Steem pyramid scheme revealed

[generalizethis]

I had joined steemit and made a couple of articles and am wondering is it still viable to post there and make a little extra income or is the system rigged in favor of certain writers? I see mixed feedback primarily negative now but want more info from those successfully using it.

The best thing to do is have a verifiable introducemyself post. If you look at them, you'll see if you can tell a story about yourself with words and images, that you humanize yourself for the reader and people are more likely to give to someone they can empathize with--plus there's an incentive to bring new users into the site and the motivated upvoters know this. Also, technical backgrounds seem to do as well as a cute face and boobs, so if you have one, nerd it up.

After that it's really a matter if you content creation is your thing or curation or a mix--feel like there should be moderation incentives, but don't think there are (and look at the above post for why).

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[generalizethis]

The problem with steemit is that posts are way too long, most people nowadays don't bother reading long stories they want to consume the most content in the least amount of time.

Btw I made 5k by posting fake intro post, I created 4 bogus profil, took photos of travel and stuff from facebook wrote a few things and made over 1000$ per post on average, some users asked me some proof which i ignored. Only thing i had to do was to order 5 sim ( in UK u can get as much as you want) so yeah pretty good site

Making sure this sticks around.

And now I get 404 errors and unknown account errors when I try to go my account--that's some coincidence.

@smooth, if I need you to witness for account recovery I'll contact you by way of the stone quarry company's shareholder's hotline number. Risto has a secret message only he and I know, so he can verify further if you have doubts. Doubt it is needed , but just in case.

[iamnotback]

smooth et al, please check my logic on this.

I am thinking that steemit.com (and not the users) communicates with the 19 delegates (witnesses) for the DPoS Graphene blockchain. I believe this is why when steemit's servers were recently DDoS attacked, the blockchain was not successfully DDoS attacked, because those witness nodes can easily filter a DDoS attack since they know they will only be interfacing with steemit.com's servers (IP addresses) most of the time. Also with 19 of them, they each only need to absorb 1/19th of a DDoS attack.

But the problem is that I presume steemit.com is not sending all the blockchain transactions to the users for the users's computers to validate client side, thus the users are completely dependent on steemit.com to send them correct data. Meaning steemit.com could influence the rankings that users see and thus the votes that users sign client side. Thus really steemit.com is a centralized controller in the process.

So it almost seems pointless to put all that data on the Steem blockchain because users have to trust an aggregator such as steemit.com. We can argue that users could choose between different aggregators as a justification. But it almost seems pointless because the Steem blockchain is controlled by stake which is controlled by a few insiders who elect the 19 delegate witness that validate the blockchain, so in essence the features that get added to the blockchain will be the ones that benefit closed source steemit the most, if there are competing aggregators. Think about it. Nobody is paying steemit.com anything, so what is paying for it.

In short, the entire thing is a farce. It is just a distributed corporation in the form of key stakeholders. Thus really if the RIAA wants to sue, they can just name the top stakeholders, since these people control all of this system.

I think it is nearly impractical (implausible) to build a truly decentralized blockchain system that needs to aggregate all the data from all users periodically and distribute to all users, and remain scalable to 10,000s of transactions per second while also remaining persmissionless.

[smooth]

But the problem is that I presume steemit.com is not sending all the blockchain transactions to the users for the users's computers to validate client side, thus the users are completely dependent on steemit.com to send them correct data. Meaning steemit.com could influence the rankings that users see and thus the votes that users sign client side. Thus really steemit.com is a centralized controller in the process.

I could have sworn I posted this just a few hours ago: https://steemit.com/piston/@xeroc/piston-web-first-open-source-steem-gui---searching-for-alpha-testers

If Steem is successful there will be many clients, not just these. Steemit has said they are planning to open source the web portion of their client "soon".

Control of stake is another issue, and probably a more valid criticism.

[Mickeyb]

but want more info from those successfully using it.

They are making money from months and months then why the sudden pump ? don't you think it should have been a breaking news then ?

If you have the time to post ,try it. But don't buy steem at these prices.

[smooth]

but want more info from those successfully using it.

They are making money from months and months then why the sudden pump ? don't you think it should have been a breaking news then ?

Although the site was accessible and people could post, vote, and comment, no payouts occurred until July 4. Many people probably thought it was a fraud or would fail by then, or just have no users. When the payouts were made and many people actually got money in their hands, interest in the platform increased enormously.

[iamnotback]

But the problem is that I presume steemit.com is not sending all the blockchain transactions to the users for the users's computers to validate client side, thus the users are completely dependent on steemit.com to send them correct data. Meaning steemit.com could influence the rankings that users see and thus the votes that users sign client side. Thus really steemit.com is a centralized controller in the process.

