Steem pyramid scheme revealed

[AlexGR]

However, as a marketcap, the situation is different. In my view, as far as cryptocurrencies go, there is nothing that can convince me that Ethereum is more useful than Steem. I can't see any reason whatsoever on why Ethereum should have a marketcap multiple times higher than Steem. Of course there are big institutional whales behind it, which is THE reason, but the fundamentals regarding its actual use cannot compare with Steem - which has actual, real life use. Either Ethereum should crash, or Steem should go higher. The price is not reflecting the fundamentals which should be reversed. Steem should have a higher marketcap than ETH - no matter how that is achieved.

EXACTLY this.  Speculation is the only reason why many blockchains have any value at all.  For the sake of crypto, I hope Steem can fix it's current model and develop into a successful project.

Ethereum (Classic) is estimated to have higher speculation upside for numerous reasons.

• Another DAO is waiting to happen because it is a programmable blockchain.
• You don't need to lockup your investment for 1 year weighted average cashout in order to speculate.
• You don't have this massive inflation.
• There is a plan to move to some form of PoS and stop or significantly reduce inflation.
• Everyone who runs Dapps needs ETH to play.
• Charles Hoskinson is involved again.
• Etc...

Sorry the utility of Steem for social blogging while it looks pretty on the screen (and it captured the interest of some females and those one or two degrees removed from the male cryptonerd), just doesn't even compare at all for a speculation vehicle.

Price speculation is one part, but there are also the fundamentals. What's the ETC use in the real world? What is its network effect? What about ETH-dominating-the-market uncertainties ? What about uncertainties that other smart-contract platforms will do what ETH/ETC can't effectively do without creating multiple clusterfucks?

Of course we can "speculate" that one day ETC might be useful for something, but STEEM is already proving its usefulness *right now*. People are writing, people are getting paid *right now*. The speculation regarding STEEM is not whether it'll ever be useful for something, but how much it will scale.

ETC has a marketcap 2.5x compared to STEEM and nobody knows if it will ever be used.

Yes, we can say ETC (and ETH) are much more speculative. But the fundamentals will eventually catch up. Not necessarily through the price of STEEM going through the roof, but through a combination of a large number of coins x a small value, producing a high marketcap. That's also the bottom line for SP holders. If price per STEEM goes down 2 times and their SP goes up 4 times, they are in the green.

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[snowflake43]

EXACTLY this.  Speculation is the only reason why many blockchains have any value at all.  For the sake of crypto, I hope Steem can fix it's current model and develop into a successful project.

My thought exactly. Steem is not attractive at all for traders because of the insane printing. Steem market is not healthy as volume shows.

[snowflake43]

Smooth, I am addressing this question at you since you are a witness and seem to be knowledgable about steemit.

Why is 300% - 100% yearly inflation necessary when the actual inflation needed to reward content and miners is about 10% per year?

I wrote a post about this here https://steemit.com/steemit/@snowflake/5a2p2k-why-not-inflate-steem-by-only-10-or-whatever-reward-pool-is-instead-of-having-this-crazy-printing-going-on

If anyone else has an answer I'm all ears and yes I have already read the whitepaper.

[smooth]

Smooth, I am addressing this question at you since you are a witness and seem to be knowledgable about steemit.

Why is 300% - 100% yearly inflation necessary when the actual inflation needed to reward content and miners is about 10% per year?

I wrote a post about this here https://steemit.com/steemit/@snowflake/5a2p2k-why-not-inflate-steem-by-only-10-or-whatever-reward-pool-is-instead-of-having-this-crazy-printing-going-on

If anyone else has an answer I'm all ears and yes I have already read the whitepaper.

The main reason is probably to incentivize locking up coins in SP, which is is needed for a variety of security reasons including reputation but even double voting (if you can instantly move your coins from one account to another you can vote again with the second account).

If you do lock up your coins you don't suffer from the crazy inflation, so as I commented to iamnotback above, you can't really count both as disadvantages. Pick one or the other.

A much shorter luckup period would probably still solve most of the problems. I didn't design the thing

[snowflake43]

Smooth, I am addressing this question at you since you are a witness and seem to be knowledgable about steemit.

Why is 300% - 100% yearly inflation necessary when the actual inflation needed to reward content and miners is about 10% per year?

