Steem pyramid scheme revealed

[Hyperme.sh]

Continue affiliating with and selling Steem (and especially EOS) then perhaps end up in big trouble with the law later.

In addition to the legal issues already raised, these Steemians want to pile on more legal woes:

Gambling in crypto is like a huge vacuum cleaner that sucks in value into that currency.

Steem would then be enabling activity which is illegal or regulated in many jurisdictions including the USA.

And the problem is that Steem is not a decentralized token system. It is owned and controlled by whales. It was launched as investment security as has been explained.

Startups who embark on the ICO journey are creating automated value transfer systems that operate across borders with no KYC. These systems, once turned on, cannot be turned off or controlled. But the startups will continue to be expected to maintain them.

This is not easy, technically or legally. For this reason, the SAFT is clearly not anything near a cure-all for the compliance issues an ICO startup will later face, whether in the field of securities regulation or otherwise.

Severe legal problems might be coming eventually (maybe not too soon though) to those whales who were involved in Steem.

I’m perplexed about @smooth’s continued involvement in Steem, if at all. I ponder maybe he thinks he is exempt because he mined his tokens as an outsider and he has continuously cautioned about Steem (and he may have unselfishly reinvested all/most/some of his STEEM proceeds into the Steem ecosystem), but I really wouldn’t want to be in his predicament. I genuinely hope his anonymity is iron-clad or that he has received expert legal counsel, because afaics @smooth has most often tried to be objective and avoid disingenuous activities in our ecosystem so it would be with some remorse by many here if he were to suffer.

Granted most of us didn’t understand the full implications of the law before. But now it is being explained clearly to us and with numerous warnings by authorities. It behoves us to clean up our investing activity.

Okay so there are 2 strategies:
* You get few rich people to sign up
* You get many poor people to sign up

So then you agree with me when I noted that your claim about 300,000 users was not a comparable metric. Dividing by 1000 as you proposed, gives us only 300.

My ”eyeballing it” guess is the actual economic population of Steem is some where in the range of a couple 1000 at best. Which is irrelevant unless it is growing fast and making some fundamental paradigmatic shift of great significance.

And he said in a recent interview that Steem is pretty much ready now, it only needs GUI design from now on for Steemit. The blockchain is mature enough.

DPoS is not antifragile neither technologically (at Internet scale) nor in terms of political economics. When you have 300 million users then we can talk about whether the blockchain is adequate. And I assure that DPoS will fail way before you reach even 30 million users due to the fact that is an inherently centralized technology. For the analogous reason that Visa can not scale to nanotransactions for every individual on the planet.

Dan makes investment schemes, but not paradigmatic solutions which have a long-tail future. However, I will grant that Dan has contributed, especially with his TaPoS concept, which will end up being very important.

And he is very likely in massive trouble with the law in the future, especially with EOS.

There is some conflict now between the whales and it might be bad for Steem that such high profile people are in a fight right now. But we will see what will happen.

This is just the beginning of the natural power vacuum of centralized paradigms.

Watch it either disintegrate or taken over by an oligarchy.


Actually I like blogging on Steem more than Medium, because I am so tired of being censored (and yes I had comments deleted on Medium). But the downvoting on Steem is inane.

That being said. We do really need a way for speculators to participate in our ecosystem. But we do not need a new token for every new venture. That is the fundamental flaw in the Ethereum ICO model.

We need a different way to monetize “apps” and investing in ventures that develop apps, which side-steps token issuance.

Because there is a huge amount of money out there that wants speculate in decentralized ledger technology. The first project that shows the way forward from ICOs, will likely see a huge success.

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[profitgenerator212]

Continue affiliating with and selling Steem (and especially EOS) then perhaps end up in big trouble with the law later.

All cryptocurrencies are technically illegal or in gray area because in most countries the legal tender has monopoly. And you have KYC/AML regulations that crypto's don't respect.

