Steem pyramid scheme revealed

[iamnotback]

I'll take a look into ur paper, just read ur comment, when u talk about puttin "the control in the hands of those who transact the most" it reminds me NEM with the proof of importance

Proof-of-importance is an obfuscation of proof-of-stake, because it doesn't burn transaction fees, so a cartel majority of stake holders (who thus can control which chain wins) could do as many transactions as they want, paying any transaction fees to themselves:

the POI algorithm, albeit unique, is not a huge amount different than a regular POS algorithm, the only difference being that it takes into consideration how many transactions you make.

If you think it can easily be cheated, well i guess all you need to do is move your funds across different accounts constantly.

Thanks for confirming it is just proof-of-stake with some weighting by the transaction graph. That is my read also:

http://nem.io/NEM_techRef.pdf#section.7

As for whether it's security could be gamed (leading to The DAO like failure), well I would argue that the risk is nonzero (given that anyone can make a lot of transactions) until it has been properly peer reviewed. You can't trust one guy to do this sort of analysis.

Additionally NEM's consensus ordering system has numerous other deficiencies that I don't have time to detail now. After my white paper is published, we can go into it. As to discuss it now, would basically require revealing much of my white paper before I am ready to.

[iamnotback]

if you think that Ned and Dan have complete control over STEEM, then perhaps you should check out: https://steemit.com/steem/@steemitguide/steemitguide-what-is-a-exactly-is-a-steem-witness-and-why-every-user-should-vote

Dan has some errors in that video (ironically/coincidentally yesterday I was viewing that video). Sorry he is wrong too often (where it matters significantly). Here is another example of where he is wrong:

https://bitcointalk.org/index.php?topic=1319681.msg16960504#msg16960504

Errors:

0:40 - "witness are under control of the shareholders". Incorrect. They can do whatever they want until they are replaced by an election.
0:45 - "actually more secure than Bitcoin". Incorrect. I explain why in my white paper.
0:48 - "proof-of-work is ... burn most money is most secure ... proof-of-stake ... is also a scarce resource". Incorrect.
1:40 - "all systems are vulnerable to 51% attack ... no such thing as avoiding 51% attack". Incorrect. PoS is economically vulnerable to double-spends, Bitcoin is not. I explain this in my white paper. Correct that all systems have some form of 51% attack, but PoS has additional 51% attack vectors.
2:10 - "where we get the advantage over proof-of-work is that the cost of acquiring the 51% is much higher in proof-of-stake". Incorrect. Much easier to borrow or rent 51% stake than to rent 51% of mining farms. The mining farms have too much at stake. The shareholders have nearly nothing-at-stake because of their shares being an undersupplied public good. Worse yet, it may be more profitable for the whales to double-spend and short, than to sell their stake straight up.
2:20 - "because DPoS uses deterministic manner of producing blocks, we don't have to rely on random chance". Incorrect. He fundamentally does not understand resiliency and liveness. I explain this in detail in my white paper. Thus he doesn't understand why Graphene will never scale up to the world. Dunning-Kruger-esque.
3:30 - "get non-linear growth in the ability to achieve things when you concentrate capital". Incorrect. He is touting the concentration of nodes to 110 witnesses as being some advantage, because he never figured out how to otherwise solve the propagation scaling issue that plagues an unbounded number of nodes. But it doesn't follow that a concentration, bounded, and permissioned, provides resiliency and liveness. He is conflating.

[iamnotback]

And Ned was on TV, have a look  
https://www.youtube.com/watch?v=_K5JXYajba4

In my opinion, he really did well in this interview.

[TonySon]

And Ned was on TV, have a look  
https://www.youtube.com/watch?v=_K5JXYajba4

In my opinion, he really did well in this interview.

I think so!

[TonySon]

Reddit CEO Caught Altering User Content, Something That Can't Happen With Steemit.  

https://steemit.com/steemit/@cylonmaker2053/reddit-ceo-caught-altering-user-content-something-that-can-t-happen-with-steemit

[profitgenerator212]

It's not a ponzi scheme, it's a socially funded blog system

• Steemit users get rewards for posting
• Steem holders/investors pay for it

Steem holders buy Steem for anticipation of future value, however this is not just pure speculation. In the future Steemit will have many more features just like facebook , even perhaps a sustainable advertising system.


