Steem pyramid scheme revealed

[iamnotback]

The vesting fund is currently 96.7% of the total supply, well over the 90% that would make the SP debasement rate zero.

So assuming 100% yearly dilution of the money supply, the debasement of SP holders is less than 5% yearly (0.967 - (1.867 ÷ 2)) ÷ 0.976 + factor for SP created and powered up.

At the current 300% rate (dropping fast every month), debasement of SP holders will end up perhaps ~10% for the year. Still not very much, and much less than the price volatility.

Also note that the 100% per year inflation is only reached at some point in the future. As with all coins with a relatively flat distribution schedule (fixed amount distributed per block), the inflation rate is reduced over time as the total supply increases. For now it is well over 100%, meaning the SP debasement is also higher. I read 300% recently but I don't know if that is correct.

You may have read that 300+% on my blog post (which had incorrect mathematical assumption of 90% compounding unless that is most of the STEEM was not powered up, which isn't the case). Indeed I was writing about the eventual scenario, and yes debasement is higher than 100% for several more months.

[iamnotback]

I am thinking that Steem/Steemit made a mistake to do their client-server data transfer via WebSockets instead of REST.

They appear to have designed for a real-time update scenario, but this will come at the cost scalability (because WebSockets can't be cached upstream), and afaics the real-time updates are entirely unnecessary for the feature set of this type of site. This isn't chat and blog commenting shouldn't be used a real-time interactive chat.

I don't think Steem could scale technically to a million users as it currently is designed. Certainly not 100 million users.

That doesn't mean they couldn't do some redesign along the way, but the existing paradigm is gaining inertia that will be difficult to turn quickly, e.g. the new Steemit mobile app. And the design choice they made is baked into many design decisions, such as that comments and blog posts are editable many hours after posting.

[r0ach]

I am thinking that Steem/Steemit made a mistake to do their client-server data transfer via WebSockets instead of REST.

Did you read my last post a few lines up?  Who gives a shit about that when it's a centrally moderated website that just randomly deletes posts at will.  There is no point at all of having a blockchain associated with this.  A blockchain is for distributed consensus, not one guy pulling all the strings.

[iamnotback]

I am thinking that Steem/Steemit made a mistake to do their client-server data transfer via WebSockets instead of REST.

Did you read my last post a few lines up?  Who gives a shit about that when it's a centrally moderated website that just randomly deletes posts at will.  There is no point at all of having a blockchain associated with this.  A blockchain is for distributed consensus, not one guy pulling all the strings.

Steemit.com can do that, but other UIs can get the data from the blockchain and display it.

I suppose if the 19 witness colluded it is plausible data could be deleted from the blockchain, but other nodes that had seen that data might detect it. If anything shady happened to your blog post, it might have been the way Steemit.com is ranking the blogs (I no longer see a direct correlation to reward in any of the ranking choices at Steemit). More likely they are experimenting with randomizing or heuristics and your post might have been an unintentional collateral damage.

[r0ach]

I am thinking that Steem/Steemit made a mistake to do their client-server data transfer via WebSockets instead of REST.

Did you read my last post a few lines up?  Who gives a shit about that when it's a centrally moderated website that just randomly deletes posts at will.  There is no point at all of having a blockchain associated with this.  A blockchain is for distributed consensus, not one guy pulling all the strings.

Steemit.com can do that, but other UIs can get the data from the blockchain and display it.

Yes, I'm aware of that, but the fact that Steemit is run by Dan and he's already using such Orwellian censorship on completely valid topics means this thing is doomed.

[smooth]

LOL, OK, this Steemit thing is now a complete joke to me.  I had a post with politics tag that was at $0.04 with 12 upvotes or so.  There were no downvotes and no "down flags" on the post

In its infinite wisdom steemit decided to remove the display of downvotes/flags from the web site. You can still see them on steamed.com. If I have time I'm planning to fork the UI and remove that misfeature and a few others, although I don't plan to run a public web site so it won't help anyone else unless someone runs it publicly (it'll be on my github).

There is no central moderation as far as I know, just some dude down voted it probably because he disagreed with your politics.

[Azael]

Can somebody tell me if you make $5,000 on Steemit when can you actually cash that out?