But so what all crypto users take this responsibility. Any early technology has legal risks.


It's that law that is wrong, the law has to change. But by now governments have became so big and monstrous that it is time for people to push back against it.

So reforming the legal system is a priority, people are getting tired of bank bail-ins, social security ponzi schemes and stagnating wages, while the supposed boogeyman are some punks who might not respect KYC regulations properly.

Tell me which one is a bigger problem for society?

My ”eyeballing it” guess is the actual economic population of Steem is some where in the range of a couple 1000 at best. Which is irrelevant unless it is growing fast and making some fundamental paradigmatic shift of great significance.

Big youtubers could join any time now. They are getting hammered on Youtube revenues.

Steemit is a complimentary revenue for any blogger. Why not use it?

And he is very likely in massive trouble with the law in the future, especially with EOS.

I believe they don;t accept US citizens in the ICO sale. Most regulatory problems come from the US.

The rest of the world is more relaxed.

This is just the beginning of the natural power vacuum of centralized paradigms.

Watch it either disintegrate or taken over by an oligarchy.

Not with the delegation system. Many newbies could band together to mount a collective defense against an out of control whale.

It makes things more equal.

[gedor]

Is it better to sell out Steem? I am not interested in this story and I believe there are worse things that we can't see yet in crypto. May LBRY Credits also do the same pyramid scheme?

[Hyperme.sh]

All cryptocurrencies are technically illegal or in gray area because in most countries the legal tender has monopoly. And you have KYC/AML regulations that crypto's don't respect.

But so what all crypto users take this responsibility. Any early technology has legal risks.

Sincere Proof-of-work distribution does not present this problem. I explained why in my posts.

These scammy ICOs and obfuscations of ICOs are in much greater legal jeopardy.

It's that law that is wrong, the law has to change. But by now governments have became so big and monstrous that it is time for people to push back against it.

So reforming the legal system is a priority, people are getting tired of bank bail-ins, social security ponzi schemes and stagnating wages, while the supposed boogeyman are some punks who might not respect KYC regulations properly.

Tell me which one is a bigger problem for society?

Two wrongs don’t make it right. Those who must do scammy and illegal things, will not successfully reform the government.

How can a technology lead when it is inherently just the same politics and power struggle crap it is trying to replace.

Big youtubers could join any time now. They are getting hammered on Youtube revenues.

Steemit is a complimentary revenue for any blogger. Why not use it?

Because the voting revenue model sucks and is dominated by whales. And because the audience is tiny. The hen-egg problem is a serious problem.

The app revenue and onboarding model is one the main facets where my project to replace Steem, will excel over Steem.

And he is very likely in massive trouble with the law in the future, especially with EOS.

I believe they don;t accept US citizens in the ICO sale. Most regulatory problems come from the US.

Incorrect.

The rest of the world is more relaxed.

We already have Russia, China, Singapore, Hong Kong, South Korea, Canada, UK, and USA warning about further enforcement coming against ICOs. They all caved in for FATCA as well.

This is just the beginning of the natural power vacuum of centralized paradigms.

Watch it either disintegrate or taken over by an oligarchy.

Not with the delegation system. Many newbies could band together to mount a collective defense against an out of control whale.

It makes things more equal.

A minority of votes in the ecosystem can always be out voted by a 51% oligarchy on every DPoS delegate’s election.

A plurality of minority voting blocs is disintegration from any coherent plans and developments. Normally this is what we want for decentralized ledger, but not when minority blocs can downvote each other into oblivion.

Democracy and politics is what we need for decentralization to supercede so that we can attain greater cooperation in society. See the following Steem conversion on that:

https://steemit.com/freedom/@anonymint/re-anonymint-re-anonymint-re-anonymint-re-anonymint-re-anonymint-marissa-mayer-is-the-poster-child-for-bitches-in-tech-20170906t062435963z

[A.Dong12]

Bold statements should be backed up by some proof.  Care to explain?  Steem, while it may not be perfect etc... is attempting to attract people with no crypto knowledge.  This goes beyond simply sending a token from a to b that the general public could care less about.  Don't be part of the problem on this forum and yell scam, think bigger and try to theorize ways to improve honest projects. 