I could have sworn I posted this just a few hours ago: https://steemit.com/piston/@xeroc/piston-web-first-open-source-steem-gui---searching-for-alpha-testers

You did. I was thinking of your post when I wrote the post you are replying to. I don't forget things that easily.

If Steem is successful there will be many clients, not just these. Steemit has said they are planning to open source the web portion of their client "soon".

But those will exist only with approval of Dan and Ned who control which features get added to the Steem blockchain as I wrote:

We can argue that users could choose between different aggregators as a justification. But it almost seems pointless because the Steem blockchain is controlled by stake which is controlled by a few insiders who elect the 19 delegate witness that validate the blockchain, so in essence the features that get added to the blockchain will be the ones that benefit closed source steemit the most, if there are competing aggregators. Think about it. Nobody is paying steemit.com anything, so what is paying for it.

They are subsidizing the cost of running Steemit.com with their whale sized stakes in Steem.

Control of stake is another issue, and probably a more valid criticism.

You can't separate the two, per my reiteration above.

The government or RIAA can sue or force Dan, Ned, and smooth to do what ever. There is no permissionless resilence here. This is the problem with a proof-of-stake blockchain. I dare say it isn't even a blockchain, but rather a distributed corporate database.

It would be very difficult if not impossible to make a competitor which is actually a decentralized system, because of the need for all users to see all the changes on the blockchain. My design for an improvement to Satoshi's design, hinges on the fact that users don't need to see the transactions of all other users all the time.

[TrueAnon]

I think STEEM is good idea. But I think the price is BS WAY over-valued!!!

[iamnotback]

Carrying on from my prior post...

Furthermore, please note that the Steem white paper's claim there are no transaction fees is an obfuscation of the truth (i.e. it is a lie). Users need STEEM and/or SP stake in order to send any data to the blockchain, i.e. stake-weighted bandwidth limits. The stake holders vote on delegates who then vote on the choice of amount of dilution of the money supply in order to pay the various nodes in the system which validate and maintain the blockchain.

Since this dilution of the money supply debasing the value of the STEEM and/or SP holdings of the user, then this is analogous to paying a transaction fee. The difference is that if the users were paying transaction fees, we could have a competitive market of competing aggregators (e.g. steemit.com) which the users are paying, instead of Dan, Ned, and smooth deciding for the users how much to pay the various nodes (thus kickbacks, overpaying, and all sorts of corruption possible not to mention being very vulnerable to legal action from the government and/or RIAA). Worse is even if the user is not using the system, their stake is continuously being debased! It is not a meritocracy!

This is why people are stating that users will need to periodically buy more stake with outside currency, if they don't earn enough from blogging, because the Steem system is debasing them continuously. So there is no advantage over transactions fees (except for not needing to validate a microtransaction each time a user votes) and some severe disadvantages. I am telling you all that the Graphene blockchain design is not sufficient. I didn't waste the past year or more fixing Satoshi's design and not choosing to adopt Dan's DPoS, because I am an idiot. I did that, because I can see that DPoS is a dead-end direction.

We covered upthread and the other Steem threads, that the insiders' 80% of the money supply (stake) "pre"-mine is not going to be diluted much faster than 10% yearly (and even that 10% is assuming they don't use their voting power to further concentrate their stake), because we were able to compute from the published blockchain data that the attrition rate of new signups is roughly 80% and thus the majority of the 40% portion of the "pre"-mine allocated to giving away to new signups, will become abandoned and thus removed from the effective money supply.

CoinHoarder, this is what I mean when I say Dan always produces designs which are socialism or top-down collectivism, instead of true decentralization and maximum degrees-of-freedom+resilience. I always know he will do this. It is something in the way his brain works which AnonyMint observed back in 2013 in our discussion/debates on this BCT forum.

[smooth]

Dan, Ned, and smooth

LOL, as if my tiny 1-2% stake even gets me a seat at the table.

If they manage to make a success of it I stand to do well, but I have zero say about anything. Probably quite a few things would be different if I did, but I don't so I'm just a passive investor like (almost) everyone else.

[Carmen_Sandiego]

Not sure if the OP is right, but this high increase in the price seemed unnatural
and now we can see the results in the dumps. It's better to wait the dust settles before making major decisions.

[iamnotback]

Dan, Ned, and smooth

LOL, as if my tiny 1-2% stake even gets me a seat at the table.