People always mumble when I ask them that...

[smooth]

Can somebody tell me if you make $5,000 on Steemit when can you actually cash that out?

People always mumble when I ask them that...

75% of the post value goes to the author. 25% goes to the voters.

Of the portion going to the author, half is in Steem Dollars and can be immediately cashed out. Half is in Steem Power which takes two years to cash out (but many users are not even trying to cash them out at this point).

So for a $5000 post, about $3750 would go to the author and of that $1875 could be immediately cashed out. Currently Steem Dollars are trading below par which reduces the value somewhat more, but still probably something like $1500 or more could be in your pocket as fast as it takes to trade the crypto and cash out the Bitcoin.

I hope that didn't constitute mumbling.

[iamnotback]

Let's see if any whales will upvote the objective truth or not:

The first one is the growth rate. Presently, Steemit has ~43,331 registered accounts and has grown with ~10000 new accounts during the last week(an impressive ~31,25 %)

This is a misleading interpretation of the data, because you are not accounting for the abandonment (attrition) rate of new signups.

The data clearly shows that users active in the most recent 7 days are overall 15024 ÷ 43766 = 34% thus ~66% rate of attrition. I computed the attrition rate another way to be roughly 78% (which has now increased to (15,024 - 9479) ÷ (43,766 - 9479) = 84%!) before the recent surge of signups partially due to renewed+amplified coinmarketcap.com banner ad. Meaning that when the signup rate is significantly higher than the historic rate and the historic number of user accounts is small, then mathematically the attrition rate (in the first way I calculated it above, but not in the second way) will appear to be less than it actually is until that higher rate of signups is aged about 30 days.

I expected that my second method of computing the attrition rate would increase (as it did from 78% to 84%), because the attrition rate requires at least 30 days of history to compute accurately and the signup rate had surged in July. I expect the attrition rate to be about 87 - 94%, because this is the percentage of users who have balances less than $70. As you can see this correlates well with the attrition rate, because the entire motivation for joining Steem is to earn a lot of money. There are not other compelling reasons to be on the site. The white paper admits that quadratic vote power weighting algorithm is designed to fool users into overestimating their earning potential, so it is quite a “no brainer” to expect that most will become disappointed and quit (barring other compelling reasons for them to stay, which there are currently none other than some idealistic desire for blockchain and crypto-currency technology to gain a foothold with the masses).

This perspective is further supported by noticing from the data that the rate of attrition increases the lower the balance.

The attrition rate will approach 98% if the price declines by 90% (because that is the percentage of accounts which will have balances less than $70), which is what I expect for the coming implosion of Steem as the reality of the situation comes to roost and users power down in rush to the exits (most are powering up now because they don't realize the true situation).

Note I have confirmed some examples here and here of who and why users are abandoning Steem.

[AlexGR]

Quality vs relevance

https://steemit.com/steemit/@alexgr/if-you-think-about-it-it-s-not-quality-that-matters-but-relevance

[iamnotback]

Quality vs relevance

https://steemit.com/steemit/@alexgr/if-you-think-about-it-it-s-not-quality-that-matters-but-relevance

I didn't read your blog yet, but I agree it is all about relevance. And that is the other killer feature I am adding that Steem (the blockchain) doesn't have. Open sourcing the UI won't solve their problems.

[smooth]

Let's see if any whales will upvote the objective truth or not:

The first one is the growth rate. Presently, Steemit has ~43,331 registered accounts and has grown with ~10000 new accounts during the last week(an impressive ~31,25 %)

This is a misleading interpretation of the data, because you are not accounting for the abandonment (attrition) rate of new signups.

In my opinion the best way to assess the overall trend is this:

http://www.alexa.com/siteinfo/steemit.com (link may not work; if not then type in steemit.com when you get redirected to a query page)

Internal statistics are highly skewed by things like low level scammers mining $10 free accounts. But as long as web traffic is increasing and engagement statistics are relatively constant then we know the (non-attritted; active) user base is growing.

The alexa stats currently show a slowing of growth recently but still a high overall growth rate. The ranking has dropped from 50K+ to 20K over the course of a couple of weeks.

This approach will of course need to be replaced if alternate web site and/or clients take hold, but that hasn't happened yet.