[profitgenerator212]

Sincere Proof-of-work distribution does not present this problem. I explained why in my posts.

Of course it does, mining could be considered unlicensed business.

Running a full node could be considered aiding moneylaunderers, etc..

You do realize that the law is so complex and insane that they can essentially nitpick any single point and ban the whole thing.

It's up to people to resist this. People have to realize that the law is not a fixed thing. The opinion of judges and prosecutors vary depending on the political envionment. Parliament members then have to react to this and rework the laws.

I have explained very well in an older post of mine, that if you really think about it, everything is illegal. It's just that the State doesn't have a cop for everyone to put in jail everyone, otherwise everyone would be in jail already:

https://steemit.com/law/@profitgenerator/if-everything-were-illegal

Of course you can't put everyone in jail, since it's logistically impossible, thus you end up with concentration camps. This is the endgame of tyranny. People didn't resisted Hitler and we know what happened then unfortunately.


It's all bullshit, and it totally depends on what people put up with or not. And it's pretty hard to put down a decentralized community.

Thus this time the law will reflect the opinions of the public, and not the other way around. You can already see this how politicians everywhere are "legalizing" cryptocurrency. They just can't put up with it.

Those who must do scammy and illegal things, will not successfully reform the government.

If there is no victim , there is no crime. Who exactly is the victim here?

Because the voting revenue model sucks and is dominated by whales. And because the audience is tiny. The hen-egg problem is a serious problem.

The app revenue and onboarding model is one the main facets where my project to replace Steem, will excel over Steem.

So you really think that whales will not submit to public pressure?

I mean if a big youtuber comes with a 500,000 audience over to Steemit, don't you think that is a lot of social capital to put pressure on whales with?

Ostracism and public shaming is the only way to keep order in a free and voluntary society. So if you have free speech, you can fight back against uneqal opponents if either you have big influence or band together with others.

We already have Russia, China, Singapore, Hong Kong, South Korea, Canada, UK, and USA warning about further enforcement coming against ICOs. They all caved in for FATCA as well.

Ok I am not goin to argue with you laws, since I am not familiar with them.

But I do believe the BRICS and the ASEAN countries have their own agenda.

It looks to me like a giant capital control system. China banned CNY trading since they have horrible capital controls already in place. They all look for their own interests.

A minority of votes in the ecosystem can always be out voted by a 51% oligarchy on every DPoS delegate’s election.

A plurality of minority voting blocs is disintegration from any coherent plans and developments. Normally this is what we want for decentralized ledger, but not when minority blocs can downvote each other into oblivion.

Democracy and politics is what we need for decentralization to supercede so that we can attain greater cooperation in society. See the following Steem conversion on that:

https://steemit.com/freedom/@anonymint/re-anonymint-re-anonymint-re-anonymint-re-anonymint-re-anonymint-marissa-mayer-is-the-poster-child-for-bitches-in-tech-20170906t062435963z

But there is erosion of power since Steem is mostly inflationary and % power is directly funneled from early holders to authors or new investors.

Most early holders with big balances don't post since they are afraid that their account will get hacked so they probably dont login often. I havent saw many big whales posting, but only curating.

Thus money over time is directly funneled from early holders to authors. Then you also have new investors who buy Steem, and due to the pressure, you have the whales selling Steem.

So I doubt an oligarchy will form in Steem. It's too dynamic, and there is no Government to impose a monopoly. Usually most oligarchies form due to Govt regulations.

[adstudio]

Try to make something own, witnout any mistakes, or reveal all proofs and facts.

[Hyperme.sh]

Bold statements should be backed up by some proof.  Care to explain?

Read the recent past few pages of discussion. Follow all the links.