If they manage to make a success of it I stand to do well, but I have zero say about anything. Probably quite a few things would be different if I did, but I don't so I'm just a passive investor like (almost) everyone else.

Thanks for the correction. My bad. But also note my point that the 40% allocated to pay new signups is likely to be 80% abandoned, thus your 1 - 2% is probably effectively about 1.5 - 3%.

[DecentralizeEconomics]

Carrying on from my prior post...

Furthermore, please note that the Steem white paper's claim there are no transaction fees is an obfuscation of the truth (i.e. it is a lie). Users need STEEM and/or SP stake in order to send any data to the blockchain, i.e. stake-weighted bandwidth limits. The stake holders vote on delegates who then vote on the choice of amount of dilution of the money supply in order to pay the various nodes in the system which validate and maintain the blockchain.

Since this dilution of the money supply debasing the value of the STEEM and/or SP holdings of the user, then this is analogous to paying a transaction fee. The difference is that if the users were paying transaction fees, we could have a competitive market of competing aggregators (e.g. steemit.com) which the users are paying, instead of Dan, Ned, and smooth deciding for the users how much to pay the various nodes (thus kickbacks, overpaying, and all sorts of corruption possible not to mention being very vulnerable to legal action from the government and/or RIAA). Worse is even if the user is not using the system, their stake is continuously being debased! It is not a meritocracy!

This is why people are stating that users will need to periodically buy more stake with outside currency, if they don't earn enough from blogging, because the Steem system is debasing them continuously. So there is no advantage over transactions fees (except for not needing to validate a microtransaction each time a user votes) and some severe disadvantages. I am telling you all that the Graphene blockchain design is not sufficient. I didn't waste the past year or more fixing Satoshi's design and not choosing to adopt Dan's DPoS, because I am an idiot. I did that, because I can see that DPoS is a dead-end direction.

We covered upthread and the other Steem threads, that the insiders' 80% of the money supply (stake) "pre"-mine is not going to be diluted much faster than 10% yearly (assuming they don't use their voting power to further concentrate their stake), because we were able to compute from the published blockchain data that the attrition rate of new signups is roughly 80% and thus the majority of the 40% portion of the "pre"-mine allocated to giving away to new signups, will become abandoned and thus removed from the effective money supply.

CoinHoarder, this is what I mean when I say Dan always produces designs which are socialism or top-down collectivism, instead of true decentralization and maximum degrees-of-freedom+resilience. I always know he will do this. It is something in the way his brain works which AnonyMint observed back in 2013 in our discussion/debates on this BCT forum.

You could have just said that it's COMMUNISM.

[FandangledGizmo]

Are they seriously abandoning their account to make comments on reddit that will never earn them a cent or collect curator rewards on another site that doesn't yet exist? Steemit is the only game in town (that pays in something other than karma hugs) and likely the payout today will increase over time if the site is successful--so either these people are irrational or full of shit.

If they are the 1.3 billion from Facebook, they aren't likely using Reddit either with its 0.16 billion usership. There are so many different things that users can do on Facebook. Steem is so one-feature-wonder.

And my point is the monetary payouts are not important to most users (because they aren't significant).

The concept of Steem has some upside, but fully leveraging the conceptual model is going to require a lot more development work.

The developer of Steem is one of the most talented in crypto so if the Steem vs. Reddit model worked they could certainly rapidly develop a Facebook type extension on the same principles where the most popular content is rewarded. (You could actually create any model that paid new users for sign ups/content/other and in the process attract lots of new users and look like you have a popular and growing site.)

The question is how sustainable is the business model?

In contrast to tokens like BTC that aim to be adopted as a form of limited money which are also reliant on some new demand to offset new supply like Gold, Steem is a company share, with VERY high inflation & a large percentage controlled by the founders. Unfortunately the company Steemit has no actual revenue source. It is paying it's expenses (New Steemit users & their content) by diluting Steem holders at >0.2% daily. In that sense it's a pyramid scheme, in that it is a company that sells no product or services and is reliant on new Steem speculators to pay out new users and content rewards.

Once speculators realise this, demand should decline and at some point it is mathematically inevitable anyway...
Because at >0.2% a day you'd have to believe Steem will increase by >6% a month to hold it. (Steem is effectively charging >10X the rate speculators are willing to borrow at the majority of the time on Polo https://poloniex.com/lending#BTC)


(This is also in contrast to the Synereo model which is sustainable because the incomes and rewards are sourced from advertising revenue.)

