STEEM Economic Changes Update (@officialfuzzy's thoughts & concerns)
Intentions for this Post
Before I go into this. I must first get a few important messages across to the readers (you). First I understand it is a difficult position for @dantheman and he is brilliant and wants to tweak it like it is an experiment. He has built some unfathomable stuff in the crypto scene and will continue doing so for many years to come. However, these types of changes have always been the ones that scare people out of wanting to invest further into projects. In fact it is precisely these kinds of changes that give people like Tone Vays fuel for their outdoor firepit. So what I am about to say is said out of love and respect with no ill will.
Don't Change the Contract Silly--that is why crypto nerds left banks!
I 100% agree with what @tracemayer and @dana-edwards say about the social contract changing and the perception this will create in the Original thread. The reasons are simple:
- Word of Mouth is the best form of advertising there is. Will new purchasers of steempower prior to this change be spreading words of cheer and fulfillment or words of anger and frustration after this change?
- This completely voids the contract for people holding steempower
- This change completely takes the element of choice from current steempower holders--thus alienating the types of people who do not want to be in an ecosystem where there is little benefit to longterm thinkers. These types of people are the GOLD NUGGETS you want to KEEP in Steem!
- Changing contracts is perceived by many as "scamming"--see Tone Vays comment above
Do you have anything Positive to say?
With that, I am inclined to say that there are some kinds of changes I think STEEM could provide. For instance providing various "steempower levels" for powering up and down might be a very helpful way to let people choose their own risk profile for having their funds locked away.
Little changes during beta (especially when only adding options) are ok. Perceived contractual changes (as @tracemayer says here)---please no. It will definitely cause more uncertainty and only frustrate people who have already bought and powered up steem under a perceived contract.
Instead of taking options away--Give more of them! You can make changes to Steempower and still keep the contract intact--just add more options (and let the market decide!)
So as a simple example, here is how I see steemit being able to give users more than the original contract enabled:
Create 3 "Power Levels":
- Level 1 -- 3 month powerdown, 11% voting power and dilution protection
- Level 2 -- 1 year powerdown, 44% voting power and dilution protection
- Level 3 -- 2 year powerdown, 88% voting power and dilution protection
Note: Give plan number 3 the extra benefit of letting them power down at a % as opposed to the binary choice (100% or 0%) Plans 1 and 2 receive.
In this way, you let the market decide which steempower realm it wants to be in and you give the people holding steempower currently a choice between these options. Then alter the other variables around steempower distribution.
I cannot stress this enough: SteemPower is the ESSENCE of Steem!
Many users have bought into steem thus far seeing a price point at which they considered influence in the steem community's worth it. This will not stop anytime soon.
The price declining with STEEM is the natural, free market way to let this settle itself. If whales sell to the point that steem is driven to $.001 you will just see more whales who power up to compete with them for a much cheaper price. And the nature of STEEM makes pumping the price much easier when STEEM reaches a price point where people want to become whales here. Steem will become very pumpable...which only means more marketcap increases over time (if we are patient). That is because there is not much liquid STEEM due to most being locked away into SP. All it takes is a slow trickle of big buyers who want to become whales on the cheap. If even one person who powers up respectable amounts of STEEM and is legendary at bringing large amounts of value back into the platform, you will be able to see that trickle slowly become more steady until it is a constant streem from multiple wealthy individuals with similar intentions.
And furthermore, let me ask you... if whales powering down steem are secretly building amazing things with their powered down funds, might they drive the demand up without decreasing price? Even through their own selling? Some whales (like me) are doing precisely that with the help of friends and your upvotes...
P.S. Please instead, focus on many more options for distributing to people who participate in thread conversations, events and other means of participation. Give options---That is what Gamification is about!
FYI All the Dan naysaying in this thread is misplaced. Dan argued with me for weeks not wanting to change "property rights" while I am looking for a system that we can make successful and not be susceptible to some of the current economic and cognitive handicaps of Steem Power and hyper inflation.
