There is a flaw in steemit but everyone is silent about it.

[snowflake43]

Sorry for the clickbait title but I have tried to start a discussion twice on steemit on the same subject with no luck so trying out here


Recently I was discussing with @smooth and he told me that the whales selling is a painfull necessary process to redistribute power. This is not true. First there will always be new whales so this process will never end.

Secondly  you can set up a system where as soon as people start powering down they stop receiving interest. This means that when whales decide to cash out, a lot of their interest is going to all the other users. The more whales power down the quicker the redistribution of power ( basically the same as today with a major difference which is that the price will not keep going down because many people will be incentivized to not power down )

Dan is trying to save the ship by creating a lot of small features ( promotion, option to be paid 100% in steempower, ) but this doesn't help because the people currently crashing the price are those who already have steem power and unlimited amounts of it.

Unlimited? That's right, the flaw is that even when you power down every week your balance is still increasing so basically people have unlimited money which means they have unlimited ressources to crash the price, so with this system the price of steem can only go down, it is basically design to go down. BUT the price reflect how many people can this platform support, the lower the price the lower number of people it can support, it is the indicator of the health of the system.
As we have seen the price of steem is designed to go down overtime because there is no good reason to not power down as your balance keeps increasing anyway, so how does steem expect to support all the new people in the future? It can't . Before trying to promote the site dan and the team needs to get the system right, as it is now it is contradictory and not sustainable.

You need to create some kind of scarcity feeling about steem power if you want to increase demand, and get a healthy steem market/price. The balance of people power down needs to decrease over time.

As it is now speculators have no reason to speculate because they know that unlimited supply means the price is going only one way and that is down, if you stop interest when people power down speculators will re enter the market because finally there is an incentive to stay in the system.Whales that keeps powering down for months will have their balance gradually go down which is normal.

But the system today where there is unlimited supply means the price will always go down and no one is going to buy it.

Don't listen to people who say that the only way to distribute power is to crash the price to pennies, this is totally not true and if the big whales and founder of the system don't push for a change then you know they have no intention to make steem a success, what I demonstrated above is not rocket science, if you have unlimited power to suppress the price the price will always go down and it will accelerate as more steem is being produced, anyone with basic logic can see that in its current form steem is not sustainable. Stop giving interest to people who power down and you solved both the price and the redistribution problem

I know i am repeating myself but this is a huge issue that is not discussed enough and I have no heard one reason why this shoudln't be done, so please tell me?

How do you support the system when it's price is designed to constantly go down? It's like the project aims at increasing user base but the underlying system aims the opposite..


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Above was the post that I wrote on steemit.  I read in this forum a lot of accusation of ponzi scheme. I don't know if I agree yet but what I can say is that it looks like the rich people on top don't seem to want to make steemit better otherwise they would have at least engaged in the discussion.
Hopefully I can find some steemians here that want the damn thing to work out so we can discuss these thing.


A MESSAGE TO THE WHALES: You might think that such proposal is against you but it is absolutely not. With the current system the money you are cashing out is gradually decreasing and will continue to do so. And you will only have a few months left to cash out until the price reaches $0,0001 and no ones want to buy steem anymore.
However if we remove interest to people who power down you won't have this rush feeling that you need to get out asap, the incentives will be in place to support the price of steem long term and you will have years to cash out and it will be at much higher price per steem. Traders will re enter the market which will create a positive feedback loop, the price is everything and dan has made the mistake to think that the price of steem don't matter as you can lock steem in SP to prevent inflation, this is totally wrong. The price of steem is equivalent to the capacity of steem to grow. In a way it's similar to the amount of capital a company has. A high price of steem means that more people will be rewarded on the platform which is essential to grow the user base.

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[albert11]

They will probably do it when the price is 0.001$.
Dumb people need to learn the hard way.
To me steemit was a ponzi from the get go.
I agree with your analysis though. When trading cryptos there is always a certain price point at which selling doesn’t make sense but with steemit it always make sense to sell due to the ever growing number of steem power




[Spoetnik]

Makes sense to me.. i figured it was rigged and badly from the start.

[Zer0Sum]

But the system today where there is unlimited supply means the price will always go down and no one is going to buy it.

Stop giving interest to people who power down and you solved both the price and the redistribution problem

The supply is not "unlimited", it's all in the White Paper...
STEEM inflation only last for 3 years or whatever and then tapers off.

You are absolutely right that there is a "redistribution problem"...
STEEM is being redistributed so slowly that it doesn't fucking matter.