I wrote a post about this here https://steemit.com/steemit/@snowflake/5a2p2k-why-not-inflate-steem-by-only-10-or-whatever-reward-pool-is-instead-of-having-this-crazy-printing-going-on

If anyone else has an answer I'm all ears and yes I have already read the whitepaper.

The main reason is probably to incentivize locking up coins in SP, which is is needed for a variety of security reasons including reputation but even double voting (if you can instantly move your coins from one account to another you can vote again with the second account).

If you do lock up your coins you don't suffer from the crazy inflation, so as I commented to iamnotback above, you can't really count both as disadvantages. Pick one or the other.

A much shorter luckup period would probably still solve most of the problems. I didn't design the thing

The way I see it is that Steem Power is a tool to play the steemit game, to participate in the steemit economy, the more you have the more you can get. So there you have your incentive. I would gladly lock my steem if I know I will be getting more and most importantly if the price of steem is solid. People don't care about locking their coins if they are confident 2 years from now the price will be good.

Also as Dan said it is only a psychologic incentive because in reality you don't get any benefit from locking up your steem power. (not suffering from inflation is not a benefit)
To me it would be much better to allow investors/traders/speculators to be able to buy and hoard steem at 10% per year ( the fundamentals will probably make up for this inflation ) and everyone who want to earn more steem can convert to steem power.

The price of steem is an indicator to how many people the platform can handle, if the devs don't allow steem price to grow by having unecessary inflation then steem can't grow. Investors/speculators are seeing the short comings which is also why they don't invest.

I agree with you that the lock up period should be a lot shorter and I also think that the inflation should be the minimum possible which is around 10%. They could also increase curation reward to increase incentive to convert to steem power .

If you could bring this up to the dev I'd appreciate it. Im convinced that it would solve many issue that steem currently faces and will face in the future

[smooth]

Also as Dan said it is only a psychologic incentive because in reality you don't get any benefit from locking up your steem power. (not suffering from inflation is not a benefit)

I agree with this. But, still, you don't suffer from the inflation. So you have a position that is basically a fair bet on the platform like any other crypto token that isn't hyper-inflationary. A forced long-term position, but still a viable position potentially.

I'll definitely bring your idees to the attention of the devs if I ever have the opportunity to discuss this sort of thing with them. Understandably there isn't generally a large appetite for major changes, but the more their ideas are apparently rejected by the markets the more there could be some receptivity. Maybe (in fact there is often a tendency to dismiss short term price movements as not indicative of much of anything, and there is a lot of validity to that).

[snowflake43]

Also as Dan said it is only a psychologic incentive because in reality you don't get any benefit from locking up your steem power. (not suffering from inflation is not a benefit)

I agree with this. But, still, you don't suffer from the inflation. So you have a position that is basically a fair bet on the platform like any other crypto token that isn't hyper-inflationary. A forced long-term position, but still a viable position potentially.

I'll definitely bring your idees to the attention of the devs if I ever have the opportunity to discuss this sort of thing with them. Understandably there isn't generally a large appetite for major changes, but the more their ideas are apparently rejected by the markets the more there could be some receptivity. Maybe (in fact there is often a tendency to dismiss short term price movements as not indicative of much of anything, and there is a lot of validity to that).

It is not a fair bet to traders because as you say it is a "forced" position, traders have to lock their steem and this is the worst thing for a speculators. There is no way to speculate on steem without getting hit by the inflation which is why traders are not buying it.

What matters to people is the value of their account, which is why I think the growing steem balance is not having the intended effect anyway, at least not for smart traders/investors.



>there isn't generally a large appetite for major changes

When the price hits 0.001$ they will probably reconsider, they will have nothing to lose at that point. A very low price is where we are heading and it's not going to go back up because many people have already powered down in anticipation to the next rise. That's what happens when you inflate a currency so much no one wants to hold it.


>I'll definitely bring your idees to the attention of the devs if I ever have the opportunity to discuss this sort of thing with them

Thank you

[AlexGR]

When the price hits 0.001$ they will probably reconsider, they will have nothing to lose at that point.

It's impossible that this wasn't already considered during the design. We are not given multiple hundreds per cent per year in SP for the lolz. If that happened (increasing SP), and if the price didn't drop, it would be a sure-bet where everyone simply multiplies their money, 300-400-500-600% per year.