Much of the OP argument is about word of mouth marketing. Well being on the front line here I will tell you, marketing can be much more effective when your product does not alienate certain groups of people.
I have potential employees refusing to come work for us under these current conditions. I have investors completely miffed by the concept of a no medium-run speculation and two year lock-up environment. It's very clear what walls were up against in the current system.
At the end of the day, blockchains are tools for supporting community interests. As part of the community, these proposed changes are Steemit's desires being expressed to the community.
As I've mentioned before, I, too think that the existing model, although experimental, had legs. It just hadn't found them yet.
BUT
@ned, I usually work as CTO, and I'm usually the founder. When I bring on a CEO, I'm always clear about many things but one is the biggest: You're here to ensure this thing makes money. If I get in the way of that, yo usay so, because if we don't make money this whole thing won't be here at all. So:
My advice: Take one last look around, have a beer/whisky/joint with @dan and the rest of the crew, too, get everyone's opinion, feel out their ideas, and then take an instinctive jump in what you think is the right direction for the site. Tell the internal and external stakeholders exactly why you think it's the right direction, and don't look back.
In the end, either way, everything might go to shit, and it might be your fault. The saving grace?
You'll have fulfilled your role to the best of your abilities.
The other saving grace?
You just might have jumped in the right direction. So, my bottom line here is like this:
And with this call, win, lose or draw,one thing that I hope will enable you to sleep (Sleep? WTF is that? I bet you're thinking) is that this site has positively impacted a great many people. I don't think it's a scam, I think it's a technosocial roller-coaster. Get everyone buckled up, and let's go!
It's not just that. It's also the goals of the investors that matter to a blockchain. With Steem (and previously BitShares) we do have a blockchain that distinguishes between how users use the platform (e.g. with Steemdollars, or simply by posting) and how investors use the platform (e.g. SteemPower). In Bitcoin, we can't distinguish those groups, but in Steem, we fortunately can. However, we learned that the pricing aspect also affects the users (euphoria and despair) further, we make regular users become investors by paying them SteemPower. Thus we don't necessarily have two distinct user/investor groups but rather a strange mix. Let's make sure we understand that something like this has not happened before (at least not to this extend).
That said, I like that the Steemit team is now actively approaching the difficulties we experienced. Looking for some fruitful discussion on Steemfest!
The proposed changes do precisely that--alienate certain people...with your most valuable ones...the ones who actually power up, being the ones hurt by this. I go back to this point because if there is going to be a hardfork that so foundationally shakes steem community to the core, it should be done with the knowledge of this fact.
But what concerns me most is that these gold nuggets we call long term thinkers within community not only will be upset by these changes, but will potentially have theor energy turned against steem.
To me the worst idea is to anger people who could have been our biggest advertisers and participants through the hard times, and turn their energy against us...
I am wondering though what you mean by dan naysaying. It has little to do with naysaying as i put in the very beginning of my post. If you are talking about other people talking down to dan, it is because they have seen this type of stuff before. Big changes like these bring out old memories of big changes that didnt go so well in the past.
And like i said before and cant say enough--give people like tone vays fuel for their firepit.
Thanks for responding and i look forward to more discussion.
P.S. it is less about marketinf and much more about the blockchain changing rules so abruptly and starkly in contrast to the original model that brought is to a 400 mil marketcap. I personally think we will get back there without changes...but big changes will potentially lose more users than it will gain. And as stated before...these are not normal users...but the among the most loyal and resilient to boot. If im gonna makr enemies...id prefer them to be the type of perso who is weak and gives up quickly. sp holders are not that demographic.
Only long term thinkers that don't understand how steemit works will be upset since the new changes will reduce the inflation slightly on steem power holders, so they will benefit from such change.
You know how many BTC brought the market cap to these levels? About 600 BTC. Basically when there is no liquidity you can shoot the price up very easily with very little money but it is a false representation which is why it went back to it's pre spike level.
In a healthy system you would have price consolidation phases, which means the price will find a bottom higher than where it started, from there it would go higher and so on, thats how a real marketcap builds up.
