Excellent post. Thank you for diving into details, even those many of us may like to psychologically ignore such as the behind the scenes taxation via inflation. Many have incorrectly talked about "interest" (myself included, as I posted two articles on the topic), when it more accurately should be considered a stock dilution which, as you pointed out here, creates inflation which is a form of hidden tax.

The part that many (myself included) get confused on is the USD conversion price of STEEM and SBD. The market shot up to around $3-$4 pretty early on in this experiment and, for some reason, is remaining somewhat stable. Even as that inflation is happening every day, the market price is holding. Could it be the liquidity rewards propping up the price? Could it be speculators just pumping/dumping an altcoin with no clue how it works under the hood? I guess time will tell.

As to that USD value, I'm also reminded constantly about the 10,000 bitcoin pizza. What mechanism enables 10,000 essentially worthless tokens to skyrocket in value to over $6.5M in just a few short years? The more we can understand that mechanism, the more we can understand another important aspect of the STEEM economics. Taxes on a hyperinflated currency are essentially worthless. The perception of value in STEEM is what powers this economic system. My biggest question is, how much of that future value is being priced in right now? With Steem's potentially superior technical advantages over Bitcoin, it's not inconceivable to imagine (even if only by a small probability) it becoming more valuable than bitcoin. Maybe the market things that's a 0.5% chance at the moment, which would explain the prices we see now: $650 * 0.005 = $3.25.

Personally, I think there's a higher chance than 0.5%, but we also have to think about the time-value of money. If Steem does threaten bitcoin, will it happen in 5 years? 10? Interesting stuff indeed. I for one am enjoying this experiment far more than I enjoyed watching bitcoin develop since 2013.