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RE: CASHFLOW OR CAPITAL APPRECIATION? - WHAT IS THE TRUE VALUE OF STEEMPOWER?
Very good comment. Just want to clarify: the inflation is only 10% per year...it is no longer as it was in the beginning.
Very good comment. Just want to clarify: the inflation is only 10% per year...it is no longer as it was in the beginning.
Inflation hurts everyone and people who keep harboring thoughts about "free money" should banish such ideas. The reason why people flock to Bitcoin is simplying because it has the value proposition to function much like "gold."
Scarcity is not always a bad thing though. I look forward to read more high quality post from you and engage in though provoking discussions. :D
Also, the inflation of any currency, be it fiat or crypto, needs to be justified by its demand. If there's no demand then on the long run, its value will be essentially worthless. Now, if we were to treat steem dollars as a "proxy" for fiat money, 10% rate of inflation seems extraordinarily high.
Inflation of the Euros and US dollars are below 5% per annum. If the number of active users stop to grow, it will definitely hurt people who are deeply invested in this platform.
Bitcoin's inflation rate was 30% to 50% before 2011. I think we are okay.
Future expectations for inflation are also critically important for a currency and everyone knew the disinflationary path that Bitcoin was coded for. I'm not sure we can say that as easily about Steem, can we?
U.S. Inflation averaged 1.9% over the past ten years. I don't think the Euro has been much different. 10% inflation per year causes your purchasing power to drop by half every 7 years, not good.