Therefore I would classify STEEM as a social currency. In the future you can even built a financial system on it, like trading,  lending, and so on. A true P2P commerce with a social aspect to it. It will be sustainable.


It will be big, and it is true that today STEEM's value is largely speculative, in the future there will be a lot of value in it. So those that buy STEEM now, probably anticipate this.

This is how STEEM's economics work. I am an economic expert with 10+ years of experience in financial markets/ economics. I know what I am talking about.

https://steemit.com/@profitgenerator

[g3rszpi]

It's not a ponzi scheme, it's a socially funded blog system

• Steemit users get rewards for posting
• Steem holders/investors pay for it

IMO you are right on this one
I guess OPs problem is that the "devs" are holding the funds from what they are paying out. I see what he means by this topic, but i dont see any solution to keep the funds decentralized, since only this would resolve this problem. And this is clearly not a  ponzi/ pyramid scheme.

[iamnotback]

I already had the plan for Steem in 2014:

How does "new money"'s perception of the coin change if the inflation period is long? I mean, what benefits are there in the long inflation period for investors? How is growing economy of the coin dependent on the length of the inflation period?

Nobody loves inflation, but few people regard it as a horrendous evil to be avoided at any cost.   Normal people do not expect that a hoard of cash will keep its value, much less grow more valuable, by itself, over time.  And, for the good of the economy, they shouldn't "invest" in cash or other "dead" assets: they should use their intelligence to choose productive enterprises, and invest in them.  

Cryptocurrencies were meant to be means of payment; their repurposing as long-term investment has always been criticized by economists.

I think anonymint hit this nail on the head.  The issue is not inflation it's how the inflation is distributed.  Which is generally NOT to the people responsible for creating production (knowledge, workers, investors)

Any other ideas of how to scale a crypto-currency to beyond 10 million users within 3 years or less from launch?

Build it into a game that becomes a massive hit.

Note 'game' has a wider scope of context than what you might be thinking. For example, life is game.

Oh, poor little him!

Continue your fantasies please.

Sometimes I think out-of-the-box.

I am also a business angel, funding people's things ever since 2004.

And this produced how many million user products?

I have produced (one as a co-developer) three separate "million user" level products since 1980s. With a lot of goofing off vacation time in between (mea culpa).

Your stance is fundamentally incongruent with the open source movement. Open source projects will spawn more and more granularly (smaller teams) and stored capital and top-down organization will become more and more irrelevant.

This is a virtual new economy; we only need to click a button to make an investment. We don't need to travel across the world. And we don't need to invest everything in one thing or two things, thus we don't need to know all the answers before the questions can even be asked. Creativity spawns serendipitously not as planned (even my own work lately proves this is true, because I didn't plan all the ideas I discovered along the way).

Open source is the odds of large numbers.

"Given enough eye balls, all bugs are shallow"— Eric Raymond paraphrasing Linus Torvalds

"Given enough experiments, all possibilities are achievable"— Shelby Moore III paraphrasing Eric Raymond paraphrasing Linus Torvalds

Eric Raymond noted that is the only known positive-scaling law in software engineering, i.e. that efficiency improves the more autonomous N actors involved. Design by top-down grouping or committee is not the same scaling law.

We don't have time to waste on top-down bureaucracy.

Warren Buffett doesn't do angel investing, because he wants to evaluate companies based on well established metrics. Angel investing is a game of more risky probabilities. Thus efficiency of scattershot is more important. Angel investing will become less and less like an exhaustive evaluation and more and more spontaneous and small, e.g. KickStarter. Everyone gives a little bit, not one big whale slowing everything down.

The Knowledge Age is the end of the road for large stored capital. The power-law distribution of wealth will shift to stored knowledge. Actionable knowledge will be power-law distributed. It already is. Which is why when you are searching for a needle in a haystack, don't tell the needle to jump to your castle.

It doesn't matter if Paypal accepts Bitcoin because users who are not investors (e.g. especially females and the billions of impoverished) have no incentive to convert from their unit-of-account (dollars) to BTC just to pay for something. They might as well just fund their Paypal transactions with their credit card or bank account. Bitcoin will not become the unit-of-account without the blessing of the government, because it has no distribution scale.

Most of the impoverished don't have a credit card nor bank account.

The Paypal plan.