But there is erosion of power since Steem is mostly inflationary and % power is directly funneled from early holders to authors or new investors.

Incorrect. Whales can vote to award most of the rewards to themselves. And as I explained last year, it is impossible to design a voting rewards from the collective money supply system that wouldn't aggregate the rewards to the whales.

Sincere Proof-of-work distribution does not present this problem. I explained why in my posts.

Of course it does, mining could be considered unlicensed business.

That is as ridiculously disingenuous as arguing any economic activity could be considered unlicensed business. If we reach that level of totalitarianism, then we will be in a different even more insane world than we are in now.

FinCEN for example has clearly stated that mining is not in violation of their regulatory jurisdiction.

If you continue to make disingenuous arguments, then it's pointless for me to continue the discussion with you.

Running a full node could be considered aiding moneylaunderers, etc..

If that ever is the case, cryptocurrency is dead and we are in a totalitarian world where running a router on the Internet could be considered aiding moneylaunders.

You're trying to justify Steem breaking securities law by arguing the civilization is always totalitarianism, thus implying we must always break all laws and destroy civilization.

You can't possibly build anything without civilization. If you indeed get the lawless world you claim you want, Steem will be destroyed along with everything else.

You do realize that the law is so complex and insane that they can essentially nitpick any single point and ban the whole thing.

It's up to people to resist this. People have to realize that the law is not a fixed thing. The opinion of judges and prosecutors vary depending on the political envionment. Parliament members then have to react to this and rework the laws.

I have explained very well in an older post of mine, that if you really think about it, everything is illegal. It's just that the State doesn't have a cop for everyone to put in jail everyone, otherwise everyone would be in jail already:

https://steemit.com/law/@profitgenerator/if-everything-were-illegal

Of course you can't put everyone in jail, since it's logistically impossible, thus you end up with concentration camps. This is the endgame of tyranny. People didn't resisted Hitler and we know what happened then unfortunately.

I also want to change the world towards greater cooperation with new technology, but revolution is not a solution. Every revolution ends up as power vacuum where a dictator or worse steps in. The youth are always in favor of destroying everything but they do not realize the true cost of this:

https://www.armstrongeconomics.com/world-news/civil-unrest/the-rising-youth-civil-unrest/
https://www.armstrongeconomics.com/international-news/politics/the-right-to-vote-should-attach-to-only-those-who-pay-taxes/

Whereas, the older and wiser (such as myself at age 52) understand we need an evolutionary strategy.

So if you want to help the world reach greater cooperation, don't expect to accomplish it by launching a token system in a scammy way with a sneaky instamine so that the whales control the thing and then think this is any better than the system you think you are fighting.

You're just fooling yourself like a dog chasing his tail and not knowing it.

[profitgenerator212]

Incorrect. Whales can vote to award most of the rewards to themselves. And as I explained last year, it is impossible to design a voting rewards from the collective money supply system that wouldn't aggregate the rewards to the whales.

I havent read your entire post but you started criticizing linear rewards, and I really don't get it.

You said there that money will be funneled from altruists to selfish posters. I think that is blatantly wrong.

First of all there is no "self voting" I dont even know what that means. When you write a post you upvote your post with your power.So whether you send your SP to a sockpuppet account or vote on yourself with the same account is technically the same isn't it?

One thing I could imagine is that a person empties his entire VP on himself, but remember voting is a social thing. If nobody votes after him then he barely makes money. So yeah a person can vote on himself but the way I experienced it's more profitable to vote on others instead.

Secondly there is erosion, whales powering down, more investors buying in, and eventually you will have tens of thousands or millions of minnows joining together in some sort of delegation pool (like you see with miners now) who will have enough power to equalize themselves.

Sort of like how in a democracy poor workers form trade unions to put up a fight against the "evil capitalists". Of course whether this setup gets corrupted or not in the future, that is a different topic.

