Proposed Changes to Steem Economy
The past several months have brought us a great learning experience in Steem.
It is time for the community to take a hard look at its technology’s underlying economic structure to see if we can improve things to make the community more attractive so that it can fulfill its mission of becoming the largest and most empowering network possible.
Many people have expressed concerns about the inflation rate of STEEM. Steem was designed to encourage people to hold long-term by penalizing those who would hold for shorter periods of time. The vast majority of the inflation in Steem is purely an accounting artifact of the Steem Power, but this accounting artifact has real world psychological impact of continuously falling prices.
There is one class of user which the Steem protocol ruthlessly punishes and that is the short-term speculator. Anyone with a shorter investment horizon than 2-years is unable to participate in the Steem Platform which is discouraging people from bringing capital and increasing liquidity.
The long-term divesting schedule of Steem Power means the network is less efficient when it comes to price discovery.
We would like feedback on upgrading the network to support a new token production model that we believe is more attractive to more people.
Summary of Proposed Changes
This would include the following:
Set a fixed instantaneous annual creation rate of 9.5% from all sources (except Steem Dollars conversion)
- Allocate 75% of the created Steem to the Reward Fund.
- Allocate 15% of the created Steem to the Vesting Fund as interest on Steem Power.
- Allocate 10% of the created Steem to the Witnesses.
Witness rewards would be rebalanced such that the top 19 would earn 1/29th of the witness rewards, the runner up witnesses -would share 5/29th, and the miners would share 5/29th.
Witnesses and miners would be paid in STEEM rather than Steem Power. All votes for witnesses would expire after 3 months, this would remove the incumbent advantage and require people to continuously evaluate and vote for witnesses.
To support more equal opportunity mining the mining algorithm would be updated to use Equihash (similar to zcash).
Reducing the Steem Power holding period to a minimum of three months.
Lastly, under the new inflation rate there is no longer a need to perform a reverse split every 3 years. This would greatly simplify the life of exchanges.
Pro & Cons
All changes to the protocol impact how individuals perceive the value of Steem. Under the proposed changes Steem Power holders may gain significant liquidity and reduce their long-term risk exposure, both of these things could add value to Steem Power. The STEEM token may become much more appealing to hold when the inflation rate is imperceptible impact on the daily volatility. Those who wish to exit the platform would be able to leave faster through powering down than they could by abusing their voting power. Greater liquidity means faster price discovery and greater market confidence in the price and market cap. Steem can now transfer from weak hands to strong hands.
In the short term these changes could cause the market to reprice Steem based upon the relative value of the short term increase in supply relative to the benefits of reduced inflation.
Author/curation rewards in terms of STEEM would be reduced by this change in the short term, but would be much higher in the long term. Witness pay would be reduced in the short-term, but would be the same as the long-term plan. More witnesses would be able to be involved even if they are not in the top 19, this could increase diversity and competition in the witness pool.
Currently Steem Power holders are earning a slight negative inflation adjusted return on investment. Under the new model the market could discover a new equilibrium between holding VESTS vs STEEM which may result in Steem Power having a positive inflation adjusted return on investment.
Please provide your feedback below and reply with your support for or against these changes.
This would serve as a poll of steem holders and give us an idea of where the community stands.
- Ned & Dan
Why is any of this important now? The price of Steem is moving toward its natural price point according to the economic laws of supply and demand.
People with Steem will not just keep selling Steem for lower and lower prices, some bottom number must be close to be revealed as a stable price swing trend soon . . .
Steem was just ridiculously overvalued after the july 2016 payouts and has sold reliably all the way down toward its natural market value price point. Consider this Amazon stock sells for 700 $ a share, if someone values Amazon stock at 1,200 dollars a share the price of amazon stock will auto-correct to the buyer & seller trading price ( = $700 ).
Just because some fool priced Steem at $80 a tonne or whatever price point does not mean that idiot knew the real value of a prototype platform website.
I remind all the price of steem has moved toward its normal buyer and seller exchange rate, it has not fallen at all. Plus you cannot trade stock with a buyer so the whole time someone has been paying real money to buy up steem as the price auto corrected downwards ! ! !
STEEM should also become a currency. In its current form, STEEM is very difficult to bootstrap as a currency.
Why should STEEM become a currency? What advantages will it have over SBD?
STEEM as a currency adds value to the ecosystem even if SBD becomes more effective.
I've heard this from many perspectives - same thing. Nobody wants to hold, even for commerce only, Steem. The promised inflation makes it a hot-potato only good for day-trading.
Its not even good for day trading.
Haha, puts anyone?
I don't know anything about the economics of all of this, but from my limited knowledge, I was under the impression that STEEM was basically a tool necessary to convert its short term value to long term vests. Which is why holding STEEM loses value, but powering up can actually gain interest. Am I wrong in this?
Women are fantastic with currency. Far superior than men in fact, the reason you see so many males as stockbrokers is for their career portfolios. Men are 90 to 95 % failures at making stockmarket profits. Females average 40 % as successful longer term stockbrokers. There are far fewer female stockbrokers and they are all out of sight taking money off the silly men ! ! !
That is not my opinion that is two separate written articles about stockbrokers . .
I would love to read those articles @crok :)
Unfortunately they are written in books in the bookstore. But to summarize, males are full of bluster and noise. Females tend to quieter and more in the background.
Males forget that losing money is bad and get hits of testosterone and lose money. Think about it, the real stock market does not print money, it must take profits off other speculators. Men consider they can just win more money if they make mistakes.
Females view money as safety and security, they take cash deadly seriously. Thus female traders tend to far more systematic at viewing all the data before placing their bets. Women tend to make far fewer trades but ' win ' 40 % of those gambles. Males tend to win 5 or 10 % over timed averages . . .
If you are not trading cryptocurrency maybe you should gamble five dollars : )
Just remember all the hints and tips and books and articles are designed to suck you in and make you lose money. Since i started my new trading strategy i have not lost once out of over 150 completed wins.
My winning average is 99% and you can easily learn it if you think and work out bets for yourself. never follow guesses and never follow advice : )
Consider if anyone truly knew how to make money they would make money for themselves and retire onto a yauct for life ! ! ! Anyone offering you tips or advice is out to hurt you ; )
I don't think it is a question of natural price point but more about the structure and whether hyperinflation is actually useful or just serves to make the platform more complicated and less attractive to a wider range of users and investors. I don't think it serves much if any useful purpose. It was a sincere attempt and a good experiment but now that many of us have experience with the platform and understand it better, we can see that the hyperinflation model should be dropped.
Hyperinflation, or specifically the effects of powering up, kept money off the exchanges, which has proven to be possibly the biggest point of failure in crypto. With the new changes catering to speculators, exchanges will most likely become the single biggest point of failure for steem.