The fact that in a year I'll have, say 20-25k SP instead of 5k, is an admission that the price will be diluted and the investor will be compensated with more SP.

They could have made it deflationary, in the sense that there is a fixed pool of shares and all users pay over a year 10% of their holdings in order to pay witnesses, content, etc. But then you'd have accounting issues with exchanges and people saying they lost coins. But it would be the same thing more-or-less, except for people's perception that "we are going doooooooownnnnnnn".

The current design isn't without problems either: I don't think the reverse split option in a couple of years will be without a hitch. Doesn't this create problems for investors, exchanges etc? You'd have to completely rename the token for all people to be (forced to get) in sync and don't do something stupid like thinking "oh price is unbelievable right now (after the reverse split), let's sell". But that's ahead of our time.

[smooth]

It is not a fair bet to traders because as you say it is a "forced" position, traders have to lock their steem and this is the worst thing for a speculators. There is no way to speculate on steem without getting hit by the inflation which is why traders are not buying it.

Fair is a loaded word. I was using it in a sort of specialized but value-neutral way to mean that it isn't being inflated/diluted away the liquid STEEM is. With a position in SP, if the platform gains in value as a whole (market cap), you investment will gain in value as well. That is not true of STEEM, where you also have to beat inflation (not impossible that this ever happens, especially short term, but certainly a lot harder).

I agree that locking it up makes this a less attractive play for many traders. One of the real obstacles that Steem has always faced is being structurally investor-unfriendly. This is especially true because, even though as SP investor you have voting rights, the SP is so concentrated with insiders that the voting rights to a new investor, even a fairly large one, are all but meaningless.

[Spoetnik]

Ever heard of Memory Coin ? 

[snowflake43]

They could have made it deflationary, in the sense that there is a fixed pool of shares and all users pay over a year 10% of their holdings in order to pay witnesses, content, etc. But then you'd have accounting issues with exchanges and people saying they lost coins. But it would be the same thing more-or-less, except for people's perception that "we are going doooooooownnnnnnn".

People wouldn't have the perception that we are going down because the 10% inflation comes from newly created coins. Nothing will be deducted from their balance. There won't be any accounting issues either. The steem balance would simply remain the same and the newly printed coin will go to miners and author rewards.

Basically you can achieve exactly the same thing but without the big inflation which is killing the price.

The current design isn't without problems either: I don't think the reverse split option in a couple of years will be without a hitch. Doesn't this create problems for investors, exchanges etc? You'd have to completely rename the token for all people to be (forced to get) in sync and don't do something stupid like thinking "oh price is unbelievable right now (after the reverse split), let's sell". But that's ahead of our time.

The reverse split won't be needed for decades if ever if you only inflate steem by 10% or whatever the reward is.


They could make the system much more attractive to investors by simply stopping printing so many coins. If there was a real purpose for doing so I would understand but it seems they are shooting themselves in the foot with the insane inflation.

If the reason to issue so many new coins is to incentivize people to power up then there are much better of doing it, by reducing the lock period and by increasing curation rewards.

One thing I remember Ned said is that he wants people to be invested long term which is partly why they design the lock smart contract.
I want to say to Ned that the best way to make sure people are invested long term is if the design is sound and sustainable with the right incentives. Many others and I are wondering how the steem price will increase with such inflation. AlexGR you seem to think that as long as you get compensated for the price decline it's all good but you fail to recognize the importance of the price of steem. The price of steem is directly linked to the capacity of steemit to pay new bloggers, if the price keeps decreasing due to the inflation ( as we ve seen in the last month or two) then investors gets a signal that this platform has less and less money to pay for bloggers, so you will be sure they won't buy the currency.

[snowflake43]

It is not a fair bet to traders because as you say it is a "forced" position, traders have to lock their steem and this is the worst thing for a speculators. There is no way to speculate on steem without getting hit by the inflation which is why traders are not buying it.

This is especially true because, even though as SP investor you have voting rights, the SP is so concentrated with insiders that the voting rights to a new investor, even a fairly large one, are all but meaningless.

I don't see this as a problem at all. The main reason people buy steem power is for the curation reward. The more SP they have the more curation reward they get, so the system is working there. I understand what you mean though, people like to feel that their vote is worth more but this will be solved naturally if the price of steem increases.  

This is also why steem power should not be seen as an investment but just a way to increase your steem balance.


