Steem pyramid scheme revealed

[iamnotback]

darkcoin brought new people into the cryptosphere

How many?

Compare with Steem.

If the ratio is less than 100:1 I'd be surprised, and will likely very rapidly expand to 1000:1 or 10000:1 if not higher.

What is Steem's attrition rate on new signups? Since no one is compiling this data accurately, we don't know if Steem is failing or not.

Also we run the danger with Steem of wasting the concept. We may only get one chance to get people to try something based on this concept, and if it a failure in the eyes of most of the users, then they may not try another which tries to improve the same concept.

This is why I am thinking we need to launch a competitor to Steem immediately. Cutting corners as necessary to get it launched pronto.

Steem has a problem apparently paying most blog posts nearly nothing (pennies) and overpaying $1000s (even $50,000) for some blog posts (becoming irrational herding mentality). The ability of users to find content related to their own interests is probably not good. You basically have to read all this same redundant crap about Steemit or about the travails of people such as their travels or how they were poor and Steem made them rich, etc.. Afaics, the development of social networking sub-communities within Steem is very poor thus far.

Imagine you actually discovered Steemit on Facebook and know nothing about Bitcoin (never even heard of it). Now what do you see at Steemit? You see some confusing shit you don't understand (STEEM, STEEM POWER, STEEM DOLLARS, transfers, power up, power down, Buy and Sell, etc), a blog post box that says to use Markdown (WTF is markdown!), and a site full of top-ranked crap you aren't interested in (unless you just want to emulate to earn money in which case the site is a monkey-see-monkey-do groupthink). Note I suspect most users are finding Steem as of now from other people who know about blockchain technology, so they have someone helping them to learn. But if you expect Steem to open new markets from hearing about, then that wouldn't be the case.

On the positive side, the outlandishness of Steem is likely generating publicity. And especially at this nascent stage, it is causing many people to change their perspective on blockchain technology. But we run the danger of burnout/flameout for the reasons I stated.

Also if investors are not motivated to buy in long-term, then the price will decline which may cause bloggers to start to power down, which would cause the price to spiral the toilet bowl because 67% of the market capitalization would come up for sale yearly (and again without investors coming in as buying demand).

A competitor launched which is more attractive to investors, could possibly suck the price of Steem down by displacing buying demand. (Or it might just generate more investment in the sector)

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[iamnotback]

Steem has a problem apparently paying most blog posts nearly nothing (pennies) and overpaying $1000s (even $50,000) for some blog posts (becoming irrational herding mentality).

Let me summarize this point for you folks:

@smooth

Please upvote my post and hopefully other high-rollers will do so too...  I'LL SUCK YOUR DICK, MAN!!!  

https://steemit.com/ethereum/@cryptoscalper/breaking-ethereum-news-the-dao-thief-s-dazzling-appearance-post-hardfork

That image is revolting. I can't upvote that. Sorry.

If I see that image and don't cringe and want to hide it, then my only other possible reaction is someone did that to me I would become enraged and rip them to pieces biting their face, gouging their eyes, etc.. This is war. I don't want to see that. That would bring out the most fundamental nature of a man (versus a woman). We indeed can become extremely violent when threatened.

[iamnotback]

Btw, I think I have figured out a better way to structure it than Steem did, which retains the concept but is mathematically much more enticing for the outside investors.

I think the structure can be improved so that:

• The debasement of investors is much lower and decreases over time, and funding from debasement is gradually replaced by funding from transaction fees. This would be explicit in the protocol.
• Bloggers make a more long-term commitment to the site, and in return the site helps them build a long-term community, and the investors are supporting them long-term.
• Fixing the voting and ranking system so can diversify into more markets, such as reviews, music distribution, etc..
• Signups would not include a free award of tokens, and instead an initial quantity would need to be earned via proof-of-work (which would be done automatically for the user, no technical expertise required). This removes the need for the 80% "pre"-mine. Note this precipitates a need for CPU friendly PoW algorithm.
• A superior, scalable microtransaction blockchain design which is my improvement on Satoshi's PoW blockchain (i.e. not proof-of-stake), so as to give a valid use case for transactions that can't be done (nor scaled) with credit cards nor Bitcoin. Note although Graphene (Steem's blockchain) claims 3 seconds per block confirmation speed, this may not be fast enough for real-time gamification transactions (who wants to pause for more than 3 probably 5+ seconds every time they need to access some resource). I also have my doubts about whether DPoS is scalable without being centralized. Also I have my doubts about the reliability of DPoS when pushing for faster transactions, because it depends on only one delegate validator per block (perhaps this could be improved but game theory issues will arise unless it is essentially a centralized, corporate run blockchain and in which case you don't need a blockchain, just run a corporate database?).
  
