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RE: Steem price and low demand - Fix it finally! Solution is waiting
Ok, but inflation is still killing it. Currently your SP is loosing 10% of value if all other conditions are constant. That's huge inflation. Look, let's say you invest 1000 SP for 1000$, with 10% inflation after 10 years, you'll loose 65% of initial value and you'll have maybe 1 million SP but you will have just value of 348$ due to the inflation. Considering everything else stays constant. That's just wrong. And so you need at least 10% marketcap (not just userbase) growth every year just to preserve your investment. I also don't care about price that much and I will use Steemit no matter what but for really wide adoption and mainly for significant investment there must be business model that makes sense.
Killing it is a matter of opinion. We have basically dropped back to pre-spike levels. The value of SP paints a slightly different picture than the price of STEEM too. You should check out:
https://steemit.com/technical-analysis/@timcliff/historical-mvest-to-usd-price-chart-steem-power-has-not-lost-value-over-the-long-term
Thanks for the link. It says that "Steem Power is meant to be cushion against the inflation." That statement is not correct. It just gives significantly less inflation compared to Steem but there is still huge SP inflation and so it's no cushion in general. "1 MVEST today is still slightly more than it was pre-price pump!". True but I have not seen any alive crypto project that lost 95% of marketcap. Also although it is still true for now there is nothing that should keep it at least that high for the future. Inflation and money outflow (which is currently slowed down) will put it much lower if my fundamental assumptions are correct. There are many new Steem users, but in spite of that price of all measurable units (STEEM, SP, MVEST) is falling down because it's poorly designed and set from investors PoV mainly due to strong investment degradation by inflation and also too strong money outflow (which is currently partially frozen as rewards are currently mostly in SP).
I've read posts that basically described the price spike as an investment round to generate funding to build out the site and fund other projects. Granted the fall from the spike looks really bad, but if you ignore it and just look at the historical price trajectory - the value of SP shares has still gone up (slightly).
I agree. I'm also still optimistic in long-term because Steem creators brought some really smart ideas on the table and that makes me believing that they are smart enough to correctly understand what's wrong now and will be able to fix it soon.
People who say that are just trying to find excuses for the price drop.
If steem wasn't so inflationary the platform would be a perpetual source of funding and the system would never run out of money to fund new projects
That's what attracted me at first, I saw for the first time a self funding model where the blockchain issued new money to basically fund itself. Imagine if bitcoin miners used part of their revenue to fund bitcoin startups, bitcoin would have a lot more marketing going, more quality products and be overall more healthy.
Steem could have been that if the system allowed speculators and investors to take part, unfortunately the inflation and the 2 year lock period prevent them to enter.
That's not correct in general. When 90% of STEEM is powered up, SP has (approximately) no inflation at all (more units are created but it has the effect of a stock split where everyone gets proportionately more shares; no one loses value). When 100% of STEEM is powered up, SP has about 10% net inflation (long term average; currently this is higher). Currently STEEM is 93% powered up, or 86% powered up if you include virtual supply (debatable whether this is correct), numbers which have both continued to fall more or less continuously since the launch. The meaning of all this is that SP currently has very little inflation, arguably negative. The future is uncertain but there is no reason to believe that SP "real" inflation would ever closely approach the 10% maximum in practice.
Thanks for the details. Even that doesn't change my major major objections:
Even now it's a "punishment" for both cases. As I've written we need inflation range that doesn't frustrate users from holding STEEM/SP.
Indeed the investors who bought at the top would probably have a different opinion
Pre-spike there was no app, barely any developement going, pretty much nobody had heard of steem and people didn't even knew if the system worked as intended.
Now 6 month later, many apps have been built, almost everyone in crypto know about steem, the user base has increased a lot, many many projects have come to life, yet we are back to pre-spike level, do you suggest that's where the price should be right now or? Also how do you expect the platform to grow, the investors to buy if the the rewards on the platform keeps dropping as more users use the site?
The value of SP means nothing. STEEM POWER is STEEM. When steem goes down your steem power value goes down.
You seem to want to make a point that VESTs have gain in value but this is totally not true. VESTs are similar to shares in a company how can shares in a company gain value when the overall value of the company crashed?
