Steemit how can this thing be workable long term?

[iamnotback]

I believe the creators of Steemit really think it can work. Dan is delusional that way. He always has been, so it is not out-of-character (and I don't mean that to make him my enemy, as they are talented programmers apparently but I am just speaking frankly about his "build it and they will come" which is the same flaw in DEX in that users will always prefer the more liquid Poloniex). The main flaw in Steem's business model is that CC is not adopted for transactions unless it provides a unique feature that can't be done with fiat since otherwise fiat is preferred because it is our unit-of-account. For Bitcoin that was permission-free money transfers. Steem has currently no unique transaction use case for its token. Merchants will simply accept Steem via Bitpay (or clone) but that won't be the only way to pay the merchant, so no net demand created for the Steem token. That is the bleak problem I see, but I am trying to think of a solution.

Potential solutions are now coming to mind. Need to sleep first though. I am a bit too sleepless right now to think through my epiphany.

I am posting this because I don't want either side of this debate to think I am being insincere. I think they created a platform without really having a solution to the main problem of how to create transactional demand for Steem tokens (the problem that nobody has really solved, not even Bitcoin although Bitcoin has more transactional demand than all other CCs). But there might be a solution.

Remember they need transactional demand for Steem tokens so that Steem Power investors don't end up paying for debasement to pay the Steemit bloggers. The entire scheme was to create a userbase to create demand for Steem tokens, but you need a reason for them to use Steem tokens and not just when they are converting their SP to Steem (as this isn't incoming demand for Steem).

[AlexGR]

Potential issues that I came across today

1) Someone pointed out the fact that steemit has no fees. My question was, ok, then how does it prevent spam?

https://steemit.com/steemit/@steemship/the-missing-link-has-steemit-revolutionized-micropayments-or-made-them-obsolete#@alexgr/re-steemship-the-missing-link-has-steemit-revolutionized-micropayments-or-made-them-obsolete-20160719t214207846z

"1.) Problem: Fees. Solution: Steem has no transaction fee."

Question: Isn't that an attack vector where someone can just bloat the blockchain - in the order of terabytes? How is that avoided here?

2) 10% interest on Steem Dollars

https://steemit.com/steem/@craig-grant/steem-dollars-is-designed-to-be-a-comfort-zone-for-those-who-need-usd-10-interest-is-toilet-paper-money#@alexgr/re-craig-grant-steem-dollars-is-designed-to-be-a-comfort-zone-for-those-who-need-usd-10-interest-is-toilet-paper-money-20160719t184633720z

I wasn't aware of the 10% interest on steem dollars, but it would definitely have consequences in terms of real-life economics if it builds up in terms of people having them parked to get interest.

If steem dollar = dollar, then that would make the steem platform something that would attract a lot of external investment to acquire steem dollars appreciating at 10% per year.

So say a fund comes along and buys 10mn steem dollars in order to make them 11mn steem dollars. That's -1mn dollars for the ecosystem in the end of the year. Is this sustainable? I mean banks get your deposits, give you 2% interest and then loan you with 5% - so they have a business model where they have income. Here there's no income except inflation. So perhaps that would create a lot of pressure in steem price as a lot of steem would be needed to support all the steem dollars interest.

I think 10% interest on SD is net-negative for the system unless I'm overlooking something (it's possible that I do).

[iamnotback]

Potential issues that I came across today

1) Someone pointed out the fact that steemit has no fees. My question was, ok, then how does it prevent spam?

https://steemit.com/steemit/@steemship/the-missing-link-has-steemit-revolutionized-micropayments-or-made-them-obsolete#@alexgr/re-steemship-the-missing-link-has-steemit-revolutionized-micropayments-or-made-them-obsolete-20160719t214207846z

"1.) Problem: Fees. Solution: Steem has no transaction fee."

Question: Isn't that an attack vector where someone can just bloat the blockchain - in the order of terabytes? How is that avoided here?

I covered that upthread. They rate limit the transactions, which has some negative implications for certain potential applications. And there is a transaction fee, which is the cost of holding Steem while it is debased 9X more than SP (since SP can't be transacted).

2) 10% interest on Steem Dollars

https://steemit.com/steem/@craig-grant/steem-dollars-is-designed-to-be-a-comfort-zone-for-those-who-need-usd-10-interest-is-toilet-paper-money#@alexgr/re-craig-grant-steem-dollars-is-designed-to-be-a-comfort-zone-for-those-who-need-usd-10-interest-is-toilet-paper-money-20160719t184633720z

I wasn't aware of the 10% interest on steem dollars, but it would definitely have consequences in terms of real-life economics if it builds up in terms of people having them parked to get interest.