That is as ridiculously disingenuous as arguing any economic activity could be considered unlicensed business. If we reach that level of totalitarianism, then we will be in a different even more insane world than we are in now.

It is already like that, it's just that the government doesnt have enough power to enforce it, but when they will, they will unleash it unfortunately.

There was a pretty good inverview on some libertarian channel about this, where a guy asked a TSA officer why are they screening people only when leaving and why not also when coming, and the guy replied that basically he didn't had enough manpower, otherwise he would have done it.

So that is how government works, the default is tyranny. It's just that they don't have enough manpower or opportunity to implement it entirely.

FinCEN for example has clearly stated that mining is not in violation of their regulatory jurisdiction.

They can just change their minds in a week, and that's about it.

I can't believe people still hope that these bureaucrats will do anything good for the average person.

If that ever is the case, cryptocurrency is dead and we are in a totalitarian world where running a router on the Internet could be considered aiding moneylaunders.

I don't personally think it will ever go that far , and I really hope that it won't, but there will be some crackdowns in the future in favor of banks probably crushing small competing businesses.

You're trying to justify Steem breaking securities law by arguing the civilization is always totalitarianism, thus implying we must always break all laws and destroy civilization.

No, I didn't imply that people should break laws, I said that people should change the laws, but before that, they need to realize what is going on. People have to realize how the political game works.

You can't possibly build anything without civilization. If you indeed get the lawless world you claim you want, Steem will be destroyed along with everything else.

Who said anything about "primitivism", I never advocated nor spoke in favor of any kind of barbaric/primivisim kind of society that some anarcho-primitivists are advocating for.

I don't think you understand well libertarian principles and you certainly conflate multiple, competing, libertarian ideologies.

If I'd define myself simply I'd say that I am a voluntary capitalist or voluntary libertarian or whatever other synonymous labels you can find. I do like the free market. And that implies civilization of course.

I also want to change the world towards greater cooperation with new technology, but revolution is not a solution. Every revolution ends up as power vacuum where a dictator or worse steps in. The youth are always in favor of destroying everything but they do not realize the true cost of this:

I know, I even wrote a couple of posts about this. I would also like to have a voluntary world, which is only achieve through voluntary means, be that cooperation or friendly competition.

So if you want to help the world reach greater cooperation, don't expect to accomplish it by launching a token system in a scammy way with a sneaky instamine so that the whales control the thing and then think this is any better than the system you think you are fighting.

That is a very narrowminded way of looking at it, and even if you are right, it doesnt prove anythin, for now it works and that is all that matters.

[Hyperme.sh]

Incorrect. Whales can vote to award most of the rewards to themselves. And as I explained last year, it is impossible to design a voting rewards from the collective money supply system that wouldn't aggregate the rewards to the whales.

I havent read your entire post but you started criticizing linear rewards, and I really don't get it.

Re-read it until you understand it. Everything else you wrote about it, it's nonsense exhibiting that you did not comprehend it.

One thing I could imagine is that a person empties his entire VP on himself, but remember voting is a social thing. If nobody votes after him then he barely makes money. So yeah a person can vote on himself but the way I experienced it's more profitable to vote on others instead.

Not in the case of colluding whales with significant portion of powered up money supply.

Secondly there is erosion, whales powering down, more investors buying in, and eventually you will have tens of thousands or millions of minnows joining together in some sort of delegation pool (like you see with miners now) who will have enough power to equalize themselves.

You do not comprehend political economics and power vacuums.

You may even be a Libertard. That's the succinct way of asserting that everything you wrote exhibits a lack of understanding of reality.

For example, the argument you make about if some group was omnipotent they would enslave all of us. Yeah. Anyone who was omnipotent could enslave us all. But no one is omnipotent. If you go breaking the laws and creating a system where the whales rape the system, then you end up in a clusterfuck, which is precisely what Steem is and will increasingly become.

If you want to waste your effort building apps for system like that, then please do.