Steem is stupid to invest in and only a fool would buy Steem. And Steem Power is only useful if it provides some utility you want. Stop trying to sell to short term speculators and focus on gamification, long term thinking, and you will have better people involved.
Maybe short term speculators are trying to take over Steem by spreading short term profit mindsets and "investor" ideology. Snap out of it.
@snowflake No not at all. I think you have to use gamification to make people want to power up. I also think you need to accept credit card and more traditional banking mechanisms so people can for example subscribe to Steemit.
The reason no one is powering up is because Steemit isn't positioning itself as a company trying to profit from power ups. It's trying to position itself as a sort of non profit. How exactly is Steemit even trying to be profitable?
Just tinging with the parameters is pointless and the fact that they want to parameterize everything to give us the illusion that by manipulating the economy maybe we can fix it? But does that work in any economy where you can just change one parameter and everything fixes?
Demand is non-existent. Maybe if there was demand then reducing the supply could be discussed but when there is no demand then it doesn't make a difference how much inflation you have.
Answering here
That's definetely not the reason. Everything is free in the social media stuff, if you gonna start charging people it's a failed business model from the start. Steemit has an advantage over other in that it actually pays .The reason is that people think that it is not worth it to power up, lose 10% of their investment every year, lock their money for 2 year for what? for merely being able to earn a few pennies through curation rewards.
As i already said steem is a complexe system trying to fix problem that don't exist. The hyperinflation has no purpose at all in the system so does the lock time period, so yeah you can definetely improve things by making them more simple and most importantly more attractive to investors. ( today investors are on the bench)
Inflation + no demand = steem at 0.00001 soon
If there was no demand and no inflation then the price would sustain better.
But ultimately the goal would be to achieve no inflation and demand so that the company ( platform) gain value over time.
Thanks for proving what I have been saying for days. Steem has no investment proposition.
So you expect the money to pay for bloggers will fall from the sky or?
Not true. The spike occurred right after they started paying out, but the site had been running with users on it prior to that.
What you are saying is not entirely correct. You should read: https://steemit.com/technical-analysis/@timcliff/historical-mvest-to-usd-price-chart-steem-power-has-not-lost-value-over-the-long-term
Much of the falling price of STEEM since the spike has been to pay for these things to occur.
Within the next ~2 years I expect that they will have the features of the site built out to the point it is mainstream ready, and at that point they will begin selling advertisements of some sort. At that point there will be a revenue stream flowing in to the economy instead of what we have today which is pretty much everyone taking money out of it.
If you believe that it has gotten to this point, then why are you still wasting your time here?
I know the site has been running prior to that, I said people didn't know if it was working as intended ( if it was paying)
The price of steem didn't fall because rewards were cashed out, rewards are a drop in a bucket compared to what whales have been cashing out and what the hyperinflation is doing.
A few hundreds per day is not gonna make any difference and I doubt any investors will pay more than that with 2000 daily users. Having many ways to burn coins is certainely a good idea to reduce inflation but if you rely on this to pay for the ever increasing user base then you are in for a surprise.
You missed the point. I was just explaining to you why a share in a company can't increase if the overall value of the company decreases which is exactly what happened to steem.
@timcliff Steem has good potential but I don't think the parameters need to be altered. I think they need to hire better UI/UX people, and start adding features. The new features are not coming in at a fast enough pace, and the kind of features which need to come in need to appeal to mainstream psychology. People want to stay in contact with their friends but there is no friends list? There is no groups? There is no private messages? There is no video casting? There is almost no social features which people really want?
So of course there is no demand for Steem Power. Why buy Steem Power when you don't have anything to have power over? Why be a king or super hero in an empty virtual world?
@snowflake and @ned is a whale, the biggest whale, yet he is the guy who has the idea to let people reduce the inflation rate? And what if him and the other whales do that, and also get rid of the 2 year waiting period, and then just dump all their coins?
Their interest to dump may be related to the fact that they have the most to gain by immediately dumping. People who actually bought their way in or worked their way up, might not be so quick to dump because they have more to lose psychologically.
This isn't to say @ned will dump, but he is powering down, and he is the founder. So if he is powering down, it is like Steve Jobs selling his stocks.
So why would anyone value Steem Power if the founders want to power down?