  Note proof-of-stake would be retained for some aspects such as voting power and rate-limiting.

...I have since done more in depth analysis of the math of Steem variables and to me it looks very unattractive for long-term investors to buy STEEM POWER.

It is not yet clear how investors would be rewarded by fast transfers of STEEM between content creators. There is no mechanism to transfer value to the investors, except I guess if demand for STEEM becomes so very great then the ratio of SP to STEEM will drop much below 9, then the SP holders would be earning a compounding interest rate per the recent math I showed. But we are talking about needing $10 billions of transactional demand yearly for STEEM within a few years. There is no mechanism in the Steem protocol to scale back rewards on blogging other than to decrease the price and shrink the market capitalization. So if the rate of transaction growth can't keep up, then the price must drop.

That is a very bad deal for long-term investors. Far too risky. It is a fatal error. Not to mention that the Larimers Incorporated have taken too big of a share of the pie.

[smooth]

darkcoin brought new people into the cryptosphere

How many?

Compare with Steem.

If the ratio is less than 100:1 I'd be surprised, and will likely very rapidly expand to 1000:1 or 10000:1 if not higher.

What is Steem's attrition rate on new signups? Since no one is compiling this data accurately, we don't know if Steem is failing or not.

I don't know the number, but regardless of attrition rate it there are still orders of magnitude more people actively using it than were brought into the cryptosphere by darkcoin. Come on, it isn't even close. Just look at the volume of substantive comments being posted which is sort of a Proof of Actual (non-attritted) User. Unless you think Ned has hired an army of sock puppets in the Philippines to pretend to be users. That is possible, of course, but I just don't believe it.

That doesn't mean a competitor to Steem couldn't do even better.

no forking is allowed so I'd have to start from scratch

Not entirely from scratch. The Graphine code base is fully open source (MIT license) so you could start with that.

[iamnotback]

darkcoin brought new people into the cryptosphere

How many?

Compare with Steem.

If the ratio is less than 100:1 I'd be surprised, and will likely very rapidly expand to 1000:1 or 10000:1 if not higher.

What is Steem's attrition rate on new signups? Since no one is compiling this data accurately, we don't know if Steem is failing or not.

I don't know the number, but regardless of attrition rate it there are still orders of magnitude more people actively using it than were brought into the cryptosphere by darkcoin. Come on, it isn't even close. Just look at the volume of substantive comments being posted which is sort of a Proof of Actual (non-attritted) User. Unless you think Ned has hired an army of sock puppets in the Philippines to pretend to be users. That is possible, of course, but I just don't believe it.

That doesn't mean a competitor to Steem couldn't do even better.

The attrition rate matters w.r.t. to the bolded text I wrote, as to whether they can cross the chasm from the blocknerds very motivated types, to the masses.

It is not clear yet if Steem can cross the chasm from gfs of blockchain nerds being coaxed by their bfs to post on Steem, to a wider demographic. Remember Beyonce and professional investors measure importance in terms of the demographic's global share of the population. Blockchain nerds and their bitches isn't likely a very large share of the population.

Why would you find relevant a comparison of a silly anonymous coin to a blogging site that pays out crypto-currency. Of course the latter is going to have more participation. That is a no brainer.

The issue that matters is if Steem can not just suck in (the 100,000 to 1 million) Bitcoin nerds and their gfs, but new people from outside of Bitcoin. Do we see evidence of that?

