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RE: Are Steem author/curation rewards sustainable?
Thanks! This is some great information - I have a question about your last point (#4). You say that if the user base doubles my upvote value will increase, but is that ONLY if the value of the Steem currency more than doubles?
For a simplistic example, let's say that there are 10 STEEM available in the reward pool and STEEM currently trades at 1 STEEM = $1 USD. Then if there are 10 total upvotes submitted with equal power, each upvote should award 1 STEEM or $1 USD reward.
Now take the same example but the user base doubles and there are 20 upvotes...then each upvote would only award 0.5 STEEM or $0.50 USD as a reward UNLESS the value of the STEEM token also doubles.
Is my understanding of this correct?
Exactly. The value of upvote does not depend on the no. of Steem tokens it gives but the value of the Steem tokens. You must have noticed in last couple of weeks, the fluctuation in the vote worth of several whales and bots because of the turmoil in the market.
Network effect will always increase the value of currency more (greater than the sum of the
parts). The value of currency lies in its usage (increased no. of transactions), user-base (increased acceptability) and increased distribution (resulting in stability and safety). So higher the circulation, more will be its value.