If steem dollar = dollar, then that would make the steem platform something that would attract a lot of external investment to acquire steem dollars appreciating at 10% per year.

So say a fund comes along and buys 10mn steem dollars in order to make them 11mn steem dollars. That's -1mn dollars for the ecosystem in the end of the year. Is this sustainable? I mean banks get your deposits, give you 2% interest and then loan you with 5% - so they have a business model where they have income. Here there's no income except inflation. So perhaps that would create a lot of pressure in steem price as a lot of steem would be needed to support all the steem dollars interest.

I think 10% interest on SD is net-negative for the system unless I'm overlooking something (it's possible that I do).

I think SD are a net negative (or at least unnecessary and pegged assets are problematic), and should be eliminated. My rationale will become clear after my next blockbuster blog post!

[iamnotback]

There sure are a lot of big names participating in this...investment scenario. Anything for a buck. Right fellas?

Wow respect, i see some people who usually stand on morale high ground here defending and shilling for such a scam mining.... wtf is going on here.

I'm as perplexed, trust no one.

soon this pyramid will collapse and everyone will look silly.

Ah maybe tomorrow I am going to change your minds about that. I am becoming more confident this going up another 10X in price at least. But I want to see the reaction to my next blog post to gauge if I am correct.

If my next blog post can change the minds of the skeptics, then that will be a big accomplishment.

[iamnotback]

That they've disabled most of the reporting functionality of this site:

https://steemle.com/charts.php

They haven't disabled anything. Those statistics are from the blockchain. Detailed site statistics are not available unless they happen to post them.

They've apparently disabled php scripts that used to work such as author.php, etc..

[iamnotback]

There sure are a lot of big names participating in this...investment scenario. Anything for a buck. Right fellas?

That's because the money flows to the top. There are a handful of Steem-whales holding large amounts of SD and SP who are reaping the benefits of all the newbies tricked into thinking that they, too, can turn a profit. Ultimately they are just going to make money until people wisen up and stop buying into this massive bubble. At that point, they will either sell out, or, disillusioned with past profits, hold on to the rails as the boat sinks, along with all the fish who are wasting time and money on this platform.

No it is about moving a 100 million people in CC over the next year. Bitcoin won't come close to doing that!

I could be wrong, or you guys may really need to quickly readjust your open-mindedness.

[bones261]

@iamnotback

I hope you're new passion for Steem doesn't overly distract you from your goal to make you're own alt. I was looking forward to being on the ground floor when you come up with your own project.

[iamnotback]

@iamnotback

I hope you're new passion for Steem doesn't overly distract you from your goal to make you're own alt. I was looking forward to being on the ground floor when you come up with your own project.

Actually the solution I have in mind for fixing the funding model of Steemit, also dovetails nicely with giving momentum to my project if it is launched. The proposed solution I am thinking of for Steemit, doesn't require they use my blockchain design. It is a rather simple change for them to make! But it also opens a huge market for my project as well. So it is a win-win.

My goal is to not waste this signing up of the masses into Steemit. Let's not waste that resource. We are spending money for it from our ecosystem.

Perhaps some of you will still complain that Dan, Ned, et al got too many tokens from the stealthmine and it isn't fair to go expend our community resources to turn them into $billionaires. Prepare your arguments for a hard fork of Steemit, but the problem is we'd have a hard time moving all the vested interests over to the forked one. Plus Steemit isn't open source so we'd have to recode that (although I could code that fairly quickly not including the block chain integration). You all should think about this, because I haven't thought too deeply about it yet. They are awarding many of the tokens they mined to the new signups. I need to do some calculations on that.

smooth have you done those calcs?

[iamnotback]

I agree with you that isn't use case demand though. The use case demand they are hoping to create market place (which they hope will provide a use case demand for STEEM). The use case demand is critical to the funding model for paying for content, so we need to analyze that carefully and see if there are any improvements to suggest. They really need some way to motivate users to use the tokens now, not just for cashing out. That is a critical need they need to address asap.

I agree. They need to find ways to generate profit for it to be sustainable. As pointed out in the white paper, SP inflates at about the same rate as Bitcoin did in its first 8 years of existence, so there is time to figure out how to monetize the user base while remaining relevant.

