The Inflation of Steem Explain - Why is it good for you?
A lot of people on discussion boards and forums talk about the inflation rate of Steem as if it is a bad thing.
In this video, I explain why the inflation from Steem is desirable.
Let me know what you think in the comment below!
Inflation is an accounting artifact. You could achieve the same thing with a negative interest rate on STEEM and having no inflation.
Great explanation bossman. Thanks! edit: and thanks for actually reading alot of peoples stuff, thats so badass of you!
Yes, that's a great point.
It's refreshing to see business owner's like Dan and Ned actually believe in their products to the point of dedicating every last waking minute to it. Actually, they both probably have Steem-dreams too =P
I agree
coughs ECB & JGB
I just put this together about how Ned's making $700k+ a week related to the Steem Power interest rate, and then I saw your video. I'd love your input on my post and what it might mean for the future of Steem.
So much of this gets confused because people are talking about STEEM (and, to a degree, Steem Back Dollars) and Steem Power, but to me it makes more sense to talk in terms of VESTS and what activities are changing those VESTS and how those numbers impact the distribution of new Steem Power by the miners as the interest rate (or conversion rate) between VESTS and Steem Power settles to the 12% it will be in 9 months.
I think, this is not true what you said in 3:35.
You said, that people will make more than 200% return on STEEM?
If STEEM has 100% inflation a year, this mean, that it lost 50% of value over a year..
because 1 STEEM Power is Equal in value 1 STEEM, eventually value of your STEEM Power also drops 50%.
Later you gets 90% from those new coins... what will give you only 95% of INITIAL value of you STEEM POWER.
So:
STEEM is not for holding - this is technical token, which can be used for speculation
STEEM Power is a token for investors, which agrees that 5% of their investment will be given to most active users, potentially even to them.
Conclusion: You shouldn't not invest more than 20 times than you can earn from rewords over the year.
What means, that the only way of stay a whale on STEEM forever is... to become a creator which is popular equally over the years...
Please correct me, If I am wrong...
As far as I know, the currency inflate by 100% every year, and 90% goes to steempower holder. So the return on your Stempower depends on how many people have SteemPower.
Say in another way:
There is a predicatable amount of steem that will be given away to SteemPower holder which is 90% of market cap every year.
Ex: If 60% of all the available Steem on the platform are in users SteemPower account. Then 90% of the inflation would be shared with 60% of the available currency. So you would have higher than 90% return.
But If 100% of all the available Steem on the platform are in users SteemPower account. 90% of the inflation would be shared with 100% of the currency which would give exactly 90% return. (This is unlikely because at all time you will have at least some users holding Steem)
So, at the minimum, Steempower holder will have 90% return/year on their Steem.
Edit: You can calculate the interest you earn on Steem anytime by refreshing the browser when looking at your wallet and calculate how much time it takes to increase.
What is the interest rate on holding Steempower? Is that a constant? @noisy @alexfortin
As far as I know, It is not constent, depends on how many steems of the total supply are hold in SteemPower
90% of the steem rewards will be distributed between whoever hold steempower
"90% of the steem rewards will be distributed between whoever hold steempower"
The reward for using Steemit is 50% Steem Dollar and 50% Steem Power correct?
@ynotplay
The reward you are pointing to 50%-50% is for content creator only. And this is only 10% of the all the token that get created.
There is another 90% that get given away to SteemPower holder, no need to create content.
Ok, this makes some sense. So actually I described on edge case, possible in theory, but edge case.
Do you know where information as proportion how much STEEM and STEEM POWER now are right now, can be found? Also some historical data...
Calculating average annual interest rate based on daily constantly changing daily intrest... can be IMO not so accurate.
Nice post Alex! Please take a look at my follow-up post:
https://steemit.com/inflation/@asch/the-real-reason-why-steem-will-make-you-rich-is-the-low-velocity-of-steem
Thanks
Steemit will be a good lesson in economics for a lot of people.
Thanks! Great video. Thanks for sharing. No currency has remained dominant in global trade for more than 100 years since the fall of the roman empire...until STEEM!
Cryptocurrency for the victory.
I completely agree. This is one of the most exciting things about Steem at the moment! Plus, we are so new that we are gonna see massive changes in our wallets in the long run! :)
yes, very exciting!
Very interesting video, in my opinion will not be problem with steem inflation if user base grows
I agree
great explanation @alexfortin
Thanks
interesting video and now i have a better understanding - thank you
Glad I could help