We will need to get the community behind pushing exchanges to use best practices - savings accounts and account recovery partners.
yes. It shows great strengths that Dan and Ned are able to take their idea and agree that it was not the best.
hyperinflation aka steembabwe = no bueno. The worst part is that it makes the oligarchy problem even worse. A flat rate inflation is highly meaningful for the top 100 accounts and means basically nothing for everyone else. Ben Bernake would be proud, but Joe the Plumber gets fucked. The sooner it's gone the better for everyone.
"People with Steem will not just keep selling Steem for lower and lower prices, some bottom number must be close to be revealed as a stable price swing trend soon . . ."
The price has been in steady decline and could find it's bottom near doge if nothing is done.
Steemit is a totally unknown Social Media Blogging platform based automatically around a BlockChain.
The price of Steem cannot be in decline when it was purposefully overvalued in the initial phase.
All Steem has been doing is moving toward its own natural price point according to the economic law of supply and demand.
Just because people are preconditioned toward fear and the herd mentality, they are shown graphs that have no basis in reality (such as a trend line going down) and everyone starts running around like chicken little screaming the sky is falling . . .
Not a big fan of only 15% going to the vesting fund. Under the current system the worse case effective dilution rate on fraction of total VESTS for a passive holder is 6.7% per year (not counting SD conversion effects of course). The proposed changes would make that worst case rate 7.4% per year. My preference would be to have at least 25% of created STEEM go to the vesting fund. With those numbers the worst case effective dilution rate on fraction of total VESTS for a passive holder becomes 6.6% per year. And by the way, the dilution rate for fraction of total STEEM for a passive holder would be 8.68% per year under this new inflation rate of 9.5% per year (again ignoring SD conversion effects), which is a very nice improvement for short-term speculators compared to the current 50% per year number.
By the way, if we are considering these kind of large changes to the economics of the system, I would rather see the hardfork include my proposed change that creates two classes of VESTS (investor class and author/curator class) which I have discussed previously in Slack, but of course that is a much bigger change and actually somewhat independent of the changes being discussed in this proposal. But I mention it because it does have to do with the inflation numbers being discussed. For example, if we were to make such a change, while the investor class VESTS worst case dilution rate would be the same (or at least really close to) that of author/curator class VESTS, the typical dilution rates for investor class VESTS would likely be considerably lower (perhaps even 0%) than that of the author/curator class VESTS (who would be paying that higher rate for the ability to earn curation rewards, have post-voting influence, and possibly other benefits). I have crunched through some of the numbers and I think the following would be a decent configuration: 50% of printed STEEM goes directly to reward fund; 20% of printed STEEM gets budgeted by the top 19 witnesses to pay for the block producers, top 19 witness operations, and other chosen workers that can add value to the community;
(fraction of total virtual STEEM supply that are powered up as author/curator class VESTS) * 30%of printed STEEM goes directly to the author/curator class vesting fund; enough of the remaining printed STEEM goes into investing class vesting fund to completely cover, if possible, the inflation that investor class VESTS holders experience (but no more, i.e. no deflation); and if there are any remaining printed STEEM left, they all go into the author/curator reward fund again. With this configuration, the effective dilution rate for author/curator class VESTS would be a constant 6.16% per year (which would also be the worst-case dilution rate for investor class VESTS, although typically I would expect it to be much less).I also disagree with how the proposed changes would split up witness rewards. @smooth and I discussed this a lot on the Slack and steemit.chat (BTW, I honestly feel like the devs are missing out on really great ideas and useful interactive discussion by completely ignoring the various discussion forums available to this community). At first I was thinking the witnesses should just get paid for block production and other responsibilities should be separated into a different role.
Under that philosophy, a major rebalancing between the top 19 witnesses and the runner-up witnesses and miners would be necessary as this proposal attempts to do. But I am not a huge fan of the way you are proposing to do it here. It could be possible for a witness at rank 20 to earn more than any of the top 19 witnesses (over the long-term) depending on the distribution of votes among witnesses. For example, if the sum of the votes for enabled witnesses other than the top 19 enabled witnesses is less than 5 times the votes for the rank 20 witness, then the rank 20 witness would earn more than any of the top 19 enabled witnesses (to put this into perspective, the one-fifth of the sum of votes for enabled witnesses between ranks 20 and 70 is approximately 70.4% at the moment). What I think would work better is to instead have the pay to the top 19 be determined by the fraction of their votes relative to the total votes
Tfor some large number (say 200) of the top voted enabled witnesses. This would approximately simulate what their pay would be (over a long enough period) if every block producer slot (other than the miner slot) was allocated according to the runner-up witness scheduling algorithm. The miner pay would have to be determined through some other method. If we want to reward the top 19 witnesses more because of their added responsibilities, then some fractionf_mof the witness/miner pay budgetBper round would be allocated for miner pay, some other fractionf_bto block producer pay, and the rest of the witness/miner pay budget would be allocated as supplementary pay to the top 19. Let us denote the votes of witnessithat is one of the top 19 enabled witnesses asv_i, and the total sum of votes of the top 19 enabled witnesses asV(V = v_1 + v_2 + ... + v_19). Then, the amount paid to the miner would beB * f_m. The amount paid to the runner-up witness would beB * f_b * (1 - V/T)(unless there were two runner-up witnesses and no miner scheduled in a round, e.g. because of an empty mining queue, in which case they would each getB * (f_m + f_b * (1 - V/T))/2). The amount paid to top 19 witnessiwould beB * (f_b * (v_i/T) + (1 - f_m - f_b)/19). After each round, the full amount of rewards allocated for witness/miner pay for that round would be distributed; if some witnesses/miners missed their block, their pay would go into the author/curator reward fund instead. I think the top 19 witnesses could vote on the fractionsf_bandf_m, but there could be hardcoded minimum or maximum limits on those fractions.But actually now I disagree with the very philosophy that the pay budgeted by the blockchain to the top 19 should be the same or close to the same (e.g. over a week) as the other witnesses. There are greater expectations placed on the top 19 in terms of reliability and in terms of setting policy with their parameter updates. They are not only acting as block producers but also a committee (to use BitShares 2.0 terminology). Originally I wanted to separate out the committee role from the witnesses and have that be a separate group that was elected, but after some discussion with @smooth I changed my mind and decided that may just be an unnecessary complication. Now technically the implementation described in the previous paragraph allows the top 19 to get paid for more than just block production responsibilities (just make sure
f_m + f_b < 1), but it is not good enough in my opinion to allow for a worker funding mechanism via the witness budget.One thing I knew I wanted and still want is an official worker funding system (taking a cue from BitShares 2.0 again) to avoid the non-ideal ways many witnesses currently use (as delegates used to in BitShares 0.9.x) to pay other people with their witness pay (except the problem is even worse in Steem since witnesses are currently paid in Steem Power which is not liquid). But the worker system I want for Steem is one in which the elected people decide how to distribute the limited funds available to them rather than the stakeholders directly making those deicision as was done with BitShares 2.0. Regular users don't want to think too hard about every little worker funding decision; they rather elect people they trust and let them make those decision on their behalf, and of course they have the ability to vote them out if they don't agree with their decisions. So originally I wanted the elected committee to reach consensus on worker funding decisions, but now, if the committee is just going to be the top 19 witnesses, I was convinced by @smooth that it would be better if the top 19 witnesses should each be given control of some equal budget (taken from the fraction of created STEEM directed toward witnesses) and have the ability to instruct the blockchain to automatically direct that budget each round to the various accounts (workers) they want to fund.