EDIT : Actually the main reason people buy steem power now is because they are told its the only way to invest in steemit without getting hit by the hyperinflation. 
And the main reason why people should buy steem power is the curation rewards.

[iamnotback]

Note still a looong ways from capturing the typical mainstream person who has no (even 2nd degree) relationship to crypto.

I'd speculate that 2nd degree connections are a good portion of the population as a whole...

I might agree except first we have to hurdle the problem that Steemit wasn't sticky with Asians (who live in Asia) and I believe ditto with Latin Americans, Africans in those regions. There is that one Chinese lady @sweetsssj who blogs daily.

Also Steemit wasn't sticky with the youth nor the middle-aged. The youth don't have the attention span for blogging (and that would to some extent include Asians, Latin Americans, and Africans since they are more childish and less sophisticated as evident by the TV programming). The middle-aged (e.g. myself) can't waste time on something not lucrative or important, unless it is for entertainment or philosophical.

Huge swaths of demographics that Steemit is a looong ways from.

Steemit is an ideological Millennials furball and not at all appealing to other cultures and demographics. Significantly appears to maybe be because the whales are Millennials (and the entire project is driven significantly by ideological memes), which is another reason I chose not to speak with @ned and which I think the project can never become globally mainstream (never put the Millennials in charge of anything!). That doesn't mean that @ned isn't somewhat smart and couldn't do good work, but put enough Millennials together and the groupthink is suffocating. Often @dantheman justifies his designs and actions with Millennials ideological furballs.

..., and certainly a huge portion of the population with any money to spend.

Well the Asians are going to have the most money to spend in aggregate, especially after 2020 as the West collapses. The hightech nerds in the West will still have money to spend, but the 2nd degree relations maybe not. Btw, if you need some convincing on this, check this out and realize that no one in the West will be earning more than about $2 - $3 per hour for any job that can be outsourced online (as the Western Sovereign Debt/Socialism collapse ensues in earnest 2017 - 2032):

http://www.virtualcoworker.com.ph/job-openings

When Duterte was in China this week to declare Philippines was saying goodbye to its subservient alliance with the USA, he announced telcom deals to upgrade Internet broadband in the Philippines. There are huge 10 story call/BPO centers being built all over Davao for example (and every city in the Philippines).

Asia doesn't have the entitlements, so taxes thus wages can remain low (and China's debt can written down unlike the West's debt which will increase forever until the socialists die) until full employment is attained for billions of Asians (then wages can rise faster for all skill levels). For example look at Singapore's medical system financing:

https://www.moh.gov.sg/content/moh_web/home/costs_and_financing/schemes_subsidies/financing_approach.html

Most people could count a few dozen to hundreds of "friends" and acquaintances to whom they could introduce a social platform if they wanted to (especially if doing so on existing social accounts). Square that and it is between 1000x and 50000x the number of directly involved crypto-heads. You don't really need to reach much beyond second degree, if the product is compelling enough to grab and hold interest once people are introduced to it (currently, Steem is not).

Oh yes, but I was speaking about Steem(it). Of course I believe this. Why do you think I still want to create a social media blockchain project. I know the potential is there and $300 million market cap is only chicken feed compared to what I think is plausible.

And you know this too. And that is why when you see the project that can realistically hit that potential (when you understand it and realize it, which may or may not correspond with launch or pre-launch), you are going to be mining or buying with both fists.

Even if these numbers are wrong (first degrees will have a lot of second degrees in common, for example; I don't know the numbers), reaching the second degree is a sort of proof-of-virality in a way that reaching the first degree is not.

I think you'd agree we need to see both 2nd-degree onboarding and stickiness. Seems Steem may have gotten some 2nd-degree from the hardest core proponents, but they weren't broadly sticky. I remember one guy said his son visited but didn't stick around. And @stellabelle brought her friends who brought friends, who I think were somewhat sticky due to some extreme ideological motivation, but that seemed to me be more representative of the observed meme that Steemit is an ideological Millennials furball and not at all appealing to other cultures and demographics.

The ideology of Western Millennials make us Gen X want to puke. And doesn't seem to be entirely culturally compatible to Asia, although there is a little bit of the idealism overlap, the hardworking Asians are much more pragmatic. Note however, that @sweetsssj... explained in her blogs that the Chinese youth are spoiled (one-child policy) and idealistic (Communism), so there is greater overlap than with for the example the Thais, Indonesians, Filipinos, Indians, Bangladesh, Cambodians who are not spoiled and focused on lifting themselves out of poverty.

