Steem pyramid scheme revealed

[generalizethis]

One of my main concerns is that the system is not viable in the long run due to problematic reward scaling. In other words, if userbase goes 1000x to 70mn people, the marketcap must go to 1000x (that's 200 BILLION $) to keep up the rewards at current levels.

Why rewards should remain at the same levels as today? if userbase rises 1000x why should we also have 1000x more people earning thousands and hundrends of dollars per blog? I have not done any calculations but intuitively I don't think there is any problem with that, rewards are HUGELY overpriced right now.  

I don't disagree with the overpricing and part of the reason why payouts are high today is precisely because the reward pool is intended for a larger audience (as are the witness payouts - because the service provided right now is elemental from what some witnesses say).

But we have to remember payouts are high only for a very small number of authors. The others get peanuts. So the "peanuts effect" will go 1000x

I don't agree with your various statements about market cap entirely, but to the extent I do, I see this as an early adopter incentive, not very different from how mining usually works (blogging is considered a form of mining in Steem). It is often easier to mine more early on and this is by design, as an incentive to join a small network. With a larger network, less incentives are needed.

The problem is that even with the incentives offered at the level of our small-scale network (right now), most people bail. If the incentives don't work now, it is only logical to question how will they work when rewards are divided /100 or more? If the casino-effect (1/37) tends more to lottery effect (1/xxxxx), it simply won't work. I don't know - it seems clear as day to me.

Of those people who bail, how many are original content creators?

Will advertisers bid for a blogger's following, perhaps buy them outright?

Will content creators create content for advertisers (this assumes advertisers establish themselves as a pressence)?

[ngenko]

Like any pyramid, it will fail at some point, and there will be again bad press about the technology.

so bad!!!

[AlexGR]

One of my main concerns is that the system is not viable in the long run due to problematic reward scaling. In other words, if userbase goes 1000x to 70mn people, the marketcap must go to 1000x (that's 200 BILLION $) to keep up the rewards at current levels.

Why rewards should remain at the same levels as today? if userbase rises 1000x why should we also have 1000x more people earning thousands and hundrends of dollars per blog? I have not done any calculations but intuitively I don't think there is any problem with that, rewards are HUGELY overpriced right now.  

I don't disagree with the overpricing and part of the reason why payouts are high today is precisely because the reward pool is intended for a larger audience (as are the witness payouts - because the service provided right now is elemental from what some witnesses say).

But we have to remember payouts are high only for a very small number of authors. The others get peanuts. So the "peanuts effect" will go 1000x

I don't agree with your various statements about market cap entirely, but to the extent I do, I see this as an early adopter incentive, not very different from how mining usually works (blogging is considered a form of mining in Steem). It is often easier to mine more early on and this is by design, as an incentive to join a small network. With a larger network, less incentives are needed.

The problem is that even with the incentives offered at the level of our small-scale network (right now), most people bail. If the incentives don't work now, it is only logical to question how will they work when rewards are divided /100 or more? If the casino-effect (1/37) tends more to lottery effect (1/xxxxx), it simply won't work. I don't know - it seems clear as day to me.

Of those people who bail, how many are original content creators?

Even a genuine comment can be original content creation. So it's hard to quantify (and I don't even have the metrics to do so)...

Will advertisers bid for a blogger's following, perhaps buy them outright?

Will content creators create content for advertisers (this assumes advertisers establish themselves as a pressence)?

For the time being the assumption is no ads, so...

[generalizethis]

One of my main concerns is that the system is not viable in the long run due to problematic reward scaling. In other words, if userbase goes 1000x to 70mn people, the marketcap must go to 1000x (that's 200 BILLION $) to keep up the rewards at current levels.

Why rewards should remain at the same levels as today? if userbase rises 1000x why should we also have 1000x more people earning thousands and hundrends of dollars per blog? I have not done any calculations but intuitively I don't think there is any problem with that, rewards are HUGELY overpriced right now.  

I don't disagree with the overpricing and part of the reason why payouts are high today is precisely because the reward pool is intended for a larger audience (as are the witness payouts - because the service provided right now is elemental from what some witnesses say).

But we have to remember payouts are high only for a very small number of authors. The others get peanuts. So the "peanuts effect" will go 1000x

I don't agree with your various statements about market cap entirely, but to the extent I do, I see this as an early adopter incentive, not very different from how mining usually works (blogging is considered a form of mining in Steem). It is often easier to mine more early on and this is by design, as an incentive to join a small network. With a larger network, less incentives are needed.

The problem is that even with the incentives offered at the level of our small-scale network (right now), most people bail. If the incentives don't work now, it is only logical to question how will they work when rewards are divided /100 or more? If the casino-effect (1/37) tends more to lottery effect (1/xxxxx), it simply won't work. I don't know - it seems clear as day to me.

