Steem pyramid scheme revealed

[CoinHoarder]

Guys, there is literally nothing about Steem that is an actual pyramid scheme, any more so than any other cryptocurrency (and they're not either, generally speaking with perhaps a few exceptions, even when they are premines, ICOs, and another scams). "Pyramid scheme" means a specific thing which is a structured system where later entrants pay those 'above' them on the pyramid. Nothing even remotely like that exists in Steem. There is no pyramid, no hierarchal structure of any kind, and no one pays anyone else.

The title of this thread was basically trolling and/or ignorance. If you like Steem, great, if you don't like it, that's fine too, but please let's forget about the 'pyramid scheme' nonsense already after almost 3 years. That doesn't mean there aren't legitimate criticisms, I have plenty. "Pyramid scheme" isn't one of them.

Perpetual inflation outpacing the business' profit equals an unsustainable pyramid scheme.

Eventually, the token's value will collapse as people to buy the Steem token cease to exist (there are only so many people in the world).

Therefore, people that came in later by buying Steem tokens paid those that cashed out earlier by selling Steem tokens. Hence the similarities to a pyramid scheme (I only say similarities because of the asinine semantics involved with the exact definitions of terms such as ponzis or pyramid schemes).

There's a big difference in between Steem's permanently inflationary model, and most other cryptocurrencies that are inflation-neutral or deflationary.

It is very simple economic logic Smooth...

It will take a long time for the Steem token to collapse though because cryptocurrency adoption is at such a low percentage of the world's population. Steem has a chance to be the biggest pyramid scheme of all time. It will take years to decades to collapse. 3 years is nothing in the grand scheme of things.

[smooth]

Guys, there is literally nothing about Steem that is an actual pyramid scheme, any more so than any other cryptocurrency (and they're not either, generally speaking with perhaps a few exceptions, even when they are premines, ICOs, and another scams). "Pyramid scheme" means a specific thing which is a structured system where later entrants pay those 'above' them on the pyramid. Nothing even remotely like that exists in Steem. There is no pyramid, no hierarchal structure of any kind, and no one pays anyone else.

The title of this thread was basically trolling and/or ignorance. If you like Steem, great, if you don't like it, that's fine too, but please let's forget about the 'pyramid scheme' nonsense already after almost 3 years. That doesn't mean there aren't legitimate criticisms, I have plenty. "Pyramid scheme" isn't one of them.

Perpetual inflation outpacing the business' profit equals an unsustainable pyramid scheme.

That's not a "pyramid scheme". It simply doesn't fit the definition (which is most certainly not "any business which is unsustainable"). A "pyramid scheme" means participants bringing in new participants below them in a hierarchy, with those higher up in the heirarchy profiting not from general growth of the population of participants, but from those structurally below them (the so-called downstream). There is no such structure in Steem; the terminology is completely misplaced.

It may be economically unsustainable, but then you will have to take that up with XMR, DOGE, ETH, and various other coins which also have perpetual inflation and no clear source of "business profit" (although to the extent that you consider coin creation a "cost", then lost coins due to various reasons might be considered a "profit" in which case it isn't clear that any of these, including STEEM, will have "costs" exceeding "profits", though they might). None of those are "pyramid schemes" either.

Incremental net inflation doesn't imply a "collapse" either, it could simply result in a slow rate of decline in the purchasing power of the token (say a fraction of a percent per year), essentially forever (it isn't like we're going to run out of numbers), which many would find perfectly acceptable, or even good.

(I only say similarities because of the asinine semantics involved with the exact definitions of terms such as ponzis or pyramid scheme)

You may call it assinie semantics but in fact it is important to explain clearly how the structure is going to fail. For example, pyramid scheme participants (except the very first) always buy in for some amount of money, and expect to profit by growing their downstream. This fails quickly because mostly because of the skim taken at the very top. For example, if 50% goes to those at the very top, then the scheme requires each level to double the number of participants below, which is obviously unsustainable.

But again, no such thing exists in Steem. That vast majority of the participants have not bought in anything at all. They don't have to recoup an investment (that they didn't make) by bringing in exponentially more participants below. People who do invest in the token face essentially the exact same economics as most other cryptocurrencies (requiring new investors to buy from them if they ever want to cash out). Over the long term, the perpetual inflation means that passive participants will on average lose a small amount (0.5% or less due to lost coins, potentially none at all) per year, which again many may find perfectly acceptable or even good. And that is assuming that the entire system doesn't continue to gain value due to economic and technological progress. In particular, 0.5% token inflation requires doubling total economic value once in 138 years for the tokens to not (slowly) lose purchasing power. It is highly questionable to assert with certainty that can't happen.