However similar amount invested by @hendrikdegrote could just stop the downtrend for a few days, didn't it ?
Not sure what you're saying. But no one in the 'community' is my investor unless they are on the Steemit Inc cap table. In Steem there is only the community of Steem holders (SP, SD, Steem). And only SP holders have blockchain-level voting rights for Witnesses (and through their proxy, upgrades).
If we are finding opinions by channeling Tone Vays, the guy who doesn't believe Steem is a blockchain, then I'm sorry we are getting nowhere.
“Success is not final, failure is not fatal: it is the courage to continue that counts.”
― Winston S. Churchill
No. Im saying there is an army of people like him and this will just make it harder to combat them. Whether or not you or I like it, toney and people like him will actually have something to point to. Its like givig ammo to your enemy when you are at your weakest (aka pissing off many people who have powered up and paid in blood sweat and tears for it.
As for who your investors are, your definition and the market's may not be the same. I hope for the stake of all steemit and those working hard on it yours is the correct perception. I think its wrong though. Piss off the community enough and see what happens. This isnt a threat. Ive simply seen it all before.
Break the contract once. Breaking trust once is all it takes. I dont care who says otherwise...this is not how it will belooked at.
Final point. What happens if, after another 6 months steemit needs to completely change what makes it steem again? How many big changes will it survive without a large community sharig the weight and believing in the vision?
I dont have a dog in this fight. I have only beem there since day 4 of PTS and right on the field for every piece of history that gives me a background and opinion that should carry some weight.
This, to me, is making the same kinds of mistakes we did in the past. Changing the foundation of steem should be a last resort. Are we at the point of last resorts?
I agree with the changes. The fact is that no matter what you do you will get criticised. This is a "beta" platform and nothing is written in stone. I don't remember any silly promises being made like "code is law". Iteration makes sense while the platform is small and the general community response has been positive.
Beta level platform does not mean changes to the very foundation of the software's incentivization model at a moments notice. And if it does, be sure the market will price thst uncertainty in (making price go down).
The price was already going down. I don't think it will do any harm. We will see what happens in the long term as none of us know for sure.
Cant disagree, but maybe just maybe the simole offering of a choice for whales to power down % of their sp instead of forcing 100% power down would have helped. Maybe not but maybe there are plenty of other options that could. Why go through surgery when you can try to prevent it?
At smooth my point really is that these things are not even in the interface and we are still looking at foundationally changing everyting when people arent even abke to use and test these strategies. Again its lime wanting to give a patient surgery. You only do it as a last choice. Sure we can cite that it is just an experiment, but to my relatively well-versed self, i have never seen an experiment change the foundations of all its prior assumptions before the experiment comes to a close and you move onto another.
You could always power down a portion of your SP using the CLI wallet. However, its largely pointless, since you might as well just power down the full amount for a shorter period if you want to remove a percentage.
Discussion is good, I get fussy's point about the market finding a price and more SP options might be the way to keep everyone happy. I actually think the proposed changes are ultimately better for all as it stands. Ned, you're doing great, keep pushing on. Any dan bashing is retarded and should just be ignored.
We're in beta....lets get it right then gear up for a massive push ;))
Dan has a point about honoring property rights. If we don't honor property rights then what exactly is the stance that Steemit developers have on participant rights protection?
Does the Steemit team honor the property rights of participants? For example if someone has Steem Power but they don't want to convert to the new economics well it appears they have no choice in the matter. They are arbitrary switched to the new smart contract which has new economics. What if they want to be locked in for 2 years and don't want to be able to drain the account in 3 months?
I can think of many security benefits for why someone would want a slow drip over years when it's a significant amount and not the ability to wipe out an account in 3 months. Fuzzy mentions giving people the choice and I think that is a choice some of us would want to have but now it appears there is no way to have that choice.
