Skin in the Steem game

There is something that people often forget when they consider a proof of stake platform, and that is the risk in having stake. Some look at the actions of those with stake as oppressive without recognising that the more stake one has, the more exposed one becomes. This is part of the game, the skin on the game. For many who tend to complain and want various changes, if those changes backfire, without skin on the game there is no risk of loss, they can walk away. The staked can't, they incur potential ruin.

This is something people need to consider because what inevitably happens is people will fight for what benefits them without considering the costs to others. It is even easier to complain when the gains or weigh the potential costs of error.

If Steem collapsed right now, what do you lose? For me, I immediately lose 12,000 USD value for the 37,000 Steem Power. That is the summation of two years of a heavy Steem workload.

That is my skin in the game. As they say your stake is your voice and, powering up is putting your money where your mouth is.

Some people are unhappy with a stake based system, especially because of flags. They want to earn risk free without recognising that for those with stake, there is always risk exposure and of Steem fails, it will be the staked who lose out, not those who have earned and sold. This is the game of the holder, risk exposure.

People want a free market system but protectionism from negative market consequences. A free market is just that, free. It includes many positives as well as negatives.

The other aspect people do not consider on Steem is that they fail to recognise what it takes to have Steem power - Non or not complete reliance on needing to access the value of all Steem. This is an opportunity cost situation and carries investment risks as well as life consequences.

People think that Steem lives in a vacuum, it does not. Those that have bought in have earned their stake in other ways, used their savings earned from doing all types of work. Even those who bought in cheap still took a risk of loss as early adopters, a risk many are unwilling to take. We can see this from how few are buying in now, they are scared of compete loss, risk aversion.

Someone who sold 100 Steem at 5 dollars could now buy 1800 Steem with their earnings. Have they? No. They have likely spent their earnings and improved their lives but even if they had the 500 dollars still, their risk aversion is holding then back. They don't want to put skin in the game in case it falls and they get skinned.

But if Steem goes back to 5 dollars, the same people will complain about how those that did take the risk use their stake. They will want them to share even though they themselves have not shared to others. Of course, content is sharing too but that content is not necessarily deserving and those who have taken the risks and will inevitably protect what they own, will use their stake as they choose. Free market dictates terms and they will act in their best interest. Some will reward, some will flag, some will take a hybrid approach. It is up to each user what they believe will add value in the ways they consider valuable.

Holding Steem is ownership and is akin to owning real estate in a town. The value of one's property is going to depend on many factors including the businesses, the citizens, the attractions and of course location, location, location. One might not want their town or suburb filled with drug dens and junkies, even if the junkies don't mind living in squalor.

On Steem, it is up to individuals to police their neighborhood and everyone has a different idea of what is acceptable or not. Those with skin in the game are more likely to take this seriously than an addict looking for their next hit. As I said, everyone will argue for what benefits them and on Steem, that is often what gives them more Steem in the future. What one person considers reward worthy, another might not and on and on a POS system, stake is the vote. Everyone knew this coming into the system and if they didn't, they didn't do even a basic due diligence on a system that they were happily willing to earn from.

Skin in the game is an important factor in life as it exposes action to consequence, yet the internet and ability to hide behind a screen has removed the coherence for most people. They have become accustomed to feel they can say what they want with no repercussions, that is not a free market, it is protected. While the keyboard warriors feel they are fighting, they have no exposure. In my opinion, Steem begins to return the balance by tying action to result and pulls the shield of the internet away, very slightly.

Keyboard activists are largely impotent because whenever it gets too hard, they walk away with no cost other than their time invested so far. And for those with no skin in the game on a POS, they are limited to what they can say - lip service. Fighting the 'good fight' with no transformative action but, they still want to earn while they fight. They aren't warriors, they are soldiers of fortune in it for themselves without acknowledging that without skin in the game, they risk nothing themselves.

I find the entire Steem ecosystem fascinating and find it interesting how many opinions there can be on the same topics. I take the position that there is no conscious selfless act so, everyone wants something out of it for themselves. Is what they expect out more or less than what they put in?

Gotta run.

Taraz
[ a Steem original ]
_{(posted from phone)}