I discussed the details of a possible implementation of this mechanism on steemit.chat, but I will repost it here:
So with this mechanism, each witness would obviously specify a
worker_itemto pay themselves for the role of being a top 19 witness (of course they would only get paid for the round if they are actually in the top 19 for that round and are enabled, i.e. have a valid signing key). They would only be able to pay themselves an amount out of their allocated budget that stakeholders accept (otherwise they wouldn't stay voted in), so effectively the market determines the appropriate pay rate for the top 19 witnesses. But they can also specify otherworker_items to pay other accounts (e.g. the accounts of those working on development of useful services in the ecosystem or working on marketing and advertising to reach a larger audience). The runner-up witnesses and miners are paid out of the backup witness pool which is funded according to the top 19'sbackup_witness_budget_percentageparameters as described in the above quote. Any amount of the top 19's budget not allocated elsewhere would go to the author/curator reward fund acting as extra rewards on top of the minimum amount guaranteed by the hardcoded rules of the blockchain. Because of this, the hardcoded percentage of created STEEM that goes to the author/curator reward fund can be lower since it is only a blockchain-guaranteed minimum; typical values would likely be higher unless stakeholder-elected witnesses have better places to send that extra money (e.g. dedicated workers improving the ecosystem, accounts that use the received STEEM to buy and burn SBD to help with the peg, perhaps directly into the vesting fund to further compensate for the effective inflation experienced by VESTS holders, etc.) rather than letting it go to the general author/curator rewards pool. For that reason, I think it would be acceptable to have only 50% of created STEEM go directly to the author/curator reward fund (remember, that is just the minimum blockchain-enforced percentage), 25% of created STEEM go directly the vesting fund, and the remaining 25% of created STEEM get allocated towards the top 19 witness budgeting mechanism described above.The rest of the proposed changes look fine to me, although I want to know more about the details of how witness vote expiration would be implemented.
Wow, thanks for all your work on this response. I really wish I could understand 2/3 of it. :) Like the adjusted distribution at the end though. I understood that!
I wish I could understand the 2/3 too :D but there is no doubt @arhag made an amazing job explaining his proposition.
Meh
way to go man!
@arhag, you rock. You make me want to learn more math. :)
One change we forgot to add is a reduction on SBD conversion delay from 7 days to 2 days. This should dramatically reduce risks and strengthen the peg, we can probably remove the 10% premium we are currently giving for conversions.
I think two days is too short, and something like 3-3.5 days is better. If there are problems with mulitple feeds (for example due to buggy scripts or failed data sources), which has already happened, it can take hours or longer for them to be fixed (witnesses need to be contacted, scripts may need to be edited, etc.). Likewise for any sort of malicious manipulation (which would likely involve collusion between witnesses, though not necessarily, and not that many). While it may big fixed well before two days, during the time until it is fixed, the feed is still being filled with bad data. To ensure this bad data is not a significant portion of the overall dataset requires that the window be significantly longer than the failure.
The 10%, etc. discount can be reduced and will likely reduce anyway as a consequence of lower inflation, an APR that is more realistic given the risks of storing capital on a risky experimental blockchain without potential for upside (of course we hope this factor can also reduce over time), and not allowing the debt load to grow too large before addressing it. In fact I was already considering a feed discount reduction now that we have a higher APR, once the debt load decreases (which seems to be happening this week). I do think even long term a small discount is probably needed under 'average' market conditions, regardless of feed window (though maybe not in the low-infation model). There is still a time cost to receiving payment 7 days forward vs. trading directly and receiving immediate payment. Under stressed market conditions that cost can be very significant (even for 2-3 days).
I do think that 7 days is a bit of overkill and three days would work pretty well. That means hypothetically 12 hours of bad data would still be only 1/6 of the data set and 24 hours (a more realistic time period to vote out misbehaving witnesses) would be 1/3. That said, 7 days gives a lot of robustness to the system. Despite individual failing feeds, a systemic failure due to the Bitstamp hack, some witnesses failing to update for days on occasion, there has never been a case when the fairness or robustness of the 7 day feed has even been called into question. That says something.
In my opinion, the biggest problem with SBD is not the feed delay and accompanying price volatility (in a well-functioning market even with current high inflation that would still only imply a few percent of discount or less), it is excessive debt load on a still-shaky backing asset with low liquidity making SBD risky and hard to trade (including conversions). Please consider the proposal I have made here. Again, of course hopefully this can improve and indeed this proposal will likely improve liquidity directly and therefore the peg indirectly.
I would propose the change is to three days. I do not believe many will argue for two days over three at this point in time.
Most of us are Bitcoiners or formerly so. We could bike shed this issue for years.
Yes I think this is good. Also the reason for the heavy discount is the constant downtrend and of course the health of steem overall.
Very likely the reduction of money supply increase per year from 100% to 10% will already stabilize the price and therefore also bring SBD closer to the peg.
What about the referral system? It seems like there was an unannounced one put in place, or the structure set up for one soon to come.
^^^THIS!
i hate refferal systems they seem to give the impression of scam...
Would it make sense the conversion delay to be random* from 1 to 3 days for example? (So average conversion delay =2 days) Would it be not more secure with the same end result?
Thank you Dan for Steem! I see its potential to change this world for the better.
Those proposed changes will definitely make Steem better.
Any idea on a timeline as to when those changes could be implemented would be nice be either way I'm very enthused by them.
Not sure if this is a good idea or if it would be open to gamification, but I'm throwing it out there for feedback/consideration:
If we are going to significantly reduce the SP holding time, we may want to exclude SP that is part of a power down from participating in curation/rewards.
Pretty sure Ned suggested this months back. It'll definitely be an incentive to hold SP. There should be plenty more of those - there should be a solid incentive to not power down. And yes, partial power downs should be possible, of course.