Here is the deal, Steemit Inc needs to outline a bill of rights, a manifesto, or something so that there is some predictability for these sorts of changes. If there is some set of rules for when the economics can be changed and only when it meets certain criteria then the community can accept it. It's hard to accept it when it looks completely arbitrary or when it's done merely because one group of people feel like it and voted to do it over the interest of the minority group.
+1. A constitution could help guide behavior in situations of suggested change. It would also help manage situations in which tragedy (hacks) occur. Ultimately, blockchains are here to support communities. I'd suggest a Steem constitution reflect that.
Nice one, Fuzzy. I like the 3 power levels idea.
One thing I've been thinking of: why not have a second "Big payday" to boost the Steem Price? At the same time, the publicity would also show Steem is still alive and kicking...
how would you do that? pause payouts now and later pay? not sure it would work though, it can be worked out as a "bonus day"...
Bonus day sounds good to me. Stash a portion of the reward fund (say 10%) each day and then have "big bonus days" a few times per year.
"Bonus day sounds good to me. Stash a portion of the reward fund (say 10%) each day and then have "big bonus days" a few times per year."
this is how you advertise steem ^
Let's explore this...
with current reward pool ~57,600 STEEM daily, 10% would be 5,760 and if bonus day is every 3 month that would be 5,760*90=~ 518,400 which I think is quite a sum and it can even be powered up instead of giving liquid STEEM... not sure how to solve distribution yet so that system cannot be gamed.
I don't see why it would be any more subject to being gamed than any other day, after all the amount paid out is arbitrary and the mechanism is the same regardless ($8K/day now vs. $200K/day at the top price). In fact, attention and participation on the site would likely be far greater than usual on that day meaning abuse would be more likely to be noticed.
yeh. I always thought we could do it on holidays...
Like have a Christmas bonus day on the day before Christmas...
or a Halloween Trick or Treat nite...etc
People like "Bonus" like they like the word "Free".
How did it work the first time?
I really like the idea of having these "big days" as the PR events they are meant to be. The first one went well.
There are so many innovative and amazing things we could do to help steem if people would think outside the box.
um...btw, why you at -6?
I think "big days" would cause, that a lot of great articles would be prepared just for those days. You know, what this reminds me? "Liquidity Event" in Bitshares :D
That would cause a lot of new people would see steemit first time, when it has outstanding amount of great articles on front page! :) I like it! :)
Im digging that noise noisy....
Had a discussion with @berniesanders ...
Upvoted because this is an important perspective that needs to be seen and discussed. I don't necessarily agree, although I'm open minded on the question.
Thanks smooth. So much of steems problems will be worked out organically. The foundation is currently solid enough that a community can slowly grow and govern itself. We need to focus on tools that help people leverage steempower.
Just wait til you see what im working on with @faddat and @baabeetaa and one other person im not sure im able tonlention yet...that will enable whole communities to back a token of their choice with the value of their collective sp ;)
Its all open source planned so if u want to support the efforts of a longterm thinking community member with your upvotes. I could really use it to continue building these open source solutions. Check out www.beyondbitcoin.io if you want to see the start of what we are doing. Much faster thoigh if we get more funding. Ill write about this solution soon ;)
Idea with power levels is quite similar with idea which I already discuss with Golos Team, but my idea has only two levels. I will try to combine it together.
Let's make following assumptions:
Level 0: no power down, 100% voting power and dilution protection
Level 1: 104 weeks powerdown, 80% voting power and dilution protection
Level 2: 91 weeks powerdown, 70% voting power and dilution protection
Level 3: 78 weeks powerdown, 60% voting power and dilution protection
Level 4: 65 weeks powerdown, 50% voting power and dilution protection
Level 5: 52 weeks powerdown, 40% voting power and dilution protection
Level 6: 39 weeks powerdown, 30% voting power and dilution protection
Level 7: 26 weeks powerdown, 20% voting power and dilution protection
Level 8: 13 weeks powerdown, 10% voting power and dilution protection
Number of levels can be changed to make it's user friendly.