Meanwhile I will focus my efforts on a system I designed which will be truly decentralized and not break securities laws. I would ask you to write apps for it and gain my advice on marketing, so you could succeed and make a lot of money while also helping genuinely evolve the world, but since you're too stubborn to even comprehend the blog post I linked for you, then I think it is pointless for me to try to work with you. Wouldn't you agree?

I want to work with top developers in the industry, not with crazy paranoid people who lack coherent logic skills and who willfully break the law and try to rationalize it with nonsense.

I want to make systems that the masses can feel comfortable to adopt, not crazy fringe shit that the masses will run away from.

When you cited 300,000 signups for Steem and I countered that I had seen many Indians signing up noticed them doing deleterious activities such as posting one word comments on my blogs (ostensibly attempting to get an upvote for minimal effort) or only asking me to follow them, I asserted most would be opportunists looking to extract value from the system while destroying it, i.e. and only scammy Indians looking to extract value from it, will join. I have experienced first hand for example Indians guys trying to scam me here in the Philippines  and also when I tried to hire some virtual workers online I encountered what seems to be a cultural attitude of "get mine any way I can". Upthread you criticized me as rascist, but I run into Indian foreign exchange students on a frequent basis here in the Philippines and so far they are the most arrogant and discourteous people I have ever met. Even experienced multiple times females (and males) refusing to make eye contact and pretending they do not see me and try to walk right over me in an area where there is plenty of space to avoid a collision (and doing it not with body language of being timid but one of being arrogant). They will walk right over you on the sidewalk and pretend your a piece of shit for not getting out of their way. I presume just like the Philippines where I have lived on/off for more than 2 decades, there is a reason that India is a hell hole. That does not mean there might not be some good people in India and other 3rd world clusterfucks like the Philippines. And I would of course like to build systems that help people all over the world. But I can also tell you that the gentlemen's culture I experienced growing up in the USA, does not appear to have any place in the culture of some of these 3rd world clusterfucks. If you privately discuss with the locals, the astute ones will criticize their own cultures and admit their countrymen have crab bucket mentality that originates from clan tribalism.

Maybe if you actually lived in a hell hole, had married a hell hole, and been mired in the clusterfuck of the 3rd world, then you could remove those rose colored glasses and comprehend reality.

I actually agree that the world is moving more and more towards totalitarianism because humans are willing to hand all the power to those who control the issuance of debt and turn their kids over to State schools which teach the kids leftist nonsense. And that is why we need to build truly decentralized systems which are not controlled by the whales. IOHK's Ourobos has the same flaws in that it will not reasonably function without delegates, thus the political economics power vacuum will always apply and it will have the same flaws as DPoS in that regard. We instead need a truly decentralized ledger, i.e. not proof-of-stake. Proof-of-work also can not function without being centralized once the transaction fees rise to significantly more than the block reward.

None of the existing ledger designs ameloriate the centralized clusterfuck. I have the design which solves these issues and which scales decentralized, neither of which delegated proof-of-stake can do.

Also Steem's voting system and onboarding monetization design will not scale up.

Downvoting is an abuse of the intention of upvoters to reward content they appreciate. Downvoting by whales ameliorates the economics of Likes and confirms that Steemit will descend into a crab bucket clusterfuck eventually:

https://bitcointalk.org/index.php?topic=1558366.msg21680281#msg21680281

Essentially downvoting is censorship. Because my readers did not elect you downvoting whales to be moderators for them. You're forcing your will on readers who do not agree with you. The Internet was liberating because each person could independently publish and source information, yet now Steem wants to tie everyone's shoelaces together again by debasing everyone from a common pool of tokens in order to redistibute everyone's money collectively which is of course a power vacuum of politics clusterfuck totally in antithesis to the innovation of the decentralized Internet protocols. If you do not like my blog, then do not read it. Downvoting is inane, and should only be used to human filter spam. But you want to run your blockchain like a corporation, because it is effectively an investment security corporation. And a corporation can not have more than more CEO. So either you will have an oligarchy that takes control (if not already the case but obfuscated with Sybil accounts) or the blockchain will diverge into a clusterfuck of disagreement.