Any time you add an incentive to hold something you add a discouragement to buy it. That is largely what this entire proposal is about. By adding a lot of restrictions and demands on how investors are "supposed" to behave, it tells others they are not wanted. I prefer a "big tent" where anyone who wants to invest their capital in this system is welcome and not (more than security requirements dictate) disadvantaged because their particular approach to investing might differ from another person's approach.
IMHO, I feel all friction should be removed for investors, and question making Steem Power liquid. (Though of course that would be a long term goal, for the short term 3 months sounds fine.) 9.5% is a low enough inflation rate to not require a hard lock in period, which will probably psychologically discourage investment much greater than that amount.
Even so, there should be incentive to hold Steem Power, and it could be driven by gamification of the platform. Other cryptocurrencies have thrived without any holding period, while free to play games have thrived through gamification.
Of course, a balance needs to be found between the two...
Makes sense.
What's the benefit? Why complicate it when the SP will be off the market in a week anyway?
not SP from a weekly portion... all SP.
Oh, that would be brutal. I don't think anyone would want to go for that idea.
It would basically be a change to be either "invested" or "cashing out". If you wanted to cash out 20% of your funds, it would be removed from your voting power and dispersed over 3 months. The other 80% that was not being withdrawn would still be vested and count towards your voting + curation rewards.
Basically users would need to decide if their money is in or out.
But what if I want to cash out 20% in three weeks? A full powerdown under the proposal would accomplish that, yet I'd be penalized 100% during that time. IMO, this becomes very over-complicated and cumbersome. There seems no real value to it. Just let people vote on what is in their account, just like you would with votes on stocks. You either have them or you don't. If you sell them, it's done.
I do not see a reason to give a voting power to someone, who are going to leave a platform.
Powering down doesn't mean someone is leaving the platform. While it's possible (over 2 years!), it only necessarily means that they may be selling a portion of their holdings. I'm powering down because I am experimenting with it. I power up as soon as I record my numbers. I've bought Steem and powered it up. So I should be penalized the entire portion if I want to cash some out? Wouldn't that be like telling a stockholder that they no longer have voting rights on 100% of their stock because they're selling 1%?
What you just described in your other comment of cashing out 100% to get 20% in 3 weeks is what this would be trying to discourage.
Yeah, I understand. And it kinda makes sense. But I consider the imposition a far greater concern than the market factor. But I am very active in promoting other people's posts too, so maybe that's a factor in my perspective. The other, of course, is just what seems an overbearing and disproportionate penalty.
It's just an incentive to stay powered up. Curating/Rewards are supposed to be proportional to your vest in the site. If you are powering down, then you are removing those SP from vests. Perhaps this would encourage people to only power down some of their SP rather than all?
Not everyone has that option. And sometimes folks just power down to keep options open. I've been doing it for a few weeks now, simply to try to understand how it works better (Ask 5 people and get 7 opinions). I power back up immediately. And it's a good way to maintain being able to pull a portion out at any time, then just power up what's left. IMO, there should be no penalty simply because someone wants to get some of their Steem out.
Exactly, it doesn't need to be an all or nothing deal... Why not adjust voting weight relative to the power down?
Or just let it fall off as the SP falls off. I'm no programmer, but this seems the most basic and simple. IMO, it's the most intuitive too.
This is also a more than reasonable solution.
I would agree with you on the current 2 year contract... But with this new proposal.. nah...
i don't think its a good idea. locked up SP should be able to vote the rest not.
What was your objective for this proposal?
Your question has largely been addressed in the comments above, but the basic idea would be to add additional incentive to staying vested. If users are cashing out, then that portion of their funds is on it's way out, and would no longer receive the benefits/rewards to being vested.
This is exactly what we don't want. We want people who want in to get in, and people who want out to get out. Adding (unnecessary) friction to either ultimately reduces the value of the platform.
With a 2 year power down, I totally agree. With 90 days though I'm less sure. I see your point though.
@smooth wrote:
Well you'll remember I was one of if not the first at Bitcointalk who was arguing that the speculators couldn't invest and afair you sort of downplayed it or disagreed. So now it is nice for me to see you trumpeting my points here as your own.
You want speculators to be able to get in and out. Yes. But you don't know the other part of my design which deviates from what you just wrote.
So Steem will drop the power down to 3 months, a huge cash out will occur potentially crashing the price further or enabling those who want out to get bought out at good prices by eager fools, whilst the drop from 2 years to 3 months destroys another critically important design point which I am not going to share publicly. But you have a hint in my other comment on this page.
I'm not referencing speculators necessarily with my comments and I noted that elsewhere. If someone is a user or a long term investor and has had a change of heart (even after five years) and no longer supports the platform, I see no value in keeping them around longer just to prop up the market.
As someone else noted in the comments, many if not most speculators don't want to lock up their funds at all and three months is still too long. I don't really view the reduction in lock time as appealing to speculators, I view it as reducing the cost of entry for those who do intend to remain involved and invested indefinitely but aren't comfortable with a two year (one year average) exit lag.
@smooth wrote:
I agree. And you are getting closer to my (somewhat secretive) point of the drop from 2 years to 3 months being contemplated is IMO the worst possible compromise. We'll see...
Yes I see. I guess the more i think about this the more I agree with you sentiment.
Alright, here are my thoughts. They may get buried in the comments, but Ill post it anyways.
-Charlie
When trouble shooting a mechanical problem, especially an intermittent one, it sometimes requires one change at a time until the problem is isolated and repaired.
A witness vote is removable, that is true, but it doesn't mean that they are actually removed with changes in the witness work. Removing the votes after 3 months is good because with infinitely valid votes inactive users' votes are a risk (they don't re-evaluate).
I support these reforms. Until there is more demand for Steem, I think it's necessary to make this change on the supply side. Regarding the reduction of the power down period, it could create some short term selling, but if there is more interest from short term investors who can bring in additional liquidity, then it's the right trade-off to make.
Once things stabilize a bit, we really need to work on increasing the use and demand for Steem, making it very simple for third parties to adopt and use.
:Hold on. Only 30 people really have any. So, you're basically building a tool for 30 people to trade their shit between each other. There is an elephant in the room here with the oligarchs of steem vs the 99.9% that don't have any steem. Until the price drops low enough to grab enough investors to spread out the distribution then there won't be people using those other platforms.
Steemit should start looking for partnership too, that's how a business become legitimate to the eye of investors.
They could integrate login with trezor or ledger, they could use shapeshift API, they could integrate with stripe ,etc..
I totally second this.
Once things start stabilizing we should work on increasing the use and demand of steem.
Nice announcement, just wait for the dumps to come guys.
To be transparent, I also sent over 17k this morning and will be selling gradually.