This is so much better a proposal imho. Well i might be proven wrong on golos if they are takig steps to give more options to their community instead of forcing any one choice on them.
I hope they prove my early concerns wrong and innovate. But with you there i guess i can expect that :)
I hope this works out well for steem. But i have stated my concerns concisely.
@dantheman did exactly the same thing with post February AGS investors. He just repeat himself. There are no single investor who can earn money with Dan. All whales here didn't invest single BTC. At the end he will left this project. Just look at Bitshares.
AGS doesn't have investors. It never was a security or an investment. It was not an IPO it was a donation to the development. Period!
AGS was share in future DAC under social contract which was broken. Same thing is happening here.
And though technically you are wrong fminerten1, ned and others are still havibg to put time and effort into protecting that decision in the past. This just proves my point more--what we see as real and what potential future investors see are totally different and ignoring this is dangerous.
No. There's just the community and the blockchain. There's no social contract - there's governance and means of opting-in and opting-out built into the protocol.
There is nothing here like AGS. Stop trolling.
I really like the idea of tweaking SP levels and this has been discussed before about making platform engaging and fun with different levels and badges, etc. For a couple days now, I hear community saying it is too soon to make major changes to economy where system only been around ~6 month and doesn't necessarily means that there are problems...
This is precisely my point. We can do so many wonderful things through Gamification that enable us to solve our problems without changing the ground everything is being build upon...
I have also suggested multiple power levels and think it is a very good idea. Thanks for the great post up-voted and re-steemed!
So much could be done just by letting people power down at a % just like they can choose their voting power % from 1-100....they should be able to do the same with steempower.
I have many other ideas I am working hard to try to bring to the community and have help from some really good people too...so lets hope some of these ideas can help us :)
What you proposed would not be technically doable, you can't have a certain inflation % for some people without impacting the other people, you would need multiple blockchains to do that.
What you can do though is give certain badge to people the longer they stay powered up for example, or the community could collect some rewards to give to the strongest holders,etc..
@officialfuzzy can't properly reply, but: had a discussion with berniesanders...
Well i hope you dig yourself from that hole buddy...lol
Hey, I'm back to -5 already. Within two years my posts will be visible again, I can feel it!
Aaaaand back at -7. What a wanker, that @berniesanders
If I catch him going to a Steemfest, we'll make lulz on his face
SteemPower is in fact the essence of steem.
It its also what kept steemit from crashing after some people decided to flock from steeemit prematurely.
Amazing things take time and people are inherently impatient.
Yes and even the most brilliant people can sometimes look for solutions to problems that actually do not exist when patience is added to the equation.
Unless there is some terrible black swan Dan sees coming that is unavoidable and this is a last ditch effort, his proposed changes to Steempower are someting I would prefer not to see implemented. Dan has been surrounded by many of these people for a long time so I hope he realizes that giving longterm thinkers the ability to put into steempower for the longterm just opens up one of the most beneficial demographics for his experiment--the ones who think about this less in terms of money and more in terms of building value.
Patience (as long as the economics of steem are not secretly failing) imho and perhaps expansion of possibilities for using steempower.
Well, most obvious black swan would be collapsing of SBD price
Agreed, though there is no sign of that happening at present that I am aware of.
We have seen it go pretty low, but it generally floats around .8-.9
SBD price floating around 0.9 is not something you can rely on to happen just naturally. I quote @smooth
from here https://steemit.com/witness-category/@smooth.witness/witness-sbd-pegging-policy-update
When I put on my "company CEO hat", facing this situation, an investor willing to pay off company debts (1.7 million SBD ) in exchange for something like "blocking minority ownership" would get a special treatment.
Maybe not, but they have effectively survived a black swan already and if we keep a solid snd happy community, we will have the trust that will not shock and scare the market.
Additionally, and most importantly, people who are building onto steem need a solid foundation. Shake it tok often and they leave. Then try backing anything with steem :/
I thank you for bringig up this valid concern.
As for the CEO hat I understand this perspective but if you risk losing your earliest and most loyal groups of people?