I'd also speculate that Steem has not done very well in reaching the second degree, outside of some particular niche cases like professional bloggers recruiting each other to come and collect thousands of dollars per blog post when that was the case.

I observed similar as stated above.

You don't need to lockup your investment for 1 year weighted average cashout in order to speculate.
You don't have this massive inflation.

This is double counting. If you do lock up your investment then you don't have the massive inflation. Especially since liquid supply is now over 10%. SP are now effectively deflationary (though one risk is there is no guarantee that continues for any particular time into the future).

Disagree. The confluence of the two makes the prognosis for locking up dismal because there is no investment case, and not even any medium-term speculation case thus no liquidity.

IMO, we can't separate the two as you want to, because they are not orthogonal. They amplify each other negatively.

"Rube Goldberg", I kind of agree with and actual market remains questionable. I wouldn't say it is as clear from underlying principles that there is no market (as opposed to just a flawed/incomplete implementation and/or bad marketing), which in the case of Bitshares is something I argued with r0ach about way back in his Bitshares pumping days.

I think there is no market because there is no stickiness. And the reason is because the concept of earning money from blogging (or curating) is flawed as a mass adoption onboarding.

What I instead think you mean is that it showed there is a market for giving away easy money. And especially when you can wrap in a Millennial's ideological furball. Appealed directly to the cryptonerds and their first-degree relations, but not beyond that.

What Steem did show us is that mass onboarding crypto might work, but we've got to have the right formula and feature set. And it also showed us that locking up payouts builds loyalty. But locking up investors was really, really, really, really stupid. So there, I just told you one of my design changes. See I am for open source.

[snowflake43]

>And it also showed us that locking up payouts builds loyalty. But locking up investors was really, really, really, really stupid.

I agree.


>I think there is no market because there is no stickiness. And the reason is because the concept of earning money from blogging (or curating) is flawed as a mass adoption onboarding.

I don't think the concept is flawed, it's just that it shoudln't be advertised as a blogging site to make money. This is probably the biggest mistake they've made which they can still rectify.

Steemit should be a social media site just like facebook with options to make money. Basically like games on facebook . Steemit should be like a social media site with many funny ways to make real money ( blogging being one of them) but you could have surveys,games,helping people with questions,predictions markets,etc...


To me the main reason people leave the site is
-the price decline, users have less rewards than they were used too
-the non social friendly site, no friend suggestion,no way to PM people, UI is too basic with no social media option
- lack of ways to earn rewards/ there are some people who tried blogging but never received any rewards, those people should be able to find alternative ways to earn.
-

[smooth]

Note still a looong ways from capturing the typical mainstream person who has no (even 2nd degree) relationship to crypto.

I'd speculate that 2nd degree connections are a good portion of the population as a whole...

I might agree except first we have to hurdle the problem that Steemit wasn't sticky with Asians (who live in Asia) and I believe ditto with Latin Americans, Africans in those regions. There is that one Chinese lady @sweetsssj who blogs daily.

Also Steemit wasn't sticky with the youth nor the middle-aged. The youth don't have the attention span for blogging (and that would to some extent include Asians, Latin Americans, and Africans since they are more childish and less sophisticated as evident by the TV programming). The middle-aged (e.g. myself) can't waste time on something not lucrative or important, unless it is for entertainment or philosophical.

You could easily just simplify this to say that it is sticky nor appeals to almost no one at all!

I think you'd agree we need to see both 2nd-degree onboarding and stickiness. Seems Steem may have gotten some 2nd-degree from the hardest core proponents, but they weren't broadly sticky.

Absolutely I would agree.

You don't need to lockup your investment for 1 year weighted average cashout in order to speculate.
You don't have this massive inflation.

This is double counting. If you do lock up your investment then you don't have the massive inflation. Especially since liquid supply is now over 10%. SP are now effectively deflationary (though one risk is there is no guarantee that continues for any particular time into the future).

Disagree. The confluence of the two makes the prognosis for locking up dismal because there is no investment case, and not even any medium-term speculation case thus no liquidity.

Can't agree with you here. The issue with locking up is not inflation. It might be that the application is a bad idea, execution is poor, competitors are stronger, etc, but none of those reasons for not wanting to invest in something for 1-2+ years have anything to do with inflation.