At the end game collapse is when either the whales start downvoting each other due to fighting over differing ideals and vested interests (which will be accelerated when competition is kicking Steem's butt forcing it to change or die), or an oligarchy takes control of sufficient money supply to run Steem as the corporate token illegal investment security that it is.

The power-law distribution of resources is inviolable. It is a natural outcome of economics and physics. Decentralization technologies have to overcome this fact of nature somehow. So far afaik, no one (other than myself privately) has shown how to accomplish it. Proof-of-work and proof-of-stake have not ameliorated the ill effects of the power-law distribution of resources. Ditto Steem's ill conceived voting paradigm.

EDIT: according to the 24-year old filipino van driver last night he has an Indian student friend who he says is a very good guy. I asked his opinion about the interactions I've had with Indians, and his thought was that maybe they don't like white guys. I'm wondering if it might be caste system related thing. Any way, the reason the foreign exchange students come to the Philippines to study is to improve their English and the low cost. I do remember encountering an older Indian lady on Steemit and she seemed to interact well, but afair she seemed to have had more interaction with foreigners (can't remember the reason, maybe it was her vocation).

EDIT#2: I'm the dinosaur on wishing Indians adopt my ancestors' values.

[Hyperme.sh]

Wondering if some old timers can help me out with a simple ques

We have SteemIt which is a working product already with the number of users and hits per days keeps increasing

Other side, we have multiple promising projects (OMG, Maid, NXS) but nothing in live.....

Including me, many of us tend to take chance and gamble with the projects that's not yet out in market and by large extent have ignored a working product. I am looking at SteemIt at this point, though things looks solid to me, the above ques is kind of haunting me to think that I am missing something and there is something seriously wrong in SteemIt.

Please feel free to stop by and have your comment!

The main impediment to a business model that could drive massive ecosystem adoption is the instasneakymine that put a small number of whales in control and they are essentially debasing the money supply (via the voting and curation rewards) and sending it to themselves via numerous sockpuppets and owning DPoS witness accounts. So essentially instead of being an open system that incentivizes everyone to build apps for it, only the whales are incentivized build apps (i.e. there is no open competition of the best ideas), thus you end up with xerox copy GUIs such as busy.org which add not much of any value. There are some other apps built on the Steem blockchain though, such as a decentralized chat, but I have not yet had time to try them.

James A. Donald who was the first person who communicated with Satoshi on the mailing list where Bitcoin was announced, confirms that DPoS is not decentralized (DPoS is the blockchain technology of Bitshares, Steem, EOS, Lisk, Ark, and any Steem clones).

There is no possible way to design a voting system that pays rewards by debasing the collective money supply, which will be fair. I had written a blog explaining this mathematically:

https://steemit.com/steem/@anonymint/blog-rewards-can-t-be-widely-distributed

In my analysis, it is the economics of Steem as it pertains to incentivizing others to make apps for it, and the way that users are incentivized that does not correlate well to viral onboarding and app development. However, compared to all the other altcoins, it is the one with probably the most widespread use by people other than just speculators. So it does seem to be undervalued.

So although conceptually it is interesting, you are really going to need my project which will correct these flaws.

Re: Who is paying for Steemit?

Hi Guys, I am trying to do some fundamental research on Steem but there is one thing I don't understand and that i'm not finding the answer on. Who does actually pay for this whole project.

Answer is here.

In short, everyone who owns the STEEM token pays for the rewards which are created by minting new STEEM tokens out-of-thin-air, but this burden is disproportionate because whales are able to redirect most of the money supply dilution to themselves via their numerous sockpuppet bloggers.

It is analogous to a masternode or proof-of-stake coin, where the whales siphon off most of the transaction fees and any minting of coins disproportionately.