If you take a look at the rich list, quite some percentage of debts are in the hands of "trusted people". I have strong confidence that a black swain event won't happen in the near future, even if the price of steem token drop further.
(I agree that hurting the price of steem does increase the possibility to a black swain event.)
One thing I very rarely see come up in these discussions is how will steem handle the growth of this platform. That's the main question anyone should ask, are the changes aligned with the growth of steemit?
Steemit's success is directly correlated to the rewards on this platform ( price/steem)
If the price per steem would be 10$ it means that reward on the platform would be roughly 100 times higher , so the average trending post would be worth about $20 000 .
A platform with high rewards attracts more people but more importantly if the price of steem is solid and growing it means the platform is sustainable and has room for growth. ( This is what every investors is looking for)
If we look at the current system, the high inflation works against the price of steem and as such works against the growth of the platform. The more coins are being printed the lower the price per steem and so the lower the rewards, even worst this process is exponential so it will be harder and harder to get a high steem price ( not market cap)
The new proposal however is totally aligned with the growth of this platform as it creates much better conditions for the steem price to grow (rewards on the platform), by reducing the inflation to 9.5% the currency suddently becomes attractive to hold. Also the fact that investors won't have to lock their steem for 2 years makes it a lot more likely that people will buy it.
In the future this inflation could be reduced a lot and even come to a point where the supply is actually going down ( this should be the ultimate goal, as we've seen we need the price of steem to grow organically to sustain the platform and handle the new users, when supply goes down the price can go up without any people buying more steem)
This can be achieve by burning coin, with the promoted feature, with advertisement, with steemit gold type stuff, or heros status,etc...
When you have a currency with low and decreasing inflation and intrinsic value, it is bound to go higher in the future. In these conditions many people will buy and hold the currency.
Before we can assume growth we first have to build something attractive enough to grow. Yes if there is more money flowing around then of course it's easy to attract people. At the same time, money isn't the only way to attract people.
Steem has a problem in that it put all the marketing into attracting bloggers, so now we got so many bloggers that the reward went down and down to a point where now it's no longer profitable to blog. So of course it's less attractive to blog now, but it's like with mining. The improvement of UX/UI can make Steemit more sticky and people will post even if they don't get much payout, but then there is the question of how to boost the market cap for Steem?
I don't believe there is any quick fix. I don't think changing the economics in this way will guarantee a higher market cap. So I see it as a very high risk change where the cost of failure is high and success rate is low. Success is not guaranteed like with restoring user funds after a hack or restoring accounts, where you know if you succeed the majority of the network of participants will be happy. In this case, we have no idea how people will react, or what the price will do, so it's a complete gamble. Why should I assume just lowering the supply will create demand? And without demand any price increase is temporary. Temporary as in it might last a week or a month.
Because people will finally be able to invest in steem without locking their money in a 2 year contract.
Some people want to be locked in a 2 year contract! That was my point. Not everyone wanted to day trade.
There is a security benefit to being locked in for 2 years. It means you can't be coerced into draining your Steem Power. The more you get rid of that the more attractive it becomes to thieves.
You can do that with the new changes too, even 5 or 10 years if you want.
Let me ask you one question
How much of your personal hard earned money did you invest in steem power? ( and if you have proof for it even better)
The reason I ask is because the perception of people who invest their money VS people who invest their time is very different.
People who invest their money want a return, people who invest their time are more likely to want power than money.
The problem is that this platform can't survive based on only people investing their time alone, to support the rewards you need investors that don't necessarily want to participate but want a ROI.
You have a point here. People should be extremely carefull with their personal info on a site like this, regardless of lock time period you could easily get a visit from thieves. Anyone with a large amount of steem/steem power that openly share his/her address/info on a site like this is an idiot.
Don't you see some people have a large amount of Steem Power? I mean I guess I don't see the benefit of forcing the change on people who didn't choose it. If you make it so people can choose a lesser Steem Power then that would be a better solution for people powering up in the future.