Some ideas: paid advertising, marketplaces, data storage (I know you disagree there, but I think it could be made to work), gambling, charging transaction fees for anonymous STEEM transactions, gaming, voice/video/text chat, VPNs, etc.  

The solution I will propose is not any specific idea for a service to attract transactions, but rather a paradigm shift about how to get merchants in general to use Steem instead of other currencies.

Instead of the slow boat of trying to create those market places and services which won't be exclusive, why not just go direct to the point and create exclusivity!

[AlexGR]

Potential issues that I came across today

1) Someone pointed out the fact that steemit has no fees. My question was, ok, then how does it prevent spam?

https://steemit.com/steemit/@steemship/the-missing-link-has-steemit-revolutionized-micropayments-or-made-them-obsolete#@alexgr/re-steemship-the-missing-link-has-steemit-revolutionized-micropayments-or-made-them-obsolete-20160719t214207846z

"1.) Problem: Fees. Solution: Steem has no transaction fee."

Question: Isn't that an attack vector where someone can just bloat the blockchain - in the order of terabytes? How is that avoided here?

I covered that upthread. They rate limit the transactions, which has some negative implications for certain potential applications. And there is a transaction fee, which is the cost of holding Steem while it is debased 9X more than SP (since SP can't be transacted).

A rate limit can only be effective along with size limitations. Otherwise if you have, say, a rate limit of 1 post per second per account, but no size limitations, then

-with one account
-you can make 86400 txs per day
-let's assume 20kb size

=1.7gb spam. If the txs are ike 100kb, that's 8.6gb per day.

At a more restrictive 2 sec between txs / 2kb per tx, you have 43200 txs per day x 2kb = 86mb. For a single account. If someone buys 100 such accounts, it's 8.6gb per day.

I'm really curious on how no fees can work.

Blockchains are good, but not really efficient in dealing with spam.

[Zer0Sum]

The people making big bucks off of Steem don't want to fix the system. It's broken in their favor.

That is another lie. The developers, which are the biggest whales, are working hard to improve the ecosystem and platform.

Two changes in the past two days intended to help fix the ecosystem:
https://github.com/steemit/steem/issues/177
https://github.com/steemit/steem/issues/178

According to Github, there have been 21 releases and 599 commits since March. They are as dedicated as any other development team, probably much more so than a majority of other cryptocurrencies.

Furthermore, it is in their best interest to fix Steem and make it the best they can be because they can't dump (see below) and most of the value of their holdings is held in SP. If the value doesn't hold for 2 years, they are going to be much worse off than their paper balances look right now.

If whales are dumping, even if the fish are pumping, the price is not going to hold, and certainly won't appreciate 10x.

You do realize that whales can only dump in 104 weekly payments over the course of 2 years? Steem is pretty well protected from "whale dumps" as compared to any other cryptocurrency. In any other cryptocurrency the whales can dump whenever and however much they want to.

I find that for every brilliant insight Dan Larimer has, he balances it off with something awful/too complicated/possibly sleazy.

Like the liquidity algo has been solved for 100 years...
Just (a) pay every liquidity maker and (b) charge every liquidity taker. Or just do (a) on Steemit.

So there is industry standard practice, but Steemit does something extremely unorthodox. Why?

Well, for one thing the price of STEEM on the Steemit-Market is constantly suppressed...
Right now STEEM costs about $4.45 USD on Polo... but only $3.09 USD on Steemit-Market (30% discount).

But when a n00b uses the Deposit Function to "Buy STEEM" with BTC...
Steemit Inc is charging $4.69 right now... then can just buy it back for $3.09.

Steemit Inc could be making $100,000/day or whatever off n00bs because they have a monopoly on BTC for STEEM deposits...
But for this to work they need fake "liquidity provider" whales to keep the Steemit-Market price suppressed.   

Personally, after about 300 trades I've sold STEEM on the Steemit-Market maybe 2-3 times (I'm always buying it there cheaper).

Call it a conspiracy theory, but I can't see any rational basis for the bizarre algos and market inefficiencies.

[DecentralizeEconomics]

I find that for every brilliant insight Dan Larimer has, he balances it off with something awful/too complicated/possibly sleazy.

Like the liquidity algo has been solved for 100 years...
Just (a) pay every liquidity maker and (b) charge every liquidity taker. Or just do (a) on Steemit.

So there is industry standard practice, but Steemit does something extremely unorthodox. Why?