Inflation rate has nothing to do with the attractiveness of Steem Power. If Steem Power were valuable and easy to acquire then people would want it and money would pour in to get it. No excuses, there hasn't been any marketing at all for Steem Power. All marketing has been to extract as much $$$ as possible from Steemit via bloggers or short term speculators so what do you expect ot happen?
You could do all the marketing in the world people still wouldn't buy it. This platform says blog, get paid. It doesn't say blog, buy steem power, get paid. People who use steemit use it because of the "free" money. Only investors could be interested to buy steem power but they don't want to lock their money in something they have no idea how they are gonna make a return.
short term speculators are non existent on this platform, they are excluded, that's the biggest problem.
People buy when it's easy to buy using traditional means, and when there is marketing in place. Marketing isn't in place so people don't even know why they would want to buy, and then if they do want to buy then how do they use their credit card or bank account or Paypal to do it?
Think of how Amazon Prime gets people to subscribe. How is Steemit going to get people to subscribe? Short term speculators are pretty much worthless except for supporting Steem Dollars. If short term speculators were so valuable then Bitshares would be the top crypto platform right now and it's not.
People will only support Steem if it's addictive, provides real utility, and is easy to subscribe to with traditional bank accounts. No Bitcoin, no shadow economy, none of this scam ridden crypto anarchist marketing will work.
Mainstream investors have no interest in crypto. So no matter how much you market, you will never draw them in. And the few you do draw in are only interested in pump and dumps and think of Steem as just another sh*tcoin, so why do you want them here?
True, people will use and support Steem if it's addictive, provides real utility, etc. But the same doesn't work for investing. People will use it but they will not buy shares in in. Only if it's so super-cool than you cannot live without it, then maybe. All opinion here has some validity but my point is do easy improvements first and that's fixing current stupid inflation setting. Then start creating super cool features, then marketing and then there will be millions of new users and thousands of new investors and everyone will be happy and all thing will go mainstream.
Amazon Prime is not a good comparison, people who go on amazon go there to spend money so obviously it's gonna be easier to have them spend money on anything when they have he card in hand already.
Steemit wants to be a social blogging site, social media site are free to use. If steemit starts charging people they start with a huge disadvantage. Steemit has potential because it pays users, something no other social media site does.
You seem to have an issue with speculators but you havn't explained why you think they are bad for steemit. You mentionned pump and dump but I don't see how this is bad for steemit. Traders do their business and content creator do their. Both can coexist very well.
This is so 2012, bitcoin is evolving. I think you havn't been paying attention but circle has partnered apple imessage, bitpay partner with intel, an ETF is coming soon, many big company accept bitcoin, if you think bitcoin is still shadow you've been living under a rock man.
Mainstream investors are going to ask themselves how is this platform sustainable and they will quickly come to the conclusion that in its current set up it is not.
Also good luck trying to convince mainstream investors to buy bitcoin, then buy steem, then power up and lock their investment for 2 year. This my friend aint gonna happen.
Answering here
I am definetely not a whale. I wish.
If we get rid of inflation and lock time period and whales dump it's going to be no different than what is currently happening. I mean the price is already at 0.10$ so there is not much room left to dump, but assume they are going to dump. That means that they are going to get rid of their steem very very cheap and so the distribution will happen much faster, bad actors in the system who only care about the money will be out quickly and steem will quickly find an equilibrum when everyone that wanted to dumped dumped and the price can now rise.
Basically it will accelerate a process that is inevitable regardless of the lock time period.
I agree with that. However as i said you could have the best looking site people still wouldn't pay to use it.( power up ) Every social media site is free, you can't expect people to pay money on it. The whole point of steemit is that they can earn money.
They have nothing to gain by immediately dumping at those prices and I can guarantee you that many whales that are dumping know would actually reconsider if the inflation was reduced and lock time period too, because it will make their stash instantly more valuable, the likelyness of steem price to increase will increase 10 fold, people are not gonna dump at pennies.
Because it is the only way to participate in the system and earn rewards through curation. But the barrier to participate needs to be lowered to basically zero . The facts that founders are powering down is irrelevant.
Whales cannot dump quickly currently. Also, what matters is demand for Steem Power and quality content can be used to increase demand.