If usership is 7500, then Steem hasn't even gotten 10% of the Bitcoin community to be active yet. Of course it is early yet and usership might be growing fast. Has anyone projected how long until they reach all Bitcoin's usership?

[smooth]

darkcoin brought new people into the cryptosphere

How many?

Compare with Steem.

If the ratio is less than 100:1 I'd be surprised, and will likely very rapidly expand to 1000:1 or 10000:1 if not higher.

What is Steem's attrition rate on new signups? Since no one is compiling this data accurately, we don't know if Steem is failing or not.

I don't know the number, but regardless of attrition rate it there are still orders of magnitude more people actively using it than were brought into the cryptosphere by darkcoin. Come on, it isn't even close. Just look at the volume of substantive comments being posted which is sort of a Proof of Actual (non-attritted) User. Unless you think Ned has hired an army of sock puppets in the Philippines to pretend to be users. That is possible, of course, but I just don't believe it.

That doesn't mean a competitor to Steem couldn't do even better.

The attrition rate matters w.r.t. to the bolded text I wrote, as to whether they can cross the chasm from the blocknerds very motivated types, to the masses.

Of course it "matters" generally, no one would deny that. But compared to "darkcoin brought new people into the cryptosphere"? That's a bad joke.

The issue that matters is if Steem can not just suck in (the 100,000 to 1 million) Bitcoin nerds and their gfs, but new people from outside of Bitcoin. Do we see evidence of that?

Hard evidence no in terms of validated demographics? No, especially since it is hard to tell whether new users are Bitcoin users are not without them mentioning it, but it is pretty apparent to me that many of the new users are not Bitcoin users. Answering their questions about how to get their payments out (they have often never heard of Bittrex, Poloniex, Coinbase, etc.) makes that pretty clear for example.

Why would you find relevant a comparison of a silly anonymous coin to a blogging site that pays out crypto-currency

I don't, but the claim was made and I replied to it, pointing out how absurd it was. Unless these claims are refuted, less informed and less experienced readers may think they are valid.

If usership is 7500, then Steem hasn't even gotten 10% of the Bitcoin community to be active yet. Of course it is early yet and usership might be growing fast. Has anyone projected how long until they reach all Bitcoin's usership?

I've not seen any such forecast, but it is clear that it is still growing rapidly. Literally every day the alexa rank drops.

http://www.alexa.com/siteinfo/steemit.com (this link doesn't work for me, type in "steemit.com" when you get there)

[iamnotback]

Hard evidence no in terms of validated demographics? No, especially since it is hard to tell whether new users are Bitcoin users are not without them mentioning it, but it is pretty apparent to me that many of the new users are not Bitcoin users. Answering their questions about how to get their payments out (they have often never heard of Bittrex, Poloniex, Coinbase, etc.) makes that pretty clear for example.

But you don't know if their bfs are blocknerds who have been mentioning Bitcoin for years.

I saw many blogs explaining that females were coaxed into it by their Bitcoin bfs. It is like they get to make their bfs happy and make themselves some cash at same time. But what about the ladies who signed up and only earned 3 pennies. Do we hear from them?

You've probably read more blogs than I have. I remember some girl from Hong Kong and another from China. How is she doing?

[smooth]

Hard evidence no in terms of validated demographics? No, especially since it is hard to tell whether new users are Bitcoin users are not without them mentioning it, but it is pretty apparent to me that many of the new users are not Bitcoin users. Answering their questions about how to get their payments out (they have often never heard of Bittrex, Poloniex, Coinbase, etc.) makes that pretty clear for example.

But you don't know if their bfs are blocknerds who have been mentioning Bitcoin for years.

I saw many blogs explaining that females were coaxed into it by their Bitcoin bfs. It is like they get to make their bfs happy and make themselves some cash at same time. But what about the ladies who signed up and only earned 3 pennies. Do we hear from them?

Of course some are that, but not all. Many ages and backgrounds are represented. The apparent demographics are just much wider than Bitcoiners.