The liquidity factor is also negligible in those terms, where you are willing to invest for years because you view the prospects are very good. (Take AlexGR for example, he seems reasonably positive about it longer term, and likely doesn't care that he has to be locked in for at last 1-2 years.) Plenty of people invest in privately-held businesses, real estate, etc. without liquidity. Hell, even very large investments in highly-raded traded public companies aren't really liquid.

But whether we agree or disagree on this point doesn't really matter, since we clearly agree that the blogging model that is the focus of Steemit today is not a good model to want to invest in longer term (or at all). Frankly I'm disappointed that Steemit ended up going in that direction because the white paper wasn't really blogging oriented. I think that seems to be what they got done on the web development side in time for their (likely rushed) launch, so it ended up going that way.

[smooth]

I don't think the concept is flawed, it's just that it shoudln't be advertised as a blogging site to make money. This is probably the biggest mistake they've made which they can still rectify.

Steemit should be a social media site just like facebook with options to make money. Basically like games on facebook . Steemit should be like a social media site with many funny ways to make real money ( blogging being one of them) but you could have surveys,games,helping people with questions,predictions markets,etc...

That would require more than just changing advertising  (which they have never really done to any significant degree anyway). It would require greatly changing the UI and the entire web application which is currently very blogging-oriented

That said, there are other people working on different applications to work on the same blockchain, so maybe one or more of those will get it more right. That is my biggest hope for any kind of recovery at this point.

To me the main reason people leave the site is
-the price decline, users have less rewards than they were used too
-the non social friendly site, no friend suggestion,no way to PM people, UI is too basic with no social media option
- lack of ways to earn rewards/ there are some people who tried blogging but never received any rewards, those people should be able to find alternative ways to earn.
-

Pretty much agree, in principle, although the growth stalled even before the rewards had dropped much, if at all, so I don't think that is a major factor. Not having alternatives to blogging is a major factor. They are coming though, just not from Steemit Inc.

[iamnotback]

I think there is no market because there is no stickiness. And the reason is because the concept of earning money from blogging (or curating) is flawed as a mass adoption onboarding.

I don't think the concept is flawed, it's just that it shoudln't be advertised as a blogging site to make money...Steemit should be a social media site just like facebook with options to make money.

That was the concept. So it is flawed.

You are suggesting changes to the concept, that retain some facets, such as you wish to retain the concept of earning money from doing more varied activities yet you didn't specify whether this is via voting or how it will be decided objectively who is paid and how much.

This is probably the biggest mistake they've made which they can still rectify.

You seem to contradict yourself. Are you claiming that advertising blogging for money is a mistake but advertising doing other activities for money is not? Or are you suggesting that advertising doing anything for money is a mistake and instead only the appeal of the activities should be promoted with the money making aspect de-emphasized?

Steemit should be a social media site just like facebook with options to make money. Basically like games on facebook . Steemit should be like a social media site with many funny ways to make real money ( blogging being one of them) but you could have surveys,games,helping people with questions,predictions markets,etc...

It seems you think that it should be fun in a myriad of activities and it should be about earning money for participating.

To me the main reason people leave the site is
-the price decline, users have less rewards than they were used too

So if the money made is not significant, then earning money as a theme fails.

But there is no way we can make a variant of Steem that pays millions of users significant money, as that would require 10% inflation on a $10 billion market cap. Yet there is an alternative, which is paying insignificant money that via investment appreciation becomes significant (and that is in my design but with another clever paradigm-shift twist).

Seems you haven't used your calculator before making your suggestions.

-the non social friendly site, no friend suggestion,no way to PM people, UI is too basic with no social media option

I agree emphatically!

- lack of ways to earn rewards/ there are some people who tried blogging but never received any rewards, those people should be able to find alternative ways to earn.

I also agree, but we also need to use our calculator and think realistically.

[iamnotback]

You don't need to lockup your investment for 1 year weighted average cashout in order to speculate.
You don't have this massive inflation.

This is double counting. If you do lock up your investment then you don't have the massive inflation. Especially since liquid supply is now over 10%. SP are now effectively deflationary (though one risk is there is no guarantee that continues for any particular time into the future).

Disagree. The confluence of the two makes the prognosis for locking up dismal because there is no investment case, and not even any medium-term speculation case thus no liquidity.