BTW, gold supply inflates by about 1-1.5% per year, has done so for thousands of years, and will likely continue to do so, perhaps for thousands more. Its value hasn't collapsed and likely won't ever collapse from that rate of inflation (although something like feasible transmutation, asteroid mining, etc. that drastically increases the rate from 1-1.5% per year might lead to a collapse). The premise that slow steady inflation of a monetary unit always implies collapse is refuted by history.

Now, if you want to talk about what is actually bad about Steem and reasons why it might not be a good investment I'm happy to do so, but they will be actual substantive reasons, not trolling about "pyramid schemes" and bizarre economic "theories" that contradict millennia of history. (I hesitate to even call them that because actual theories must have some credible grounding in reality and realistic possibility to actually be correct.)

[cryptogeek101]

I think in my own opinion there is nothing hidden under the sun. If the information you have giving us is true we will all know about it in the nearest future. But one thing I know about Steemit is that it's helping me do my blogging. I don't fucking care about steem and its power.

[RamesesLabs]

Anything Craig Grant, Trevon James, and Crypto Nick are recommending, then I'm going the other way. Steem is promoted heavily by these scammers and they are also some of the top receivers of SteemCash, or Steem, or Minnow, whatever all Steemit is selling. The quality content never sees more than a few bucks, while all the founders and promoters see thousands of Steem thrown there way on a stupid article on how to use Steem. It might not be a pyramid, but it's a scam with deceiving marketing.

[CoinHoarder]

That's not a "pyramid scheme".

I am not interested in debating semantics. I succinctly explained why it is, in my opinion, a pyramid scheme. However, now that I've taken a second look... I did not realize that the inflation schedule has been altered since I've last read the whitepaper:

https://steemit.com/steem-inflation/@fyrstikken/what-is-the-inflation-rate-of-steem-here-is-the-supply-table-for-the-next-20-years

10% inflation per annum (what it used to be) is quite different from eventually 1% inflation per annum in the 20th year (what it is now). I would consider anything above a few percent inflation per annum in perpetuity unsustainable. Anything at or below that amount is still questionable IMO, but not what I would consider obviously unsustainable. FIAT gets away with it because it's backed by force. Gold gets away with it because there is actually a finite amount, but it is the available supply that is inflating- not the total supply. It is unclear whether cryptocurrencies can get away with it because there is no precedent.

I will retract my statement about it being a pyramid scheme based on me learning of the altered inflation schedule.

[smooth]

Gold gets away with it because there is actually a finite amount, but it is the available supply that is inflating- not the total supply.

It is not finite in any meaningful sense since it is plausible that asteroid mining and then farther into the universe may become a thing, or transmutation, or whatever other technological improvements. And indeed the universe is still creating more due to neutron star collisions or whatever it is that makes gold.

The reason gold gets away with it is that it inflates slower than economic growth (which includes growth in productivity aka technological improvements so it isn't really finite). Asteroid mining probably won't break that as it appears it will just be very expensive and therefore similar to other sorts of high cost mining, but other technology could.

I agree that 10% was/is unsustainable. I was one of the people who pushed for that to be changed (or to be more precise, I wasn't one who pushed for changes, but when changes started being discussed, I argued against 10% being reasonable to continue).

However, to be clear it was never going to be the full 10% for long term holders because of the way vesting anti-dilution worked. A portion of the 10% was to be borne by liquid STEEM holders (for example, exchange traders) as a sort of alternative to transaction fees. In practice by the time it was changed, inflation on long term holders was actually close to zero. It was an unnecessarily complicated and hard-to-understand system, which was itself enough reason to get rid of it. There were plenty of people who actually thought the inflation rate was 100%. The confusion alone was a good reason to rework things (and there were others).

[nastaverba]

On the one hand, the post seems a bit like a rage without any real reason. On the other hand, the author has some point, I mean this really makes sense.

Anyway, I use steemit to read and gather info, so I don't care about Steem power's price. There're so much promising coins, so I'd rather not mess with Steem in terms of earning money

[destinysaid]

Sorry if im opening an old thread, but ive been on steemit since march 2017, and since that time, ive noticed all the uos and downs, the schemes and whatnot.

