From seed to harvest, what we put into the Steemit community comes around to feed us.

The Cycle Of Trust

I often state that everything is a circle. Life. History. Investing. Even cryptocurrency. The cycle moves, going from bottom to top, peak to trough.

I believe that the underlying key to these cycles is trust and cooperation. Think about it.

If life if you have trust and cooperation then times are probably good or at least getting better. If your life situation lacks trust and cooperation, things are going down.

In history, we have times of world cooperation where we all prosper, and then conflict (lack of trust and cooperation) occurs and suffering increases.

The same thing happens with investments.

When we all are working together towards a similar goal, we all get richer. This prosperity attracts uncooperative and untrustworthy people who use this success to enrich themselves at the cost of others. These bad actors come in and misbehave. Eventually trust is broken and the cycle turns downward. People point fingers at each other, sell their investments which causes the price to fall, and we all lose.

After some time those bad actors are removed or they move on to scam something else and the remaining participants cooperate with each other. Trust builds, and they all start to create riches.

The cycle starts again, but only if the entity survived the cycle.

Cryptocurrency Cycle Of Trust

Now picture this as it pertains to cryptocurrency.

For a long time only the true believers were invested in crypto. ICO’s were created to fill needs not yet met, or at least not met well enough. People bought into each new investment based off of cooperation and trust behind what they were buying.

Everyone got richer.

Unfortunately, this causes the bad actors to smell an easy target and so they come in to grab what they can while the going is good.

You only need to think about the disappearing ICO teams (vanishing with millions of YOUR dollars), Ponzi schemes like Bitconnect, and other scams such as what Tether most likely is.

All of these things are bad actors eroding the trust and cooperation of the market.

So where are we on the cryptocurrency cycle of trust?

I believe that there are now too many uncooperative people out there for cryptocurrency to continue to reach new highs.

Steemit’s Cycle Of Trust

From seed to harvest, what we put into the Steemit community comes around to feed us.

While I was at Steemfest one particular narrative came up in multiple discussions I had with wholly unrelated people. You might have heard of it before – The Tragedy Of The Commons.

The Tragedy of the Commons was first described by economist W.F. Lloyd in 1833. He wrote about cattle grazing on the grass of the town common. This is land not owned by anyone, so is 'common' to all and all can graze their animals upon it. The tragedy of the commons is an economic problem in which every individual tries to reap the greatest benefit from a given resource.

The theory says as time goes on, one farmer decides that he can have fatter cattle (and therefore they will sell for more money) if he lets his graze for longer than is commonly used. As time goes on, more and more farmers see that the first farmer is getting richer than they are and so decide to let their cattle graze longer too. Because there are more cattle grazing for longer periods of time, the land becomes less able to support any grazing at all since the grass doesn't get any time to grow back. Eventually, the common becomes a barren plot of land that nothing can graze on. What was once a resource that supported all farmers at a reasonable level has become depleted and unusable.

The theory states that individuals pursuing their own self-interests will deplete a shared resource if they benefit quickly and directly and the negative effects are shared by a group. To put it another way, it provides an opportunity to benefit themselves while spreading out the negative effects across a larger population.

How does this relate to Steemit?

The reward pool motivates each individual to take as much as they can for themselves. Meanwhile, everyone else has less of the reward pool to go around.

Also, the reward pool doesn't get smaller the next day because someone took 'too much,' but something negatives DOES happen. If people feel they aren't being adequately rewarded for what they do, they will have no reason to stay (or to join).

Without the demand for STEEM that is created by the feeling that one can have a just reward on Steemit for what they are doing, the price of STEEM will fall.

Now how does a person decide what is a just reward? Well, they simply look to see what others are receiving for their work here. This is fine as long as the majority of people feel that the reward provided matches the usefulness or quality of the post.

Nobody feels angry if a high-quality post is rewarded at a level that matches. This ability to provide a quality post and receive a quality reward is what makes Steemit users strive to create great content. Great content will drive new people to the site and some will join up and become the newest members of a thriving and growing community.

But if they decide that other people are not providing a post of sufficient quality for the reward given, they will become disenchanted by the system.

Disenchantment leads to less retention, less interactions, and less new users. All that leads to a lower price of STEEM which hurts EVERYONE.

Taking additional rewards in the short-term isn't optimal for anyone in the long-term.

What To Do?

Right now this vast majority of this power to see Steemit grow or decline rests with those who have the most power, the whales.

“With great power comes great responsibility.”

But all of us bear some responsibility.

We can do what we wish with our power, one way leads to the long-term success of Steemit and great riches from the increasing price of STEEM.

The other leads to some mediocre amount of short-term riches and the eventual insignificance of Steemit. I mean myspace.com is still around, but who cares?

But I know that humanity can come together to do great things. We can all come together and agree to not chase short-term personal gain, but instead focus on the long-term benefits that a thriving Steemit platform will offer to ALL of us. That means to only upvote content of quality and to a level that is within reason. To seek out those users that are creating the best content and upvote them regardless of how much curation reward you think you will get.

Or we can all just succumb and “do what everyone is doing” and only upvote posts that always earn well regardless of the content, our friends shitposts, or own one sentence comments 20X per day.

The choice, as always, remains our own. We will all reap what the community decides to sow.

P.S. I do have some ideas which, if pursued, can reduce this bad actor activity if anyone wants to hear them.