I started a conversion of 300K SBD (to liquid STEEM) earlier today, hope that I can earn more. ;)
Good, someone needs to try to counteract our greedy leaders. They obviously don't understand how a market works but they're great at taking advantage!
I also recently converted 50K SBD to STEEM.
Yes. We see it in the screenshot.
I'm curious what the largest financial investors think about this proposal. Some have spent tens of thousands of dollars on Steem Power and watched that value drop to fractions of what they invested. How will they feel about these changes?
I spent 400 BTC on SP a few month ago, it's worth about 20 BTC right now, i am the largest financial investor so far, the follow is what i think:
I think the design of Steem Power is flawed, it should be removed completely, a lot of investors don't want to hold SP because of the long withdraw time, and few of them want to hold STEEM because of the hyperinflation , with the new change, the Steem Power holder only have 1.425% (9.5% * 15%) interest yearly, so most of the users would hold STEEM only, few of them would hold SP in order to earn curation rewards, i think this new change would attract a lot of short term and long term investors.
I don't like the idea of rewarding bloggers with stakeholder's money, there are two kinds of bloggers on steemit, write for money, or write for pleasure, the first kind produce low quality contents, it's not worth to pay them, the second kind, usually produce high quality contents, they do care about money, and appreciate and enjoy it, but they would still write without it anyway.if Amazon.com pays for the e-books with shareholder's money and make the ebooks free for everyone, then the price of their stock would drop as shitty as STEEM. We should use stakeholder's money for promotion purpose and for developers. We should develop features like pay per view, tip, trade etc on steemit.com.
We should focus on entertainment purpose on steemit, I don't like to read those original long posts on steemit, they are boring , if i want to learn, i prefer to read books. I think most of the active users here think the same as me, because they are leaving, the bots are voting, few people read and comment the boring posts.
I agree. If steemit only aims at being a kind of medium blogging platform it will lose a lot of potential users. Steemit should aim at being the best social network with many different ways to earn money. I wrote a post about this 2 months ago https://steemit.com/steem/@snowflake/steemit-needs-more-way-to-earn-reward-than-posting
By only rewarding people for writting stories steemit won't appeal to the vast majority of the people.
People should be paid for doing many different things that adds value, predicting the future correctly like augur does on ethereum, or people could be paid to fill survey, or even play games,or answers Q&A
Even a daily steemit lottery could be interesting, we could allocate 500$ to the lottery and make a happy user every day. And there people have one more reason to stick around..
I think the funny part of making money is lacking on steemit, it needs more diversification
@snowflake I believe it is a happening. There is steemsports (plus all the differents accts. under it) and I have recently been seeing different types of games such as guessing numbers, or what a zoomed in picture or @virtualgrowth plays poker with the steem generated by his post and rewards the upvoters and commentators . There are many great artists that draw and paint, there now some musicians posting original music and even some making unique videos here on STEEMIT. I recently posted how a steemit user's pic was used in a news article.
I my investment in steemit pales in comparison to @laonie 's but I was not worried with the recent price. I feel that Steemit has so much potential and not enough time has passed for us to be freaking out, but I understand. I have been averaging down so this price jump does help with my investment and my attitude.
These things are great but the interface is not very organized. All I see every day in the trending page is steemsport everywhere
The gaming/lottery aspect should be seperate from the usual posts.
If I was developing the interface for steem , I would create nice profils pages like any social media and on these pages i would add a section called earn which will show all the different ways to earn ( post,bet,fill questionnaire,etc..)
The way things are displayed to us now is too confusing and it's hard to know what steemit even try to be.
The trending page has definitely changed since I first started here, and it currently does not appear to be "steemsport everywhere." I do not believe Facebook new what it was going to be or how it would look either when it first started. Steemit is the first of its kind and it still says "BETA."
Just wait until it announces itself as Live to the World.
Thank you, @laonie. You were certainly someone I had in mind when I made my comment. I don't agree with everything you've said here (I really like the concept of vested shares which represent a long-term commitment, along with the idea of purchasing influence on the social network side of the ecosystem), but I really, really appreciate your perspective. I really hope, in the long term, your investments turn around, and you are made whole here. In a very real sense, you have been funding Steemit for the past few months and Dan and Ned (IMO) owe you a rather large debt of gratitude.
I'm curious why the change would attract long term investors as you described? To me, Steem Power was a long-term investor's dream. Unfortunately, the liquid steem dumped on the market caused that dream to turn into a nightmare as the price of steem fell through the floor.
That's a really interesting way to put it. If we don't reward them with that money, who's money do we reward them with? Value can't be created from nothing. I don't know what the balance is, but if we're going to continue to have valuable payouts, the money has to come from somewhere (i.e. investors propping up the value of the rewarded token). As you said, though, if other systems did this, their share price would tank.
I agree entertainment should be the key, but I also think different people come here for different things. Some value the long posts more than any other posts anywhere else. I hope there's room for everyone's preferences.
Thanks again for your reply. It means a lot to me.
For long-term investors, if the price increased tenfold in a short time, most of them would want to sell most of the stakes, they don't want to be forced to hold. The long withdraw time is a big turn off for them.
We should treat every investor equally, it's hard to tell who is short-term holder, who is long-term holder.
If you are a reader, you like a post, you can reward the author with your own money, if you reward the author with other's money , that's called corruption or tragedy of common.
Paying users for content is a market differentiation for Steemit and is it's biggest selling feature to gain adoption. The revenue will come from the attention economy and advertising.
Bringing in ad revenues is the real solution that will add value for investors.
This is what I have been saying for a while now too. The content brings viewers, so it should be paid for by those who want exposure. The pool of rewards needs to be neutralised by income somehow, or it destroys the investment potential.
Ads are dying online.
Way better to allow for topical writing prizes, of which steem keeps some fraction. See: Rancher's article bounty system.
@laonie wrote:
Tipping will never be viable.
I understand that perspective of rewarding them with other people's money, but bitcoin rewards miners with investors' money as new bitcoin is created. I see steemit doing the same thing by rewarding those who create the content which give the social media ecosystem value. Other cryptocoins are investments only whereas this one includes author rewards. As long as the price is going up, it works well for everyone. Whenever the price just goes down and investors can't get out, it does seem fraudulent.
@lukestokes
The beauty of PoW is that there's no centralization of power, bitcoin treat every miner and every stakeholder equally , and bitcoin has the first move advantage, but STEEM doesn't , if steemit cann't grow it's user base, it would be dead.
If people don't get paid to post, what exactly is the selling point of steemit.com?
If people are leaving even they get paid to post, what exactly is the point to pay for ?
That's waste of money.
If you want to win a user's heart, money just won't work.
@snowflake Thanks for asking. An update will be released after Steemfest.