Well, for one thing the price of STEEM on the Steemit-Market is constantly suppressed...
Right now STEEM costs about $4.45 USD on Polo... but only $3.09 USD on Steemit-Market (30% discount).

But when a n00b uses the Deposit Function to "Buy STEEM" with BTC...
Steemit Inc is charging $4.69 right now... then can just buy it back for $3.09.

Steemit Inc could be making $100,000/day or whatever off n00bs because they have a monopoly on BTC for STEEM deposits...
But for this to work they need fake "liquidity provider" whales to keep the Steemit-Market price suppressed.   

Personally, after about 300 trades I've sold STEEM on the Steemit-Market maybe 2-3 times (I'm always buying it there cheaper).

Call it a conspiracy theory, but I can't see any rational basis for the bizarre algos and market inefficiencies.

Baby Dan and Daddy Stan are serial crooks.  If anybody hasn't figured this out yet they are either brand new to crypto, not paying attention, or mentally retarded.

[jwinterm]

There sure are a lot of big names participating in this...investment scenario. Anything for a buck. Right fellas?

Wow respect, i see some people who usually stand on morale high ground here defending and shilling for such a scam mining.... wtf is going on here.

I'm as perplexed, trust no one.

soon this pyramid will collapse and everyone will look silly.

I notice none of you "holier than thou" types were able to provide a rebuttal to my post:

Morals are subjective. They are derived from religion and one's upbringing, and everyone forms their own version of morals as they experience life.

To some a "sneaky mine" is immoral. Others may liken it to starting a business, and equate it to the developers/organizers of a start up obtaining equity in their project. Are all start ups and corporations immoral? Is capitalism immoral? That is subjective...

To some 12% annual inflation is an unsustainable pyramid scheme. Others may liken it as a good way to gain a huge userbase quickly, then leverage that userbase in the form of profitable features that are yet to be implemented. Can a business not change its business plan, or never expand into other markets? To judge something based on exactly how it exists today instead of where it is headed in the future may be a mistake.

To some extent, this is true, but there are some universal moral standards. Which society condones lying? Where is that accepted moral behavior? In my opinion Steem was born of lies and perpetuates them today. Whether you want to call it a sneaky mine, instamine, premine, fast mine, or whatever, Steem loudly proclaimed in their three or four announce threads, "Fair launch! No premine, instamine, or fast mine!", when of course nothing could be further from the truth - the founders mined 80% of the coins generated during the short PoW phase by their own admission.

They perpetuate the lie by advertising, "Welcome to Steemit, decentralized and incentivized social media.", and generally plastering the word 'decentralized' wherever they possibly can. Of course it's not decentralized, the founders just mined 80% of the mineable coins, making themselves able to elect the vast majority of delegates in the DPoS validation scheme, not too mention wield the vast majority of the influence about who gets paid out and how much. Steem is decentralized like Turkey is a democracy.

Ultimately I think this dishonesty will contribute to the failure of this venture, in conjunction with an overly complex system of tokens and a failure to generate enough users to keep the bubble from deflating, but I'm sure the founders and very early adopters will walk away with a nice stash of BTC. C'est la vie.

[BitcoinNational]

Steem is a steeming pile of trash.  It is absolutely NOT sustainable long-term.  Who would have thought that a "project" by the infamous Larimer gang would be another pathetic, worthless, money grabbing scheme to ripoff the naive?  Just say NO to the Larimer trash and their anti-free speech Chinese communist backers!

perhaps.  but if Larimers can't pull it off after this $333M pump up ... then things look slim for the Omni social media project too

long term stuff

thewhales =  the advertisers

call them accounts content kingmakers, that wickedly insert subliminal 'buy this crap', and have the steam power to hit the frontpage.
no different than the media platforms of before in terms of intent.

They perpetuate the lie by advertising, "Welcome to Steemit, decentralized and incentivized social media.", and generally plastering the word 'decentralized' wherever they possibly can. Of course it's not decentralized, the founders just mined 80% of the mineable coins, making themselves able to elect the vast majority of delegates in the DPoS validation scheme, not too mention wield the vast majority of the influence about who gets paid out and how much. Steem is decentralized like Turkey is a democracy.

You said what I mumbled to myself in disgust in recent days.

$ETH
BTS
Stellar
XRP

Are blatant corporate financed projects.   Larimers China LLC.