[iamnotback]

The developer of Steem is one of the most talented in crypto so if the Steem vs. Reddit model worked they could certainly rapidly develop a Facebook type extension on the same principles where the most popular content is rewarded. (You could actually create any model that paid new users for sign ups/content/other and in the process attract lots of new users and look like you have a popular and growing site.)

But Facebook has 1000s of employees. You don't develop the breadth and depth of Facebook's ecosystem and thus feature set overnight with one developer. They need a plan to build a company with many developers in order to reproduce Facebook. Or they need open source it and hope the ecosystem grows with network effects. But their license on Steem doesn't even allow forking. And Steemit isn't even open sourced (yet).

[FandangledGizmo]

The developer of Steem is one of the most talented in crypto so if the Steem vs. Reddit model worked they could certainly rapidly develop a Facebook type extension on the same principles where the most popular content is rewarded. (You could actually create any model that paid new users for sign ups/content/other and in the process attract lots of new users and look like you have a popular and growing site.)

But Facebook has 1000s of employees. You don't develop the breadth and depth of Facebook's ecosystem and thus feature set overnight with one developer. They need a plan to build a company with many developers in order to reproduce Facebook. Or they need open source it and hope the ecosystem grows with network effects. But their license on Steem doesn't even allow forking. And Steemit isn't even open sourced (yet).

As BTS and now Steem have shown they are extremely talented, and could easily create something workable from scratch, but yes I agree they need a credible business plan to create a serious competitor/player going forward.

More importantly they need a sustainable business model to fund it all and they don't have one imo.

They are essentially hoping they can fund their expenses by diluting Steem holders. The only way this could work absent a genuine revenue source is if it became widely adopted as a limited currency like BTC which is very unlikely given their initial distribution and it's huge inflation rate.  (Alternatively they are perhaps hoping they can make their SBD (Steem Dollar) very popular, which might create new independent demand, but again given the centralized nature of the Steem backing for it, it's unlikely to become trusted/popular either imo.)

[iamnotback]

Let's see if I can earn any money telling the truth on Steemit:

https://steemit.com/steem/@anonymint/lies-about-steem-and-steemit

Please consider upvoting me if you appreciate my effort. Lots effort has gone into this detailed analysis.

I hope @smooth upvotes me so he can show he was not overly biased by his large stake and thus showing the authorities he was not participating in misleading any investors. I would hope other whales have the similar conscience and rationality.

Of course I don't expect it to be upvoted.

[jwinterm]

Let's see if I can earn any money telling the truth on Steemit:

https://steemit.com/steem/@anonymint/lies-about-steem-and-steemit

Please consider upvoting me if you appreciate my effort. Lots effort has gone into this detailed analysis.

I hope @smooth upvotes me so he can show he was not overly biased by his large stake and thus showing the authorities he was not participating in misleading any investors. I would hope other whales have the similar conscience and rationality.

Dude, you're trying to criticise a system while at the same time reap rewards from it. Do you not sense a bit of the absurdity? Also, your pleas for upvote scraps come off kind of pathetic.

Plz guise gimme upvote in five min or you will be cursed with instaminer guilt for all eternity.

[iamnotback]

Dude, you're trying to criticise a system while at the same time reap rewards from it. Do you not sense a bit of the absurdity? Also, your pleas for upvote scraps come off kind of pathetic.

My point is to prove the ranking system is a circle-jerk and thus the system has no value.

I entirely expect to not get upvotes. I will be surprised if I do.

There is a difference between criticizing and stating facts. The facts I stated have been vetted by all of you here, as you had every chance to refute me during the discussion. I want to test if otherwise very smart people will reject and ignore facts.

Also perhaps you failed to notice, the first item is not a criticism against Steem but rather in support of it (except that Steem doesn't yet support community building).

P.S. I wasn't going to post again on Steem because I realize most of the whales have probably figured out that I am strongly leaning against supporting it. I realized I needed to compile all my recent analysis, and I might as well prove to myself that my assumption is correct that the system is a circle-jerk lying system.

[Febo]

Dude, you're trying to criticise a system while at the same time reap rewards from it. Do you not sense a bit of the absurdity? Also, your pleas for upvote scraps come off kind of pathetic.

My point is to prove the ranking system is a circle-jerk and thus the system has no value.

I entirely expect to not get upvotes. I will be surprised if I do.

There is a difference between criticizing and stating facts. The facts I stated have been vetted by all of you here, as you had every chance to refute me during the discussion.

I think you will get upvotes. 99% will nto have any ideas what you post but for them is only important your wroted not copied from somewhere.

Or maybe they will downvote since you used links to other post without their approval. lol   Steem is turning ugly right now. I mean with its essence not about crypto part.