[AlexGR]

Quality vs relevance

https://steemit.com/steemit/@alexgr/if-you-think-about-it-it-s-not-quality-that-matters-but-relevance

I didn't read your blog yet, but I agree it is all about relevance. And that is the other killer feature I am adding that Steem (the blockchain) doesn't have. Open sourcing the UI won't solve their problems.

I think it'll go something like duct-tape-it-till-you-make-it

[smooth]

I was curious and tried to sign in (no facebook, nor reddit) and registred my email... however it makes almost 1 week and have still not receive anything back... What should I do to get an account?

Furthermore having to compile the miner... what is this?

very strange.

There are currently no email signups. You can either use Facebook, Reddit, PM me for a paid account, get mining working and mine yourself an account, or wait for other signup methods.

[iamnotback]

smooth I have a rebuttal to your Alexa point coming as a blog post.

In order to elucidate it clearly, I had to put some effort into collecting various charts, etc., so might as well put it on Steemit.

I hope you'll appreciate my effort, since you have the most to gain by knowing if you should be cashing out or not. You could probably do a deal with those Chinese who want to buy more, by selling some of your STEEM POWER at a discount before it is too late. I am doing you a massive favor and also will be providing a similar (but much better!) project to move your capital to which will be sustainable (and may also be work for you if you still want to be a programmer which I doubt). I think you would love to get behind something better and fairly launched. Then you would have nothing holding you back.

Hopefully you mined STEEM POWER to multiple accounts, so that you can sell individual accounts separately. If you didn't, this was an unfortunate lack of foresight.

[r0ach]

probably something like $1500 or more could be in your pocket as fast as it takes to trade the crypto and cash out the Bitcoin.

We shall place this quote on a granite tablet at the nation's capital to immortalize Smooth's review of Steem.

[smooth]

[sell] before it is too late.

Does this remind anyone besides me of the wall observer thread?

[AlexGR]

[sell] before it is too late.

Does this remind anyone besides me of the wall observer thread?

Only thing missing is Lambie with his ponies

[iamnotback]

[sell] before it is too late.

Does this remind anyone besides me of the wall observer thread?

Do you mean where I urged rpietila to stop leading n00bs to double-down at $700 and when I said it would decline to $150 and it did?

And I wasn't writing at that time that Bitcoin had no future. I am coming to the view about now, that Steem has no future.

Smooth much better if you don't cash any out and buy more STEEM POWER. Why not put your $ where your confidence is? All or nothing and you'd have some big balls.

Moreover, why don't you buy any? As far as I know, you've never bought any significant amount of STEEM POWER. It was all "gifted" to you (okay some effort to research and mine it, also to build your reputation which made you a good asset for them to coddle).

[smooth]

[sell] before it is too late.

Does this remind anyone besides me of the wall observer thread?

Do you mean where I urged rpietila to stop leading n00bs to double-down at $700 and when I said it would decline to $150 and it did?

And that I wasn't saying that Bitcoin had no future. I am saying that Steem has no future.

No you weren't but some do and stylistically it is very similar. Substance may be different, or not.

Smooth much better if you don't cash any out and buy more STEEM POWER. Why not put your $ where your confidence is?

I'll consider it

Anyway, I never claimed Steem is perfect nor that it will clearly succeed, but it does have a big first mover advantage, isn't terrible, has decent size user base for a crypto (even factoring in the large number of scammer accounts) and is still growing. Thus, I don't think it is certainly doomed. Uncertainty prevails.

Moreover, why don't you buy any? As far as I know, you've never bought any significant amount of STEEM POWER. It was all gifted to you.

I have bought what I would consider to be a lot of STEEM as part of various trading strategies. I'm not just plainly dumping it. And FWIW, I just powered up 10K STEEM two days ago, but I'm not going to claim that is a massive increase to my investment. As I said earlier, I already have plenty, and increasing significantly from here would be a bad call even if I think it is moon-worthy.

Nothing was gifted to me either (the same can not be said necessarily of others who could have been tipped off, but I certainly wasn't). I may have found it lying around on a forum, but to be clear I did risk significant time and resources mining it. I made the decision to do that after evaluating the prospects and I wouldn't have done so had I found it to have no chance of success.