Can't agree with you here. The issue with locking up is not inflation.

There is a confluence because since inflation destroys the speculator who doesn't lockin, then there is no reliable liquidity for those who lockin. Thus the inflation does negatively impact the lockin investor.

Remember that when a Coasian barrier is applied to the Invisible Hand (of the free market), it can't do just one thing. Surely you are well aware that the no edict or forced action can ever do only the thing it purports to do.

It might be that the application is a bad idea, execution is poor, competitors are stronger, etc, but none of those reasons for not wanting to invest in something for 1-2+ years have anything to do with inflation.

That is mostly inapplicable to my point, except that a lack of speculation liquidity can also remove a reason to invest for 1 year while it is only a low. Typically altcoins collapse to a long valley low for a year or so, and then after bottom fishing accumulation they get a pump. But since you can't cash out on a pump, this is entirely impossible for Steem. See edicts can't do just one thing. There is a confluence of negative effects. Clearly you now understand you are incorrect on this.

The liquidity factor is also negligible in those terms, where you are willing to invest for years because you view the prospects are very good. (Take AlexGR for example, he seems reasonably positive about it longer term, and likely doesn't care that he has to be locked in for at last 1-2 years.) Plenty of people invest in privately-held businesses, real estate, etc. without liquidity. Hell, even very large investments in highly-raded traded public companies aren't really liquid.

You can't cite anecdotes to prove aggregate effects. If you want a competing anecdote then refer to the Steemit blog where that multimillionaire anti-virus software personality John McAfee said he invests in blockchains but not Steemit because there isn't enough liquidity.

But whether we agree or disagree on this point doesn't really matter, since we clearly agree that the blogging model that is the focus of Steemit today is not a good model to want to invest in longer term (or at all). Frankly I'm disappointed that Steemit ended up going in that direction because the white paper wasn't really blogging oriented. I think that seems to be what they got done on the web development side in time for their (likely rushed) launch, so it ended up going that way.

In theory the Steem blockchain could be used for other activities.

But I think it is not the blogging activity choice that is the fundamental problem. Rather it is the model of distributing payouts via voting, which is a fundamental aspect of Steem's blockchain (for now at least). And the necessary whale control over it, otherwise it would be Sybil attacked. It is a quagmire and in my estimation the odds of them finding a successful way forward is roughly 100-to-1.

[smooth]

That is mostly inapplicable to my point, except that a lack of speculation liquidity can also remove a reason to invest for 1 year while it is only a low. Typically altcoins collapse to a long valley low for a year or so, and then after bottom fishing accumulation they get a pump. But since you can't cash out on a pump, this is entirely impossible for Steem. See edicts can't do just one thing. There is a confluence of negative effects. Clearly you now understand you are incorrect on this.

It is also entirely irrelevant if you read what I wrote which is that you would invest for >1-2 years if you believe the platform to actually have potential to succeed. Not to play a pump after a year of bottom fishing accumulation. As a candidate for a pump, it is a poor investment, but that doesn't necessarily make it a poor investment unconditionally, if it actually works (big if).

You can't cite anecdotes to prove aggregate effects. If you want a competing anecdote then refer to the Steemit blog where that multimillionaire anti-virus software personality John McAfee said he invests in blockchains but not Steemit because there isn't enough liquidity.

Well I can tell you from my personal experience as like the 10th largest stakeholder or so, that whenever I've powered down I've had NO problem selling the coins (tens of thousands) at close to the market price. The liquidity is perfectly sufficient. This has been true at every price level, before during and after the big July pump.

I think some people might confuse this because the trading volume and standing orders are relatively small, but this ignores the fact that demand for liquidity is also low (since people can't be selling too many coins at one time). So it just balances out, with a smaller market volume.

I think what McAfee didn't like is that he wouldn't be allowed to sell (similar to your point about not being able to exit on a pump), but it is hard to say. Possibly he just looked at the exchange volume saw a low number and dismissed it based on that.

[iamnotback]

That said, there are other people working on different applications to work on the same blockchain, so maybe one or more of those will get it more right. That is my biggest hope for any kind of recovery at this point.

Other than payouts based on voting, what other compelling reason would drive adoption? What compelling features require a blockchain?

My answer is all about commerce. And that is all I will say about it for the moment.