I cant say its a pyramid scheme, @smooth is pretty much on track with all he has said, despite the seemingly large inflation rate and all that, the system operates below what i like to term "a crashing point".

I invested $0 into steemit, but through steemit, i have been able to earn enough to buy more SP, buy BTC, buy ETH and continue this awesome crypto journey.

Now for those that may be complaining about not getting votes,....... Steemit is a community, youll spend more of your days interacting with other people than actually writing articles.

Discord, steemit.chat, whatsapp, telegram, slack, Facebook, twitter..... You gotta have em all.

I believe any system can profit anyone, it all depends on how much youre willing to understand it.

Everyone is entitled to their opinions, but as for me, steemit is bae, it has its own problems, but like every system, proper maintenance is all it takes to keep things running smooth.

[qazgroup]

Although i like steem platform, i always wondered how they generate revenue to pay content writers and bloggers because there is no visible ads anywhere on their website, only paid thing i see is sponsored or sticky posts but that does not seem to generate any considerable revenue, i hope they will start being more transparent and publish monthly or quarterly report about platform revenues and expenses.

[FrankWatsonJr]

i dont see any transfer history odd

[destinysaid]

Although i like steem platform, i always wondered how they generate revenue to pay content writers and bloggers because there is no visible ads anywhere on their website, only paid thing i see is sponsored or sticky posts but that does not seem to generate any considerable revenue, i hope they will start being more transparent and publish monthly or quarterly report about platform revenues and expenses.

haha, its all open, its crypto, steem is ''mined'' by witnesses. See every action you take on steemit constitutes a transaction. Getting upvoted, flagged, posting, replying, commenting, all of it is a transaction on the steem blockchain. A set of transactions are collected together to form a block.

This block is then mined to ''release''  steem.

There is a set amount of steem available per day called the ''reward pool'' which is shared among content creators.

This is where ill stop, im not really into the technical side, but smooth should easily be able to answer you, hes been there longer than I

[yomarve]

if you did not invest in steem I don't think you should be bothered about this thread. No doubt you see tons of unreasonable post getting the big pay but then, some post do get rewarded which are not about steem or steemit.

[Traxo]

Update:

https://steemit.com/dlive/@anonymint/re-jerrybanfield-3ffc3520-426a-11e8-836a-b9befc1a6029-20180420t060218449z

[Classica35]

Your points seem very much valid. Lets' watch out. Everything will be unveiled very soon. It is good you have brought up this thread and you have created the awareness already.  I just wonder sometimes that how easy could it be to eran much dollars on steeemit. Ever since i started, i have not been able to cash out anything, not to talk of cashing out something reasonable.

[leea-1334]

Update:

https://steemit.com/dlive/@shoemanchu/re-jerrybanfield-3ffc3520-426a-11e8-836a-b9befc1a6029-20180418t025338211z

My personal disappointment with Steemit comes from its failure as a blogging platform. I started there earnestly in 2016 even before I came to this forum and really tried hard to make a reputation with original writing and patient blogging. Gave up when I kept seeing new accounts spamming with selfies and trash. And they get 3 times my reputation with hundreds of dollars.

Later I learnt some of the stuff posted here. How everything is just fake and made up and no one is really interested in great content. I have moved on. I hope others do too.

[filiparoxo]

The main reason for which I'm not interested into Altcoins anymore. I have been interested until a few weeks ago. Now I found out there are lots of scams with these Altcoins, so no thank you. Be cautious, guys.

[Traxo]

I'll repeat the post (most recent update) because initially I pasted the wrong link.
Replies are referring to this update:

https://steemit.com/dlive/@anonymint/re-jerrybanfield-3ffc3520-426a-11e8-836a-b9befc1a6029-20180420t060218449z

Also, point-by-point rebuttal was improved so those who read it before should re-read it.

[thuhoai1332003]

How do you figure? If the masses don't care how the backend works, they may not protest. The censorship could even be seen as positive by the masses, removing beheadings, etc.. And the occasional censorship of WeAreChange, etc may go entirely unnoticed by most.

Note please see my footnote edit in my prior post.

[hv_]

Maybe yours.org is the better option.

[nleenam207]

re. copyright, I don't know what the poster meant there. I took it to mean, for example, not ripping the photos and using them to print and sell calendars. I agree client processing of the blockchain is implied when you post it. Steemit already caches the images.