How is steemQ doing? Any progress report for the community? :)
@laonie wrote:
You are correct that users won't stay just for money and the site must be enjoyable/meaningful even without remuneration, because it is mathematically impossible to pay users enough for blogging from debasement of investors.
However if users stayed because they are investors, then they could have both their heart and mind vested in it. That was one of my key insights when I realized how to make a better Steem "clone".
Voting is the problem (because as one of my blogs pointed out, it is impossible to avoid Sybil attacks without handing that voting power to the whales which thus centralizes the ranking and reward system).
Btw, remember I responded to one of your blogs in August and warned you that you were throwing your BTC down a rat hole. Maybe next time you listen more carefully to what I have to say.
@laonie wrote:
You are correct that users won't stay just for money and the site must be enjoyable/meaningful even without remuneration, because it is mathematically impossible to pay users enough for blogging from debasement of investors.
However if users stayed because they are investors, then they could have both their heart and mind vested in it. That was one of my key insights when I realized how to make a better Steem "clone".
Voting is the problem (because as one of my blogs pointed out, it is impossible to avoid Sybil attacks without handing that voting power to the whales which thus centralizes the ranking and reward system).
Btw, remember I responded to one of your blogs in August and warned you that you were throwing your BTC down a rat hole. Maybe next time you listen more carefully to what I have to say.
Yes, you did warn me, thanks for the warning, i wasn't thinking clearly at that time, and i learned the lesson.
I invested 40btc... so I totally agree with your position!
@knozaki2015, want to make you aware of banano's insight.
I am developing a social network blockchain project somewhat similar to Steem, but different in very important ways which address all of your points and even points you have not yet thought of. It is also intended to fix all the centralization problems of Bitcoin, so it is to be a major announcement in the Bitcoin ecosystem when I get close to launch. Also the name I have is superior (the domain is already registered), on the caliber of "Twitter".
The DPOS which Steem is based on is less than ideal. I wrote down the issues at least one of which afaik no one else had enumerated. I have also been creating a new programming language to replace JavaScript and Java, and this ties into my plans for the social network. I must keep some of the details secret until I get closer to launch, otherwise other projects would possibly attempt to copy them.
I will be in Singapore in second and third week of January (for a medical trip to deal with my liver & digestive health problem) if anyone wants to meet to talk with me face-to-face. It would probably be best if there was some angel investment now to help hire another top programmer to accelerate my progress. I am a top programmer and only want to work with the very best due to the Mythical Man Month loses of productivity due ridiculous amounts of communication load (or miscommunication outcomes) incurred when working with junior programmers.
I can be contacted at my LinkedIn, which is linked in my first blog post.
I don't think it is in my best interests to apply my design and ideas to changing Steem, because I am not one of the whales who mined the stealth mining. The prior concentration of ownership disincentivizes me from being a full partner in the ecosystem. I had thought about contacting @ned, but then changed my mind when I became aware of how most of the tokens had been minded for Steemit, Inc.
I have appreciated that they did this experiment and demonstrated the potential value of a Steem-like concept and I participated sincerely to see what would come of it (which is a concept I was working on before they launched and before I had heard of Steem). I presume they have profited commensurately. And they can make changes now and see how much they can salvage from the existing design and inertia. I am not claiming they can't make some design improvements. I will be watching intently to see what they do.
@laonie, want to make you aware of banano's insight.
What's the URL of your blog?
https://steemit.com/steem/@anonymint/blog-rewards-can-t-be-widely-distributed
Bloggers aren't being rewarded with stakeholders money. Stakeholders have something worth >$0 because some of us are trying like hell to bring people to the platform and build out infrastructure and ecosystem, and the financial incentives ARE A HUGE PART OF THAT DECISION.
@lanie " I don't like to read those original long posts on steemit, they are boring , if i want to learn, i prefer to read books. " Why didn't you buy Amazon stock then? You knew you were buying a hard to explain - cryptocurrency hedged - "pay for blog" platform and now you don't like it because you think the users are stealing your money.
If you had taken that money and put it into Amazon - you would have received a quarterly prospectus, you could vote for the board of directors AND you would still have most of your money.
But you probably wouldnt understand them either - you see they take shareholder money and buy up ebooks so they can offer them for free. The part you would understand is they also don't turn a profit because of all their "investments" in "entertainment".
Some sites add value with content - some with savings or a reward. Steemit provides both.
I don't think the users are stealing my money, but i do think this platform is like a charity organization , i still remember that we paid a make-up post for $40k , that's insane. That's how a tragedy of common works.
The platform still works that way, everybody is milking the cow, the cow is nearly dead.
Steem needs to implement posting reward max limits
So because your investment is not worth what it was the business model makes no sense? What makes no sense to me is why you didnt do a private deal and make sure you had a say before parting with so much money.. In your analogy you want to kill the dying cow - the currency depends on the platform which depends on the people which depends on the.. Am I the only person who read the white paper?
I want to save the cow, stop milking it or at least be tender, i believe money cann't buy the loyalty of users, maybe i am wrong, time can tell.
@laonie
Understand that point number three is an entirely subjective opinion and irrelevant.
As to the idea that you should begin to capitalize off my work, without offering to pay me, fuck you. My stuff is stuck here, for better or for worse, from now on. Without the writers, what is this site? You're witnessing it. That's why you must pay. Otherwise, you end up with the same crap other blogging social sites have.
I am sorry my personal opinion might hurted your feelings, but you are acting like a mad dog.
I tend to get like that when someone thinks their simple cash investment is worth more than my art. I'm not acting like a mad dog, I'm acting like someone defending their work. It's an "opinion" not an "option" for the record. but, you go ahead and invest in a platform where only people like you write the content and see what the fuck happens. You think Facebook is huge because of written posts? No, it's huge because it became an avenue for sharing huge amounts of quality content. You don't understand anything about social media, obviously, but because you put in a little cash (not even that much, by the way) you're voice is bigger than mine. Now, you want to steal what I worked hard to share here. So, yeah, fuck you.
It's "your voice" not "you're voice" for the record, i understand why you act like that, you have 8 kids and 3 dogs and a fat wife to raise ( BTW, your kids are cute, but i hope your 3 dogs are not as mad as you ), but the sales of your gabage e-books on amazon is pathetic , if you want to defend your work, barking like a mad dog is useless.
Maybe it's time Steemit embrace XXX content and let people purchase Steem Power for greater access. That could create demand for Steem Power without these parameter tweaks to appeal to crypto gamblers.
I really like you comment @laonie and although I don't agree with everything said, finally someone who understand how this all thing can really work long-term from investment PoV. There are some things:
@laonie, stakeholders pocket money which time they vote.
I have powered back up tens of thousands of dollars. Most of that was at much higher prices (some probably at least 10x the current price, if not higher, though most at 2-5x).