Once it gets large enough that real studies can be done I'm sure we'll see better numbers. Or we'll see that growth plateaus once people one-degree away from Bitcoin are tapped out. That won't take long.

You've probably read more blogs than I have. I remember some girl from Hong Kong and another from China. How is she doing?

At this point the weakest part of the site is that there is no working following feature, so I have no idea how anyone is doing even if I found their initial posts interesting. The whole thing is one big firehose, I just puck out posts more or less at random to see a sample. I have also hired a staff of 10 people to find posts for me to read according to my instructions, but obviously no one expects the typical user to do that.

That will improve; organizational features are in development, but the developers are very overworked.

[iamnotback]

Hard evidence no in terms of validated demographics? No, especially since it is hard to tell whether new users are Bitcoin users are not without them mentioning it, but it is pretty apparent to me that many of the new users are not Bitcoin users. Answering their questions about how to get their payments out (they have often never heard of Bittrex, Poloniex, Coinbase, etc.) makes that pretty clear for example.

But you don't know if their bfs are blocknerds who have been mentioning Bitcoin for years.

I saw many blogs explaining that females were coaxed into it by their Bitcoin bfs. It is like they get to make their bfs happy and make themselves some cash at same time. But what about the ladies who signed up and only earned 3 pennies. Do we hear from them?

Of course some are that, but not all. Many ages and backgrounds are represented. The apparent demographics are just much wider than Bitcoiners.

Once it gets large enough that real studies can be done I'm sure we'll see better numbers. Or we'll see that growth plateaus once people one-degree away from Bitcoin are tapped out. That won't take long.

Bitcoiners have all ages and demographics one degree away from them.

[smooth]

Hard evidence no in terms of validated demographics? No, especially since it is hard to tell whether new users are Bitcoin users are not without them mentioning it, but it is pretty apparent to me that many of the new users are not Bitcoin users. Answering their questions about how to get their payments out (they have often never heard of Bittrex, Poloniex, Coinbase, etc.) makes that pretty clear for example.

But you don't know if their bfs are blocknerds who have been mentioning Bitcoin for years.

I saw many blogs explaining that females were coaxed into it by their Bitcoin bfs. It is like they get to make their bfs happy and make themselves some cash at same time. But what about the ladies who signed up and only earned 3 pennies. Do we hear from them?

Of course some are that, but not all. Many ages and backgrounds are represented. The apparent demographics are just much wider than Bitcoiners.

Once it gets large enough that real studies can be done I'm sure we'll see better numbers. Or we'll see that growth plateaus once people one-degree away from Bitcoin are tapped out. That won't take long.

Bitcoiners have all ages and demographics one degree away from them.

True, but a story frequently told is that attempts to spread previous cryptos even that one degree also failed, but with Steemit they are succeeding. The real question will be whether it can spread more than one degree or is getting uptake outside of crypto altogether, and I do think there is at least some of the latter (former is entirely unknown, at least to me). Though even just a high acceptance rate at one degree still beats previous crypto by some factor. Overall we don't know yet. The site has really only been live (meaning payouts, and the explosive user growth) for three weeks.

[iamnotback]

Hard evidence no in terms of validated demographics? No, especially since it is hard to tell whether new users are Bitcoin users are not without them mentioning it, but it is pretty apparent to me that many of the new users are not Bitcoin users. Answering their questions about how to get their payments out (they have often never heard of Bittrex, Poloniex, Coinbase, etc.) makes that pretty clear for example.

But you don't know if their bfs are blocknerds who have been mentioning Bitcoin for years.

I saw many blogs explaining that females were coaxed into it by their Bitcoin bfs. It is like they get to make their bfs happy and make themselves some cash at same time. But what about the ladies who signed up and only earned 3 pennies. Do we hear from them?

Of course some are that, but not all. Many ages and backgrounds are represented. The apparent demographics are just much wider than Bitcoiners.

Once it gets large enough that real studies can be done I'm sure we'll see better numbers. Or we'll see that growth plateaus once people one-degree away from Bitcoin are tapped out. That won't take long.

Bitcoiners have all ages and demographics one degree away from them.