Of those people who bail, how many are original content creators?

Even a genuine comment can be original content creation. So it's hard to quantify (and I don't even have the metrics to do so)...

Will advertisers bid for a blogger's following, perhaps buy them outright?

Will content creators create content for advertisers (this assumes advertisers establish themselves as a pressence)?

For the time being the assumption is no ads, so...

I'd assume original content would be content that has been augmented in a large degree so it serves another purpose (who can rely-on/define novelty?), or that actually has expressed something that has never been expressed before (the former creative and sometimes unique, the latter genius and art--which of course has the former by necessity).

When I say advertiser's presence, I mean (for the most part) something akin to a facebook page, but in steemit's case it would be a dedicated blogger/avatar--this is what I'm waiting/watching for.

[Zer0Sum]

http://marketingland.com/entered-post-com-era-content-marketing-174732

The days of standalone blogger web sites are coming to an end...
Only large media companies will continue to maintain content portals.

Since Steemit can't seriously compete with Medium/Facebook...
This is a great opportunity to consolidate the relatively small crypto-anarchist-gold-armageddon space...
And make deals to host any applicable material on a non-exclusive basis to provide writers with an additional revenue stream.

There are pros that do this type of marketing for a living... hire some good ones.

Also, having curated maybe 200 submissions, I would say at most 10-20% are time-sensitive...
So Steemit needs a Long Tail algo whereby a writer's library can accumulate revenue for months/years.

[smooth]

One of my main concerns is that the system is not viable in the long run due to problematic reward scaling. In other words, if userbase goes 1000x to 70mn people, the marketcap must go to 1000x (that's 200 BILLION $) to keep up the rewards at current levels.

Why rewards should remain at the same levels as today? if userbase rises 1000x why should we also have 1000x more people earning thousands and hundrends of dollars per blog? I have not done any calculations but intuitively I don't think there is any problem with that, rewards are HUGELY overpriced right now.   

I don't disagree with the overpricing and part of the reason why payouts are high today is precisely because the reward pool is intended for a larger audience (as are the witness payouts - because the service provided right now is elemental from what some witnesses say).

But we have to remember payouts are high only for a very small number of authors. The others get peanuts. So the "peanuts effect" will go 1000x

I don't agree with your various statements about market cap entirely, but to the extent I do, I see this as an early adopter incentive, not very different from how mining usually works (blogging is considered a form of mining in Steem). It is often easier to mine more early on and this is by design, as an incentive to join a small network. With a larger network, less incentives are needed.

The problem is that even with the incentives offered at the level of our small-scale network (right now), most people bail. If the incentives don't work now, it is only logical to question how will they work when rewards are divided /100 or more? If the casino-effect (1/37) tends more to lottery effect (1/xxxxx), it simply won't work. I don't know - it seems clear as day to me.

How many people are actually signing up (and then bailing)?

I still believe rather strongly that most of the signups are scammers. I believe this more strongly after looking at the account names being created. Steemit is paying $3 per account, but they are paying a lot more than that per actual user. That may also be a problem.

It is on my agenda to analyze the blockchain to come up with better metrics for things like people starting to blog and then quitting.

Most people can't blog, and never will be able to blog, and never will earn a lot under any reasonably conceivable system, but the successful bloggers who have joined don't seem to quit, and as long as they are still blogging, their readers are still reading. That may be partially a function of unsustainable early adopter rewards though.

[AlexGR]

I'd assume original content would be content that has been augmented in a large degree so it serves another purpose (who can rely-on/define novelty?), or that actually has expressed something that has never been expressed before (the former creative and sometimes unique, the latter genius and art--which of course has the former by necessity).

In a way, each human is a unique prism which refracts light in a different way, and thus is always able to generate original content. But in the context of the platform, the use of original content is more about avoiding ...copy/paste from others, from news sites, etc etc.

When I say advertiser's presence, I mean (for the most part) something akin to a facebook page, but in steemit's case it would be a dedicated blogger/avatar--this is what I'm waiting/watching for.

..aha..

One of my main concerns is that the system is not viable in the long run due to problematic reward scaling. In other words, if userbase goes 1000x to 70mn people, the marketcap must go to 1000x (that's 200 BILLION $) to keep up the rewards at current levels.

Why rewards should remain at the same levels as today? if userbase rises 1000x why should we also have 1000x more people earning thousands and hundrends of dollars per blog? I have not done any calculations but intuitively I don't think there is any problem with that, rewards are HUGELY overpriced right now.   

I don't disagree with the overpricing and part of the reason why payouts are high today is precisely because the reward pool is intended for a larger audience (as are the witness payouts - because the service provided right now is elemental from what some witnesses say).

