to pay taxes on that sixty dollars you made over two years I steemit I think I can handle that, even if I got a late penalty. Now if I was making several hundred dollars a year I'd be quite worried and making a trip down to the IRS office to find the answer...part of that answer may even be "well doesn't the company send out a 1099 or 10 something or another" which could possibly be required as I remember having to have done that back when I owned a business I contracted out space for self employment. Like I said I am not a tax person so I don't know all the applicable laws, plus federal law is different from state laws, etc., nor do I or would I even begin to imagine all the tax liabilities involved when it came to operating a crypto site. I do know that if I did I certainly would find out especially after it was ruled that crypto's are now under the same legal requirements that regular fiat falls under. Like I said this site is small potatoes in comparison but when people get pissed off they go looking for answers, just like I did when I got struck down over my articles on the APPICS, I filed a complaint with my state, it took them several days to get back to me and they said they don't consider voluntary participation on the site as employment and suggested I file a federal complaint because they do. By that time I wasn't as pissed off anymore and taking the time to file a complaint over the loss of a few pennies didn't seem worth the same time and effort it took me to complain then have to wait on the state. But none the less it's these moments that people get teed off about that make that complaint file get bigger out there waiting someplace. Just like if I had invested a thousand and loss it's value, I'd be lived enough to have spent days on the phone to every organization I could have found to file a complaint with. In the reality of it all is that the company doesn't get to determine what rules applies it the laws that apply. I am just speaking frankly to you bout it. Like no they do not have a right to allow people to go strike down money I already made regardless if it's pennies or not just because it's not in my wallet yet....I earned it, it's mine, same as if I worked Monday, Tuesday, screwed up on Wednesday causing a loss not to my hourly pay but to any incentive I may have earned over my hourly pay that day, but that's it....they can't take the hourly pay away, they can't take what you earned on Monday and Tuesday away, that is mine regardless if the company hasn't paid it out in a check to me yet....it really that simple. It will be a combination of all these little bullshits that finally come back to bite the company...and all it is going to take is one person from one of the state or federal agencies to get tired of seeing complaints with Steemits name on it come across their desk....who really knows that person or someone they assigned it to could be lurking about on here already....there sure have been plenty of people on here who have been that royally pissed off.
Like I said I am just having a frank discussion with you on it. I feel a lot of the issues don't get fixed because there are to many people on here from foreign countries with influence but they don't realize that someday the shit could hit the fan, it's all good they are making money off the site but someday the site could be forced to clean up it's act or get shut down...then where is that going to leave their investment?....more than likely frozen, it's assets distributed to all those who filed complaints over the years. I don't think it's unreasonable to say hey I am tired of people who get mad running over to my site and striking down hours worth of my work over it, you are mad about something I said the time to show your dissatisfaction was downvoting what I said not going over and taking everything I worked hard for all week, at some point I'd be really stupid to want to continue on under those circumstances. I can either file a complaint that may take years to resolve or quit wasting my time. I opted to quit wasting my time, keep my free speech rights intact by not allowing retribution and censorship of my post that had nothing to do with a comment or post I made. I may or may not write something in the future but I highly doubt I'll be putting all my eggs in a 7 day basket for someone to come steal from me.
I am just trying to be whole hardheartedly honest here. They really need to sit down and think before they make changes and stop letting foreign drivers influence that which ultimately looks good to them now but in the future they could find they lose everything over in a freeze out of their account because each time they strike out at somebody could be one more potential complaint that may be the complaint that that someone picks up and does something about because they are tired of seeing people complain about the same entity. I realize just writing this people will flee me, maybe downvote me, run over to my site and see what's there to strike down...but that's the whole problem not the answer. I'll save them the time and tell them there's nothing there and I am going to move on to do what this site said I am afforded, a censorship free platform and I am no longer affording them the opportunity to break that rule.
"The kid paying hundreds of thousands of dollars for a college education has certainly been told they will be able to at least double their ROI."
Perhaps, but at least the kid got the education for his money. That has to be worth at least something, if not doubling their ROI.
"WTF is the FTC doing about that?!"
The main difference is that Steemit "is designed" to scam the vast majority of members by offering them something that Steemit does not or can not deliver on. That is different that a bank failing. The bank was not setup or designed to specifically scam its customers. Also, most banks have (or should have) deposit insurance which will compensate customers to certain limits, in the event of a bank failure. No one should ever put their money in any bank that does not have such insurance.
You don't seem to understand how fractional-reserve-banking works.
It's the mother of all ponzi-schemes.
Click to watch 28 minutes (or just the first 5 minutes),
None of the customers of Washington Mutual Bank "lost their deposits", those were all transferred to the behemoth Chase Manhattan Bank.
It's the people who had their retirement funds and 401k heavily invested in WAMU STOCK who lost their shirts when it went to ZERO with basically no warning.
This is exactly the type of "investor protection" scenario the FTC uses to justify their existence (oh, we must have someone looking out for investors). AND they just stood by and did NOTHING.
"It's the mother of all ponzi-schemes"
No, fractional-reserve-banking is NOT a ponzi scheme, simply because customer deposits are insured. As such, customers are not at risk of losing their money. Investing in a bank (or other company) as a shareholder is a different issue. That is governed by the SEC, NOT the FBI.
Don't even get me started on the lottery or casinos...