I have no strong expectation of this proposal being a magic bullet that will suddenly recover all those losses. I do think it is an improvement overall and gives Steem a better chance to succeed assuming other good work continues to be done at a reasonable pace, such as making the platform more compelling and less narrowly targeted as well as better marketing and promotion (actually just having some at all would be good).
My biggest concern is that the focus in this proposal on tweaking coin parameters is seen as a "fix" and takes the pressure off of absolutely essential platform development. The large cuts to witness rewards will withdraw funding (ideally not abruptly) from valuable independent developers and development efforts, making this an even more centralized ecosystem dependent on Steemit for funding and development. More than ever, Steemit needs to step up on creating something with broad appeal and utility. If not then the changes in this proposal will not matter. At best they will buy some time.
Agree. However, I DO like the attempt to make Steem a viable cryptocurrency. IMO, that will be good for the platform overall and remove some of the ponzi stigma (however unjustified).
Always a voice of reason. Thanks @smooth. When I saw this post, I quickly scrolled down to see if you had replied. I agree with everything you've said here (including a more gradual approach to changing the percentages).
This is a complicated economic experiment. I agree, these changes aren't a "fix" because ultimately we can't really create value out of nothing. Bitcoin supports a million dollars+ in new value a day because investors want to buy in. The same can't be said for STEEM... yet. That's the main concern I have with too much tweaking too early on. If we try to "fix" things with adjusting this nob or pulling that lever, are we really any different than the central bankers playing with interest rates? Sometimes things need to work themselves out over time with some winners and some losers, even if that means I'm one of the losers (short term). Some things just take time.
I bought in at 10x some of the lower prices today. Some bought at much, much, higher. The discouraging thing is to think anyone could just show up today, spend much less, and have much more SP. That said, what really has given me value here is the platform and community itself. I'm even working on my first fiction post. Seriously. :) The value of this platform is the relationships and the creativity it brings. Like bitcoin, maybe it just needs a few years for enough people to realize that as well for the value of the token to catch up with it. I'm interested in long term investing here. The high interest rates (I mean in terms of the changing VEST to Steem conversion) are one of the reasons I bought it when I did, knowing they would settle down later on. At the same time, if the fundamental economics are actually flawed, then surely we have to do something. Then again, 10,000 bitcoin for a pizza sounds pretty flawed as well. It's all a matter of perspective and timescale.
I'm looking forward to whatever marketing takes place in the future. I think the social media platforms of the world will eventually have to adapt to the new paradigm Steemit is bringing to the category. Whatever the future of social media looks like, I'm quite proud of being an early adopter here on the blockchain, even if that means I lost out in the beginning. Thankfully, I never invested more than I was willing to lose.
If the price keeps going down, how do you reinvest at higher levels? That is an amazing thing.
well said!
agreed with both stella and smooth that these parameter changes do little to help increase the broader appeal of the platform. If we get some of the things built that I am trying to get done, I suspect you will see this change ^.^
I invested 40 BTC and I would be happy if these changes lead to a higher STEEM price....
Heck yeah to that. I think we'd all like to see higher prices. 40 BTC is quite a bit. In a sense, you were an early angel investor, paying Dan and Ned to do what they did. Unfortunately, it seems the value of your shares have declined significantly (as they have for us all). For what it's worth, thank you for taking a risk, seeing what many of us see, and putting in some real money. I hope, on a long enough timescale, it turns into one of the best investments you've ever made.
I love how we've already arrived at a point in time where we refer to bitcoin as the real money :)
Hell yeah. More real than the currencies many citizens of many countries are trying to get out of right now. :)
lol, YAY!!
You will regain your investment one day. Change is on the way!
As.an.investor.who.bought.50BTC.at.2dollar(ouch)
I.approve.these.changes
I.also.hope.steemit.will.hire.some.designers.to.get.us.a.badass.interface
Its.very.important.that.users.can.personnalized.their.steemit.webspace.so.that.they.feel.at.home(avatar,backgroundwall,etc..)
What's with your spaces ?
it is an old telegram from the past
LOL
Thank you for that laugh!
I like the idea of taking the interest earned on Steem Power and using it for rewards, because we would actually be investing that STEEM back into great content that continues to better the site, but I think it would be better to make the "Power Down" cycle more like 6 months.. The point is to NOT be able to just pull out :/
People are able to pull out now with a 2 year period. Reducing the lock time period would actually result to less people pulling out, this is just how human psychology works. Throw someone in a cage and ask him how eager he is to get out, now throw someone in a cage with the keys and ask the same question, you will be surprised what their answer is.
No way. Why would anyone want Steem Power if you don't value it? And if we change the smart contract before it even finishes then how does this create confidence in any of the other economic parameters of Steem?
I mean imagine Bitcoin developers debating increasing the cap, or adjusting the inflation rate, or any of the economic promises that people bought into? With Steem we bought into a certain set of rules, and now before the 2 year period is up the developers want to change the rules. Maybe we should set it to change after the period is up?
I think this is a good idea overall.
I would like to see the reduction in reward rate for both witnesses and content to be phased in over time so that there is less of an abrupt (and IMO necessarily so) slashing of rewards. The main value add here is dropping the hyperinflationary model and extremely long lock time that has been unpopular with many investors (and, importantly, not just short term speculators, but also those who may want to invest longer term but without a horrendously-long exit time if and when they do choose to exit). Under the current structure, rewards are gradually being reduced as a consequence of inflation, and I don't see a need to replace that process with an abrupt cut.
The current instantaneous inflation rate for rewards is approximately 16.5%, of which 2/3 or about 11% to the reward fund and 1/3 or about 5.5% for witnesses. This proposal calls for 8% (85% of 9.5%). Both content and witness reward would have a large instantaneous cut. In the case of content rewards, from the current 11% to 7% and for witness rewards from the current 5.5% to 0.95%. This is obviously a massive 80% reduction in witness rewards and will decimate funding for work being done by witnesses and funded by witnesses supporting other projects.
My proposal would be for content rewards to fall by 2/3% per month and witness rewards to fall by 3/4% per month, both for (approximately) six months before reaching the above numbers. This allows for a more gradual and orderly adjustment to the eventual numbers (which are close to what was already going to happen, but somewhat accelerated).
It is also possible to consider a model where only new investments have the shorter lock time, but existing SP/VESTS still have to power down at the existing 2-year schedule (possibly to repower up under the new schedule). That has advantages and disadvantages; I have no strong opinion on it either way. I'm just putting it out there is case others want to comment on it.
I also think, that there should be two "lock periods", old one.. and new one. If suddenly everyone would have a possibility of selling 24-3=21 months earlier, then we can encounter even bigger dump.