True, but a story frequently told is that attempts to spread previous cryptos even that one degree also failed, but with Steemit they are succeeding. The real question will be whether it can spread more than one degree or is getting uptake outside of crypto altogether, and I do think there is at least some of the latter (former is entirely unknown, at least to me). Though even just a high acceptance rate at one degree still beats previous crypto by some factor. Overall we don't know yet. The site has really only been live (meaning payouts, and the explosive user growth) for three weeks.

Agreed on all that.

I'd be more bullish if it was truly open source. I think open source could quickly race past closed source.

I'd be more bullish if they weren't penalizing long-term investors who buy in from the outside.

I'd be more bullish if they weren't using a quadratic (super-linear, sub-quadratic might be sufficient motivation) payout to try to trick users into overestimating what they can earn from the site, and instead were more forthcoming about the potential revenue users can earn. The focus seems to be very short-term pumpy-dumpy, instead of long-term focused. The design pisses off the bulk of your signups (unless they are one-degree from blocknerds in which case they probably happy even if they earned very little), it "pre"-mine 80% (which is probably reducing at only about 10% per year if most signups end up abandoned accounts because can't earn the minimum 100 SP to initiate power down), forces long-term investors to lockup for 2 years (1 year weighted price)...

[smooth]

earn the minimum 100 SP to initiate power down

It isn't 100 SP minimum, it is 10x the minimum account balance. Currently that is 10x3 SP = 30 SP. Natural growth in SP counts, as does reductions in the minimum (applies retroactively to older accounts). I think most of these will end up being redeemable, though I don't know what percentage of users will actually do so.

The attitude of the social media userbase is very different from the crypto user base in terms of not being so focused on getting the SP money out. Looking at SP as influence and karma (especially when received free and/or earned rather than purchased as speculation) rather than being a coin at all is a perspective that is under-appreciated from the crypto side.

Also, as the the user base has grown, the ways to earn have grown as well. For example, most non-retarded comments are getting upvotes now, which is a big change from the previous status quo of typically 0 votes per comment. Maybe it is only a few cents in most cases ($1 not terribly uncommon) but it is better than nothing, especially since people may most many comments per day.

[iamnotback]

earn the minimum 100 SP to initiate power down

It isn't 100 SP minimum, it is 10x the minimum account balance. Currently that is 10x3 SP = 30 SP. Natural growth in SP counts, as does reductions in the minimum (applies retroactively to older accounts). I think most of these will end up being redeemable, though I don't know what percentage of users will actually do so.

Please explain more in detail. I want to explore if Sybil attacking the signups is viable.

Who sets the minimum and how is it computed? Will it decline from 3?

The attitude of the social media userbase is very different from the crypto user base in terms of not being so focused on getting the SP money out. Looking at SP as influence and karma (especially when received free and/or earned rather than purchased as speculation) rather than being a coin at all is a perspective that is under-appreciated from the crypto side.

Yes and that is why I think a better design is don't pay bloggers any STEEM. Only SP.

Bloggers should be long-term invested, not extractors (like myself?).

Also, as the the user base has grown, the ways to earn have grown as well. For example, most non-retarded comments are getting upvotes now, which is a big change from the previous status quo of typically 0 votes per comment. Maybe it is only a few cents in most cases ($1 not terribly uncommon) but it is better than nothing, especially since people may most many comments per day.

I haven't done analysis yet to determine if paying for comments is worthwhile.

[smooth]

I want to explore if Sybil attacking the signups is viable.

Who sets the minimum and how is it computed? Will it decline from 3?

Sybil attacking depends on the measures used by whoever it is who is paying for the account with their Steem. If you are getting your account from the steemit web site, they have various rules about social media accounts, IP addresses, etc. I'm sure they can all be bypassed, but that may or may not be worth it for $10 of value that has further restrictions on liquidating it (and these rules can all be changed if it becomes a problem; nothing at all is promised when it comes to free accounts). The minimum to power down is not the primary obstacle to milking the free accounts, but it does reduce the incentive somewhat, so other barriers can be a bit lower, inconveniencing legitimate users less.