But we have to remember payouts are high only for a very small number of authors. The others get peanuts. So the "peanuts effect" will go 1000x

I don't agree with your various statements about market cap entirely, but to the extent I do, I see this as an early adopter incentive, not very different from how mining usually works (blogging is considered a form of mining in Steem). It is often easier to mine more early on and this is by design, as an incentive to join a small network. With a larger network, less incentives are needed.

The problem is that even with the incentives offered at the level of our small-scale network (right now), most people bail. If the incentives don't work now, it is only logical to question how will they work when rewards are divided /100 or more? If the casino-effect (1/37) tends more to lottery effect (1/xxxxx), it simply won't work. I don't know - it seems clear as day to me.

How many people are actually signing up (and then bailing)?

I've seen some numbers cited from Anonymint and another guy who wrote an article and was citing anonymint - don't even remember the precise numbers but they weren't looking very good. The ratios were as far as I remember >60% and inactive accounts were a large percentage.

I still believe rather strongly that most of the signups are scammers. I believe this more strongly after looking at the account names being created.

Yeah the other day there was this ad (as a post inside steem) about one guy controlling 800 ids and growing, selling upvotes... who knows how many of them exist...

It is on my agenda to analyze the blockchain to come up with better metrics for things like people starting to blog and then quitting.

Bout time...

Most people can't blog, and never will be able to blog, and never will earn a lot under any reasonably conceivable system, but the successful bloggers who have joined don't seem to quit, and as long as they are still blogging, their readers are still reading. That may be partially a function of unsustainable early adopter rewards though.

Indeed most people won't. I'm not worried about them too much... I am more worried about those that can offer something and feel that it's not getting the attention ($$$) it should and that the system is broken or that inconsistent rewards+small payouts+non residual income (if bloggers multiply) is not worth it. We'll see how it goes... From my part I did what I had to: I proposed a system that can increase long-term viability by serving ads to non-registered members. (Registered / logged-in member experience doesn't change). I believe it'll be hard to come up with some kind of formula that is better than that. It's not a pressing issue, for sure, but it changes the market fundamentals if implemented.

[xtester]

An Open Letter To The Community: In Defense Of Inequality: https://steemit.com/steemit/@xtester/an-open-letter-to-the-community-in-defense-of-inequality

[DecentralizeEconomics]

If you let them, the Larimers and their associates will rob you blind.  Dump centralized social media.  Say NO to Steem!

Come join Synereo and be part of a REAL decentralized social network!

[r0ach]

The Chinese appear to be coming to game Steem's curation reward system:

I wonder what it is with Asians. They always like to cheat when it comes to money. They did the same with Stellar when they had a facebook giveaway. It is also the same in games of chance. All they do is try to cheat.

It's called group evolutionary strategy, when various ethnic groups operate with a hive mind for their own common interests.  The behavior is right out in the open for most sub-groups of Asians, Jews, and others, but if a common white person does it, the Marxist left claims it's racism.  It's probably the biggest double standard that exists on earth.  Kevin MacDonald is the most famous person to talk about it:

http://en.metapedia.org/wiki/Jewish_group_evolutionary_strategy

Socialism tends to be the destroyer of nations, but groups who operate like an insect, borg-collective tend to crowd others that don't out of the game.  The natural selection process seems designed to cull non-group think individuals and characteristics.  If you look at a zebra after all, they all look the same.  What good is a zebra with orange stripes?

So, yes libertarian anarchists, you are a special snowflake, but natural selection is inherently designed to get rid of you.  Fastest way to destroy a civilization or ethnic group?  Praise the benefits of anarchy and individual freedom to one group, while other rival groups operate as collectivists.  Then they come in and steamroll you while you can provide zero resistance against them.  That's the hilarious part about anarchy, it only works if everyone agrees to do it.

[FandangledGizmo]

Like any pyramid, it will fail at some point, and there will be again bad press about the technology. so bad!!!

Sorry for anyone that fell for it. I and most others did try to warn people about it when it was at an all time high...

As the founder of Steem said...

Only 0.47% of STEEM is liquid in individual accounts, this is going to make the pump on CMC legend... wait-for-it... dary!

https://bitsharestalk.org/index.php/topic,22125.msg288854.html#msg288854

So it's just a case of alt-coiners not knowing how to value companies and chasing a very tiny % of the total supply.

It looks like it was just a single massive pump due to a tiny percentage of supply on the market.  

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.)

Synereo on the other hand for example does have a business model. A social media site, where the majority of advertising revenue goes to the users in return for consuming advertising content. So that has the potential to be a lucrative, sustainable business model and Facebook killer.

The minute speculators stop buying Steem it may collapse because there is no business model or revenue source only the hope speculators will value a site attracting users and not use common sense.

Steem speculators have lost >65% in a little over a month since those posts (While others have made 400% in the same month on Synereo which has the potential to be a viable.)

[criptix]

So who lost how much and who could profit and sold at the top?