In the other hand... with two "lock periods" system will become even more complicated for new investors... and... there will be no reason to no power down all funds, even to just power up one more time, but for shorter period.
So... maybe "2 years period" should be still there.. but there should be higher return from longer lock?
Agree with this. A concern with two "tiers" for SP is that current 2 year locks have entered the arrangement with the understanding that their interest rate is crazy high. To change the game is a pretty tough pill to swallow (and will be greatly affected by market conditions, for good or ill).
As for the shorter time period, there will naturally be a dump. You can count on it. But that's what markets do, and this overall plan would free up the market more, distributing Steem to more hands and, IMO, adding greater long-term stability.
I'm unsure about the gradual part. Other than the large impact on witness projects, I mostly feel that "ripping the band-aid off" might be the best approach.
For the existing SP holders, one possibility would be to support two different power up periods permanently. There could be more incentives for 2 year holding, like a higher interest rate and possibly increased voting weight/curation rewards. You could also offer a one time window to convert from long to short.
I think it is harmful on the blogging side too. While the cut isn't quite as severe, it is still almost 40%. That is enough to accelerate the pace at which people see the site as not worth the effort and quit. A more gradual transition (on both) makes a lot more sense to me.
Again the main thing from my perspective that is clearly positive and almost without any disadvantages is replacing the hyperinflationary model, and I rather see that done as a clean change that does one thing that everyone can get behind rather than introduce large immediate reward cuts that could be good, could be bad, but are less obviously an overall improvement.
I do think the witness projects (and witnesses who are personally involved full time and relying on witness pay) are a big deal. This platform needs continued supporting services (such as anti-abuse work), investment, and development. Cutting that off abruptly without a transition period to develop new models and funding sources will certainly hurt on the platform side, but it is only speculation whether a more immediate cut in rewards would actually help on the investor side. As an investor, I've been skeptical that the rewards (all of them, but especially the high blogging rewards) are bringing the value to the platform that the are supposed to, but I'd also be concerned about disruption of platform investment and potential loss of users really hurting the platform longer term.
oh i like it! very much. Allow to powerUp for 6 month or for 2 years. With 2 times the benefit for the 2 years.
Yeah, something like that :)
Yes this allows the reduction of risk Dan pointed out would discount the price and others to still invest long term.
I very much like this idea
Choice and having options is always wonderful. I would say 3 months or 2 years. 6 months starts getting into long-term territory (ask all my previous relationships)
Likely the drop will not be so big, if we keep the bottom of 1 STEEM per block. Need more details though.
//Edit: format correction.
I agree that changing over time might make sense and abrupt changes might have to be avoided.
Smooth, i think the most important aspect is to think about what is the best distribution of this table:
Do you think the above is a good distribution? It looks kind of good to me. But i think the most important thing is to figure out how this table should look like. Then we can think about transition. The main thing is to keep the main thing the main thing.
Yes I think overall it is likely quite good. Adjustments may be necessary in the future though. So we will see.
Thinking about custom allocation - then everyone could be happy possibly and more people could be willing to participate https://steemit.com/steem/@jimmco/proposed-changes-and-custom-allocation, WTYT?
With the reduced inflation the price will rise so witness rewards won't be that low compared to now.
If witnesses needs funding they should just make an intro post of their project or why they need funding like everyone else, they will definetely receive some $ since they are popular in the community
I'm going to call bullshit on that. No one can predict the price and if you claim you can you are undermining your credibility. Cryptos are volatile and go through long cold winters. While today the market seems happy with this announcement, in a week or a month or six months it will be old news and the price will be based on what is going on then, which we don't know now. I'm not enthusiastic about a plan that relies on "Because we do ______, the price will go up and then the problems will be solved". I've been around a bit too much to fall for that.
Yeah, we see 50% moves on a shoddily researched op ed.
I would expect Steem to rise from this too. But, IMO, witnesses need to be take care of reasonably. The voting mechanism with the 3 month rolloff helps promote those who are doing the most for the overall project too. It's a new concept to me, but so far I've been impressed.
Supply isn't the only factor determining price, or even inflation.
This will create an environement where users are not equally treated in the system, bad precedent imo.
It will also mean that current users can't take advantage of the new feature ( reduced lock time period)
Also I am not sure why you would want to still lock people for so long, what would be the point of that? A reduced inflation means that we no longer need to prevent people from selling their share because there will be many willing to buy on the other side.
I didn't say I wanted to do this. It has advantages and disadvantages.
As one of the crankiest and most outspoken critics of the steem economy (I have 10 posts about it of my 300+) I support these changes. I support smooth's talk of making some of these changes gradual (those effecting the witnesses).
Priority Uno- We have to kill the inflation to save the price of steem.
Priority Dos- We need more people to be active bloggers and investors to make the system worth more.
After you stop sucking out all the rewards with inflation the next priority is getting the price higher so the rewards are appealing, so people come here to blog and get paid, and then people have steem and SB to buy shit with and support your currency plan. That way steemit can take over the world from the fed and make this planet a better place.
Because price is so important I think you should consider doing the a 10:1 reverse split now as well. This place will function better with rewards based off of $1.7 steem as opposed to $0.17 steem. Basically any time you guys get to $0.50/steem or less you should be doing reverse splits to get it back to $1 to make it appealing to blog here. If it starts getting crazy high then you might consider doing a normal split to keep some parity with the USD.
You also have to deal with the elephant in the room. The rich mofos on the system need to cash some of that out on the cheap. The market cap of this place doesn't call for $185M evaluation so you're not going to get steem/SP anywhere near that.
I am aware dumping steeem by whales and increasing the price seem at odds. That said if you encourage the whales to sell even after a 10:1 reversal you can accomplish both.
I've said from the beginning of my attacks on the economy that people are the value. The changes necessary above and beyond what's included in this post really require a better economic distribution of the SP and Steem, and to have high rewards as an incentive to blog, curate, and invest here.
By all means get the Power Down shorter. Dump and dump some more. Get the price cheap as fuck for a while so people can buy in, and when you have a healthier distribution you'll get a lot healthier of an ecosystem and a better self regulating economy.
Conclusion: Nice post. Support it with a delayed change for witnesses. Get the price of steem down by having whales dump it. Get the price of steem up by doing a reverse split to get us back to $1 as a launch point. Best of luck. It's certainly better than watching this place die a shitty death due to inflation, lack of rewards, and all your daily users that aren't in the top 30 bailing.
Maybe I won' t be so cranky a few months from now.
I agree totally with this, there is already too much supply. A low supply is important to create feeling of scarcity.
Doing a one off reverse split is a good idea, it will allow the price per steem to increase a lot in the future which is what this platform needs.
lol, best post. :)