The reason Paypal couldn't just issue everyone in the developing world an account is because of jealousy thus legal and political risk. Governments would resist take over of their financial control by an overtly fascist corporation.

Peter Thiel et al are more clever.

Issue everyone a supranational digital account that is "decentralized and controlled by no one", when in fact it is centralized and controlled by the fascist powers-that-be.

Use this to force other countries into submission when they attempt to offer their own top-down centralized digital currencies, e.g. Ecuador.

The people are trapped either way in a fully traceable block chain and NWO Technocracy.

Monero (portmanteau of money+dying euro?) offers no hope of scaling to avert this rapidly developing fascist outcome.

C'est la vie. Fait accompli.

And the competing and equally devastating Apple Plan.

[cleverhope]

it is interesting, why steemit dont use advertising selling on steemit platform? it can interested a lot of investors. Also it will help to support sbd withou steem dump.

[profitgenerator212]

It's not a ponzi scheme, it's a socially funded blog system

• Steemit users get rewards for posting
• Steem holders/investors pay for it

IMO you are right on this one
I guess OPs problem is that the "devs" are holding the funds from what they are paying out. I see what he means by this topic, but i dont see any solution to keep the funds decentralized, since only this would resolve this problem. And this is clearly not a  ponzi/ pyramid scheme.

Well of course they want to hold onto the funds if they believe Steemit will be successful in the future.

I would be more worried if they were selling. But over time the distribution of SP will be more equal, as more people invest.

[iamnotback]

I am also from India and facing this issue as well.The main reason behind this have our government is taken a huge step and banned the higher value notes to take control of black money.So peoples here are trying to either buy gold with them quickly and some who know about bitcoins want to buy it.
Every day i see in our india exchange btcxindia.com,the price of bitcoin is just inreasing.

Is gold viable as a currency? How do you trade a gold necklace for a hamburger?

Wouldn't an instant currency transfer with your mobile phone be more practical?

Aren't Indians very fond of having a smart phone as soon as they can afford one?

The government can't stop people from using crypto-currency unless they block the Internet.

Am I correct that Indians hate to pay taxes?

India is Paying $900+ for Bitcoin Amid Cash Crisis

https://news.bitcoin.com/india-paying-900-bitcoin-cash-crisis/

What do you think about this?

They will need to switch to Bitcoin to escape from government taxes:

http://www.hindustantimes.com/india-news/after-complaints-of-printing-variations-rbi-says-new-rs-500-rs-2000-notes-legal/

Sadly yes indian dont love to pay taxes but i am totally against it because there is a huge lot of black money in our country which is slowing down country's progress for sure,thats why that strong step being taken to remove all those black money.

Bitcoin can be an option but still to buy bitcoin people have to first deposit their cash to bank account and then buy bitcoin and i that way government can track that big amount is being deposited but yes they can never know how much bitcoins have been holded and hence cannot take tax for that.

Bitcoin has that problem of onboarding, but Steem(it) does not. And there is a better clone/kind of Steem(it) coming which I think is going to make it very easy for the people to get crypto-currency without needing to go through an exchange. And then the world will change. I say this, because I am the person who is creating this new project.

Why is not paying taxes bad for your country? The government is the most inefficient use of resources, so keeping resources out of the government's hands should be the best for growing the economy.

“An elephant is a mouse built to government specifications.”  ― Lazarus Long

You think the government is the only entity which can build roads, schools, and provide food and health care to the indigent?

Rather the problem in India is your country doesn't allow foreigners to invest there without a lot of corrupt bureaucracy. The problem of India is all the corruption. I read there are corrupt police and officials and it is very difficult and dangerous to attempt to do business there.

So what you really need in India is to stop the caste system and stop the corruption.

With crypto-currency and the Internet, we can empower the people of India to rise above the corruption, because the government officials can't control the Internet, the way they can control the lands, the licenses to build infrastructure and do physical business. The virtual economy is global and the people can increasingly go to it to earn income which can't be corrupted.

This is the future.

[Joint Force]

Does anyone know details about steem.it? Pm me.

[Zer0Sum]

So what you really need in India is to stop the caste system and stop the corruption.

Dan Larimer believes the caste system...
And wholesale corruption by the ruling caste will lead to "world domination".

It's a tribute to his genius that Dan invented both "currency pegs" and the "caste system" in recent years.