The minimum is set by witness vote. Might decline, might increase. There is no set rule. It is possible the minimum might at some point not be sufficient to actually use the network much if at all, since bandwidth scarcity could increase the amount of SP needed. That depends on a number of things including usage, technology, etc.

I haven't done analysis yet to determine if paying for comments is worthwhile.

In practice the main effect is to sprinkle a little rewards around to a lot of people. I doubt anyone will make a living as a professional commenter, but who knows.

[Zer0Sum]

The focus seems to be very short-term pumpy-dumpy, instead of long-term focused.

Think outside the box. man.

It's not about more boring fucking "social media" for professional slackers.

They are jumpstarting a currency with 3 sec confirmation, 500,000 tx/second blockchain...
The "blogging platform" giveaway is just a Trojan Horse to build the user base to, say, 100,000 in 6-12 months...
Then you can build ANYTHING that requires micropayments on Steemit... any market of any kind that moves real money.

It's not a pump...
Some people are actually serious about "world domination" = mainstream cryptocurrency...
And retiring that embarrassing geezer Bitcoin... and the incoherent, schizophrenic Ethereum. 

Think big, man.

[iamnotback]

The focus seems to be very short-term pumpy-dumpy, instead of long-term focused.

Think outside the box. man.

It's not about more boring fucking "social media" for professional slackers.

They are jumpstarting a currency with 3 sec confirmation, 500,000 tx/second blockchain...
The "blogging platform" giveaway is just a Trojan Horse to build the user base to, say, 100,000 in 6-12 months...
Then you can build ANYTHING that requires micropayments on Steemit... any market of any kind that moves real money.

It's not a pump...
Some people are actually serious about "world domination" = mainstream cryptocurrency...
And retiring that embarrassing geezer Bitcoin... and the incoherent, schizophrenic Ethereum.  

Think big, man.

Yeah I realized that long before Steem was announced (I been devising similar plans over the past months for launching a microtransactions block chain with social networking):

The only reason to be bullish that I can see is if you think the demand for STEEM will increase. And the only reason I can find for that which makes any sense to me, is if the transactions involving STEEM will increase to $billions per year. That is a very big if.

Agree somewhat. SP as buying access to the network may or may not also be significant...

I have at least two retorts.

1. 100,000 users is not enough to scale up a microtransactions ecosystem. You need many millions. And I don't know if they can cross the chasm:

It is not clear yet if Steem can cross the chasm from gfs of blockchain nerds being coaxed by their bfs to post on Steem, to a wider demographic. Remember Beyonce and professional investors measure importance in terms of the demographic's global share of the population. Blockchain nerds and their bitches isn't likely a very large share of the population.

2. I am not confident that their Graphene blockchain is entirely adequate (it may be okay for some use cases but who knows maybe not for the most important use case that is discovered):

I think the structure can be improved so that:

• A superior, scalable microtransaction blockchain design which is my improvement on Satoshi's PoW blockchain (i.e. not proof-of-stake), so as to give a valid use case for transactions that can't be done (nor scaled) with credit cards nor Bitcoin. Note although Graphene (Steem's blockchain) claims 3 seconds per block confirmation speed, this may not be fast enough for real-time gamification transactions (who wants to pause for more than 3 probably 5+ seconds every time they need to access some resource). I also have my doubts about whether DPoS is scalable without being centralized. Also I have my doubts about the reliability of DPoS when pushing for faster transactions, because it depends on only one delegate validator per block (perhaps this could be improved but game theory issues will arise unless it is essentially a centralized, corporate run blockchain and in which case you don't need a blockchain, just run a corporate database?).
  
  Note proof-of-stake would be retained for some aspects such as voting power and rate-limiting.

[iamnotback]

I want to explore if Sybil attacking the signups is viable.

Who sets the minimum and how is it computed? Will it decline from 3?