They will (and have) adjusted the 'smart contract' as they please.  +ICO / premine nonsense.
 

[magicalacademy]

iamnotback got bribed by the steem mafia, he used to speak against the scam but now he is promoting the pyramid scheme.

[chryspano]

iamnotback got bribed by the steem mafia, he used to speak against the scam but now he is promoting the pyramid scheme.

Lol, for a one week old account you know too much! lol

28/28 of your posts are about STEEM, thats what I call dedication! 

[generalizethis]

iamnotback got bribed by the steem mafia, he used to speak against the scam but now he is promoting the pyramid scheme.

Pfff! Steem Mafia? There's only Monero Mafia--4lifeB@#tch!

[magicalacademy]

iamnotback got bribed by the steem mafia, he used to speak against the scam but now he is promoting the pyramid scheme.

Lol, for a one week old account you know too much! lol

28/28 of your posts are about STEEM, thats what I call dedication!  

I prefer not to engage with SP holders, you will have to troll somebody else sorry! ignore list check

[bones261]

Steemit really needs to work on their security! Some troll just crushed somebody's dream.

https://steemit.com/steemit/@bones/popular-post-gets-hacked

[iamnotback]

iamnotback got bribed by the steem mafia, he used to speak against the scam but now he is promoting the pyramid scheme.

It is not a pyramid scheme if the funding model is long-term viable. (It is a stealth/instamine/premine variant, but that doesn't make it necessarily a pyramid does it?)

I see they've tapped into a clever way to get "free" viral publicity in order to bring 1000s of people (many who are female!) per day to sign up for a social network that forces them to use CC and a blockchain for the first time in their life. They are able to charge this cost to the speculators while the price also goes up! So they've done some aspects correct.

You can't compete against a correct idea, except by embracing that idea (this doesn't preclude a hark fork away from the effects of the stealthmine and Dan's propensity to tack on design complexity though).

Bitcoin has nearly 0 female participation!

Afaics, the problem is they had no viable long-term funding model for this type of structure. But I think I've figured out how to fix the long-term funding model and make the Steem token very popular to use for transactions. It is not the way they were planning to do it. Their way will never work and I will explain why in my coming blog post.

Also they are missing a very important aspect to social networking, which is one of the reasons they are seeing (I presume) such a high attrition rate. They are lacking social networking! Duh! How can you build a social networking site and don't even have a damn "Follow" button. Some of the bad effects you all might be seeing if you view many of the introduceyourself posts, I think is because they don't have any social networking features on the site. It is purely a "sign up and get a free handout" offer, which is not going to get the follow through they need.

They are making so many errors and if they don't get help soon, they will probably fail.

I think I know some design improvements that could fix the viability of their project, but I am asking you all a question below and I haven't yet got an answer from those of you who have the power to make a fork of Steem successful:

...

Perhaps some of you will still complain that Dan, Ned, et al got too many tokens from the stealthmine and it isn't fair to go expend our community resources to turn them into $billionaires. Prepare your arguments for a hard fork of Steemit, but the problem is we'd have a hard time moving all the vested interests over to the forked one. Plus Steemit isn't open source so we'd have to recode that (although I could code that fairly quickly not including the block chain integration). You all should think about this, because I haven't thought too deeply about it yet. They are awarding many of the tokens they mined to the new signups. I need to do some calculations on that.

smooth have you done those calcs?

It is not realistic to fork Steem and remove the stealthmine, unless you all want it to be and will support it sufficiently to make it happen.

So thus I am thinking it is more realistic to work with Dan, Ned, and smooth.

I am a pragmatic person. I want to reach success, not throw my toys on the ground and whine like a useless bitch.

If you guys are serious enough about a fork, perhaps we can negotiate with Dan, Ned, and smooth (et al stealthmine whales) and ask them to donate a portion of their personal SP to the Steemit corporation specifically to be paid out for new sign ups. So they can lower their holdings to something more reasonable compared to it they had done a fair launch.

If it will be long-term successful, they should be rewarded for creating this. We need them. They are the most knowledgeable about their DPoS blockchain code (which is open source).

Where can we view the list of top holders of SP? Where can we view the SP holdings and dispersement of the Steemit corporation?

I individually don't have the resources to have very long-winded debates. Please everyone try to go directly the point with your posts now.

Note if I were to spend all my time forking Steem, this would remove me from working on my fix to Satoshi's PoW design. So it is probably not a good opportunity cost. Maybe there are other developers who are interested though.