[r0ach]

The government is the most inefficient use of resources, so keeping resources out of the government's hands should be the best for growing the economy.

Yea, the government requires lots of waste to exist.  Humans used to be hunter gatherers, then as soon as they started creating surplus, the predator class (govt) arose from that surplus.  It seems like peak conventional crude oil (which appeared to happen in 2004) will force the state to scale back most of it's power unless it can replace all of it's current waste with fusion energy or having a dangerous fission plant every few feet.

[standalone13]

because the dev holds the funds to pay you out doesnt mean that its pyramid

[mtnsaa]

it is interesting, why steemit dont use advertising selling on steemit platform? it can interested a lot of investors. Also it will help to support sbd withou steem dump.

Ad revenue would be so little to sustain Steem or SBD price that it's not worth the inconvenience for the users. Also these users are basically the owners of the platform and content creatores, so I'm not sure who will benefit for showing ads there or what type.

The real problem with Steemit is that their content quality is pathetic compared to Facebook, Reddit, Medium, etc. If the content was superior and it had actual demand from the mainstream like the previously mentioned I could see how "blogging is the new mining" could work and justify the crazy inflation model. But as you have it now you are basically throwing money to keep a endless hyperinflation scheme running.

[Tinfoilwhale]

it is interesting, why steemit dont use advertising selling on steemit platform? it can interested a lot of investors. Also it will help to support sbd withou steem dump.

Ad revenue would be so little to sustain Steem or SBD price that it's not worth the inconvenience for the users. Also these users are basically the owners of the platform and content creatores, so I'm not sure who will benefit for showing ads there or what type.

The real problem with Steemit is that their content quality is pathetic compared to Facebook, Reddit, Medium, etc. If the content was superior and it had actual demand from the mainstream like the previously mentioned I could see how "blogging is the new mining" could work and justify the crazy inflation model. But as you have it now you are basically throwing money to keep a endless hyperinflation scheme running.

Steem replacing Youtube has never worked for me.

Check a 3 months chart. Facts do speak for themselves.

[brekyrself]

it is interesting, why steemit dont use advertising selling on steemit platform? it can interested a lot of investors. Also it will help to support sbd withou steem dump.

Ad revenue would be so little to sustain Steem or SBD price that it's not worth the inconvenience for the users. Also these users are basically the owners of the platform and content creatores, so I'm not sure who will benefit for showing ads there or what type.

The real problem with Steemit is that their content quality is pathetic compared to Facebook, Reddit, Medium, etc. If the content was superior and it had actual demand from the mainstream like the previously mentioned I could see how "blogging is the new mining" could work and justify the crazy inflation model. But as you have it now you are basically throwing money to keep a endless hyperinflation scheme running.

Quality content takes time.  Recent support for block chain based social media includes reddit ceo altering content along with reddit censoring the pizzagate investigation.  With the general media fighting each other about "fake" news, this is a prime time for something like steemit to take center stage.

[alyssa85]

it is interesting, why steemit dont use advertising selling on steemit platform? it can interested a lot of investors. Also it will help to support sbd withou steem dump.

Ad revenue would be so little to sustain Steem or SBD price that it's not worth the inconvenience for the users. Also these users are basically the owners of the platform and content creatores, so I'm not sure who will benefit for showing ads there or what type.

Instead of formal advertising, all advertisers need to do is buy some steempower and then automatically upvote anything that has their chosen keywords in it. Writers will automatically start including said keywords, so it is win-win, especially as it is a more natural form of advertising.

The problem is that the advertising industry is stuck in the old days where they advertise like they do in newspapers or on the search engines. It will take them awhile before they wrap their heads around a new model.

[iamnotback]

it is interesting, why steemit dont use advertising selling on steemit platform? it can interested a lot of investors. Also it will help to support sbd withou steem dump.

Ad revenue would be so little to sustain Steem or SBD price that it's not worth the inconvenience for the users.

Indeed. I documented this quantitatively upthread months ago and earlier this year in my analysis of the non-potential of Synereo.

The real problem with Steemit is that their content quality is pathetic compared to Facebook, Reddit, Medium, etc. If the content was superior and it had actual demand from the mainstream...

Medium is not going survive either. Blogging content is not sufficiently monetizable to sustain the model Steem has.