To add, STEEM has a cetain reputation to each members, the higher the reputation the more likely you can upvote a certain topic there.

Incorrect. Steem Power (how many STEEM tokens you have locked up for 13 week holding period) determines your power in the voting and curation rewards.

The reputation thing is just a number which has no real impact other than readers see the number on all your comments. I have a high reputation at Steemit because I joined in July 2016, but my Steem Power is low because I sold most of my STEEM.

However, i feel like the distribution of Steem initially is completely unfair. There was a period of time where whales mined the rewards, without having to contribute to the network in any way. That was sort of the premine period where all of the founders + some people from bitshares were able to gain a large stash of steem.

And because afaik the whales can route the voting rewards (via their sockpuppet bloggers) and curation rewards disproportionately to themselves, the distribution only gets more unfair over time.

And the disproportionality is afaik even worse than proportional to the whales’ disporportionate share of the Steem Power, because a square power had to be employed else the system could be gamed and destroyed. I had explained that in more detail in my blog from 2016.

The entire concept of voting on dilution of the money supply is insolubly flawed. Again read the linked blog from 2016 which explained it.

[rijwanjaelani]

steem is really a piramid. But as for me i took a good money from it. of course for profit a common user must only take money, no power up. Lets look on chart today - everything is awful. Devs have done a hardfork but it did not help a lot. a have gone from steemit two mounth ago. good luck steemers.

[Balmain]

Steem is a worse way of pyramid scheme. If you are not in top level or 2nd level you probably gain very low value, which is questionable. Why would you write something to get some money from other people? When you realize it's a waste of time you will stop using the platform.

[kakusnice]

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

[axiline]

Let's look behind the developments and behind this topic. I would like to have developers give their comments on this matter. Since I am the holder of Steem, I'm interested!

[Blakscorpion]

Apparently, some people should check the definition of Ponzi... It's clearly not the case for steem, but people don't like to read whitepaper, they prefer yelling first...

[Hyperme.sh]

Apparently, some people should check the definition of Ponzi... It's clearly not the case for steem, but people don't like to read whitepaper, they prefer yelling first...

You were feeling very smug, superior, and self-confident when you wrote that huh?    (and I did read the entire whitepaper in 2016)

The thread title says “pyramid scheme”. Which is the economic reality of Steem.

Steem can’t be an investment for anyone who isn’t a whale as previously explained. A speculation yes, but an investment based on a sound fundamentals no. Any system that is designed to allow the whales to debase the money supply and take it for themselves is not an investment, just as holding the US dollar is not an investment.

Steem is just another damn central bank run by whales debasing everyone and offering some crumbs to buy off the minions. Sounds a lot like most governments we have.

(Just because you never thought of it correctly that way, do not blame me for my “abysmal reasoning” ability to do so)

A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products or services.

[CryptoKranthi]

Whatever but holding 80% with them is too much.It is hard to earn steem now.Its because Steemit was designed for early adopters, not a fair distribution.Its hard for a newbie to earn with an excellent post while an early member can easily get hundreds with a shitty old post.

[valentin68]

Yes steem is a scam, I was part of it for some days, worked to comment and vote and received some 10-50 cents for all my activity. They say that if you work day by day you will be rewarded, ther are poeple there earning 1-2 USD/day after working for some weeks. Not a chance to earn tenss of dollars as they promised. Steem is scam as many other new inventions that pay in alt-coins.

Thank you for saying this here, I had a hunch that Steem is a scam, now I am certain on it.

[PandaMiner]

Whatever but holding 80% with them is too much.It is hard to earn steem now.Its because Steemit was designed for early adopters, not a fair distribution.Its hard for a newbie to earn with an excellent post while an early member can easily get hundreds with a shitty old post.

it's because their vote system. need invest more than 10k to get 1$ upvote. 20$ per day. 600$ per month. this is game for big player