Sybil attacking depends on the measures used by whoever it is who is paying for the account with their Steem. If you are getting your account from the steemit web site, they have various rules about social media accounts, IP addresses, etc. I'm sure they can all be bypassed, but that may or may not be worth it for $10 of value that has further restrictions on liquidating it (and these rules can all be changed if it becomes a problem; nothing at all is promised when it comes to free accounts). The minimum to power down is not the primary obstacle to milking the free accounts, but it does reduce the incentive somewhat, so other barriers can be a bit lower, inconveniencing legitimate users less.

The minimum is set by witness vote. Might decline, might increase. There is no set rule. It is possible the minimum might at some point not be sufficient to actually use the network much if at all, since bandwidth scarcity could increase the amount of SP needed. That depends on a number of things including usage, technology, etc.

My point is that it has to be difficult to reach the power down level, else it can pay to Sybil attack. So while 10 free with 30 power down threshold might be borderline for the attacker, it must also not be too easy for average users to hit that level unless they stay on the site for a while, else the Sybil attack may become viable by arbitraging the labor costs in the Africa. I don't yet know what the attrition rate is even though I've asked for that data numerous times. Surely with your resources, you would want to know. I assume Dan and Ned know, but they aren't telling us apparently.

If the witnesses vote to fork the protocol to block the accounts, that would be equivalent to Ethereum hard forking to stop the DAO attacker. It would mean it is not a blockchain that can be trusted to honor its own rules.

One strategy might be to signup as many free 10 SP accounts as you can using harvested Facebook accounts, then set up bots to earn curation rewards and/or hire cheap blogging labor to raise them up to 30 SP, you can power them down. I've seen phone verified Facebook accounts for as low as 80 cents, but I think you could create them much cheaper than that. For example, here in the Philippines you could probably buy mobile phone numbers for as low as 20 cents each (maybe half that in bulk, especially stolen ones). At 30 SP threshold it appears borderline, but at 20 SP, I think it would become very viable. I bet you can find decent bloggers in Africa who can emulate the popular posts, for perhaps a few bucks per successful blog. They could invent interesting life stories, use photos of others on the Internet, doctor them with Photoshop to paint Steemit on their Tshirt, etc..

Bandwidth costs less than $10 per terabyte. It is costing more on Graphene because Graphene is not the best design we can do (for example on Graphene then all delegate miners have to validate all transactions so O(N²) bandwidth cost where N is number mining nodes). So if a competitor comes along to challenge Steem with a better cost model for transactions, then game over because users don't like to pay to use social networks and if they can't earn fast enough to cover their bandwidth allocation, then they leave for the technology that can.

I haven't done analysis yet to determine if paying for comments is worthwhile.

In practice the main effect is to sprinkle a little rewards around to a lot of people. I doubt anyone will make a living as a professional commenter, but who knows.

Those who have a financial or "SP as karma level" incentive to comment, are those who aren't successful at earning from blogging.

So that might true if we end up with more professional bloggers and their flock or followers earning some karma from commenting and post curating.

What if they earn less from commenting than their bandwidth allowance cost.  

[smooth]

One strategy might be to signup as many free 10 SP accounts

The free offer is "$10 worth of SP" (i.e. 3 SP at present) not 10 SP. The 10 SP may have been the offer at one time but not any more.

[iamnotback]

One strategy might be to signup as many free 10 SP accounts

The free offer is "$10 worth of SP" (i.e. 3 SP at present) not 10 SP. The 10 SP may have been the offer at one time but not any more.

Ah I see. So the point remains that users need to want to stay on the site, else they will have many abandoned 3 SP accounts.

Edit: the data is here that 29k of 34k (85%) have not reached power down level and majority (of them or new signups?) were not active in the last 7 days:

https://steemd.com/distribution

[smooth]

One strategy might be to signup as many free 10 SP accounts

The free offer is "$10 worth of SP" (i.e. 3 SP at present) not 10 SP. The 10 SP may have been the offer at one time but not any more.

Ah I see. So the point remains that users need to want to stay on the site, else they will have many abandoned 3 SP accounts.

No doubt. Of course nothing prevents those users from coming back later to claim the accounts if the value goes up. There is no maintenance cost to idle accounts that don't use bandwidth.