Steem is near dollar parity now from a high of 4+$?

[iamnotback]

Doing my part to put some high quality content on Steemit:

https://steemit.com/relationships/@anonymint/monogamy-is-an-evolutionary-strategy

I felt compelled to react to that blog Monogamy is a Lie!.

[iamnotback]

Sorry but the Steemit culture makes me want to vomit:

I must come from a different generation than you, because so many of us had dysfunctional family lives, but it doesn't mean we should go crying about our past in a blog post. It sounds so damn feminine. In my world, suck it up and be a man. It is so weak and pitiful to still be talking about our past family problems when we are an adult and especially in a public broadcast.

Is Steemit become a back slapping fuck fest for whining our dysfunctional pasts. It just feels so circle-jerk around here. I don't think the entire world comes from the dysfunctional families that we have in our decadent Western cultures, so I don't think Steemit is going to be reaching out to the world with these memes.

[skysblu]

Like any pyramid, it will fail at some point, and there will be again bad press about the technology.

so bad!!!

i hope that it is not true, in my opinion steem should have a bright future and it will make me some good profit

[iamnotback]

It is on my agenda to analyze the blockchain to come up with better metrics for things like people starting to blog and then quitting.

Most people can't blog, and never will be able to blog, and never will earn a lot under any reasonably conceivable system, but the successful bloggers who have joined don't seem to quit, and as long as they are still blogging, their readers are still reading. That may be partially a function of unsustainable early adopter rewards though.

Smooth if you look anything like your avatar man...

...we're going find a popular activity for this concept of onboarding.

Hey r0ach, Vitalik has been sneaking into McHammer concerts:

https://youtu.be/LkUkDE9mCxA?t=162

[AlexGR]

Sorry but the Steemit culture makes me want to vomit:

I don't think there's something like a uniform steemit culture. Everyone writes their own stuff. Does this represent the whole? Of course not.

[iamnotback]

Sorry but the Steemit culture makes me want to vomit:

I don't think there's something like a uniform steemit culture. Everyone writes their own stuff. Does this represent the whole? Of course not.

I am talking about what gets upvoted to large payouts, is a lot of weak ass shit.

And somebody was offended because they wasted their fucking life compiling garbage:

Ah your academic bullshit is why we computer programmers (not the scientist variety, but the actual doers) are changing the world, while you stroke your feminist agenda propaganda dick. As Einstein is quoted, "If the facts don't fit the [feminist, emasculating] theory, change [reinterpret] the facts."

Consider my reply to @jimmco. The logic presented isn't exclusive of other complex anthropological interplay. It seems someone got offended that their field of expertise wasn't being claimed by a "non-expert".

The time scales required to falsify evolution are too great to argue for any non-archaeological evidence. We must reason about our experiences and what seems to make sense.

Regarding the book you cited which apparently discusses cultures which reared children as chattel and even though I haven't read the book, this seems to be orthogonal to the logic I presented in this blog post. These cultures have developed around the economics of oversupply of labor in agrarian societies. Remember before the Black Death, Europe also had an oversupply of labor and people were treated as slaves.

I realize you were responding more on the claim of falsifiable evolutionary relevance, and you may be correct that there is none but you can't prove it. It may just be a short-term strategy which fizzles out without any evolutionary impact. Yet I will still argue it is an attempt at a strategy for maximizing hereditary impact. You will observe in those societies which treat children as chattel, the women are often also treated as possessions of their husband. Again this appears to be an evolutionary strategy of beta-males.

Yet we could also reason that is might just as well be a practical strategy of how cope with an agrarian lifestyle, where one needs a reliable female to maintain the household chores and watch over the children. So in that respect we could argue it might have nothing or much less to do with evolutionary impact, and more to do with practically how to produce the most. Yet even that is an evolutionary strategy to survive, thrive, and produce offspring.

whatever (admittedly meager) evidence we have points in the opposite direction

Aliasing error is not pointing any where. There are plethora of strategies being applied in nature, and mapping these out with some repeatable scientific test is I think basically impossible. All we have is conjecture. The relevant strategies may be changing (due to the environmental conditions changing, e.g. the end of the agrarian and industrial ages) faster than any evidence could support them.

[oceanriver]

Like any pyramid, it will fail at some point, and there will be again bad press about the technology.

so bad!!!

it should fail if it was a pyramid scheme, however it is definitely not it is a legit cryptocurrency that is going to be around for a really long time

[AlexGR]

Sorry but the Steemit culture makes me want to vomit:

I don't think there's something like a uniform steemit culture. Everyone writes their own stuff. Does this represent the whole? Of course not.

I am talking about what gets upvoted to large payouts, is a lot of weak ass shit.

Someone wrote about monogamy, you wrote something else about it, both got paid good. It wasn't thaaaat one-sided.