It's not a "ponzi", it's a "bad investment"...
And it's usually perfectly legal to create "bad investments" and sell them to greedy retards... Bitcointalk = Retard Central.

They have been very open and have stats coming out the wazoo...
Steemit owns about 50% and 34 people own another 41.5%... so 35 people own 91.5%.

I got all my STEEM basically for free by trading, mining and rewards...
So I really don't give a shit what happens and am bored to death with the sick Whale Cult...
And the Pinhead Cheerleaders that populate a platform full of zero value amateur blogging...
I mean, what kind of person would eat a bag of dicks for $0.02 on Steemit.

But I don't think Dan and Company are evil, Stan is a fanatical Christian...
Can these guys really be this lame? Have they not thought this through? Are there no surprises in store?

Me, personally, I would hard fork a massive redistribution to the Top 1000 contributors...
That would create a dynamic community with actual skin in the game.

[DecentralizeEconomics]

But I don't think Dan and Company are evil, Stan is a fanatical Christian...
Can these guys really be this lame? Have they not thought this through? Are there no surprises in store?

Satan is a fanatical Christian

https://en.wikipedia.org/wiki/Antichrist

the Antichrist or false Messiah is generally regarded as a figure of evil that will falsely claim to be the Christ (Messiah).

[snowflake43]

But the system today where there is unlimited supply means the price will always go down and no one is going to buy it.

Stop giving interest to people who power down and you solved both the price and the redistribution problem

The supply is not "unlimited", it's all in the White Paper...
STEEM inflation only last for 3 years or whatever and then tapers off.

The rate of inflation is around 300% today and will stabilize around 100% in the future. Even at this rate people who power down every week will  have their steem power balance gradually increase. Something that keeps growing when you keep taking things out off is by definition unlimited which is the case here, people will be able to cash out every week and still have their steem power go up, that's unlimited.

[snowflake43]

when trading cryptos there is always a certain price point at which selling doesn’t make sense but with steemit it always make sense to sell due to the ever growing number of steem power




Exactly. The system forces people to sell at a price they don't want. When I asked a whale why they cash out every week he said "because if I don't do it others will", it's a race to get as much money out before the price is completely supressed. The whales are not stupid they know that the system in it's current setting is totally unsustainable, that's why they are cashing out. It won't ever get better because there will always be new whales who will do the same thing.



As I said in OP, if you stop rewarding people when they power down and reward people who don't. then everyone that invested long term will not power down, only the quick rich type of people will want out. This will allow us to get rid more quickly of these people which we don't want and redistribute power quickly.
The main benefit of cutting interest rate of people powering down is to support the price of steem, without any incentives it's going to pennies soon, at that point people will lose interest because the pay outs are way smaller than they were used to.

[Spoetnik]

All the dick-holster jiggling here at Bitcointalk boys don't change HOW IT ACTUALLY WORKS.

[snowflake43]

All the dick-holster jiggling here at Bitcointalk boys don't change HOW IT ACTUALLY WORKS.

I posted here because on steemit if you are not popular it's very hard to get any discussion going, it's kinda ironic that I went back to a forum that doesn't pay me for posting.

[bbc.reporter]

Being a "fanatical Christian" does not make you a good person. In fact it is the opposite most of the time. Historically Christians have also done many atrocities with the crusades and the inquisition and many more that I do not know of. Today there are people who believe that Christian based religions want the ordinary people remain ignorant so that would be easier for them to control and manipulate them. Disclaimer, these are not my personal views but from the ones I have read on the internet. I personally do not care.

Anyway for my on topic question. Could there be a chance that the founders of Steemit have miscalculated how much inflation they should give their system? Because it is obvious that they did not expect this fall to happen in a very short time. I speculate their real aim for this experiment is to have a smooth and slow trend up for Steem.

[snowflake43]

Anyway for my on topic question. Could there be a chance that the founders of Steemit have miscalculated how much inflation they should give their system? Because it is obvious that they did not expect this fall to happen in a very short time. I speculate their real aim for this experiment is to have a smooth and slow trend up for Steem.

The inflation is not really the problem, the problem is that there is no incentives to stay in the system. Inflation could be increased to 1000% if the incentives were right most people would still not cash out. People don't rush to cash out if they are guaranteed to be able to do it in the future at a good price. Bitcoin is a good example, so many people just holding for years because they know the price is solid.

The reason the price is going down is not inflation, it's because most people have realized that their steem power balance is unlimited, it will always be higher regardless of how many times you cash out and so the price of steem will always go down which means steemit can't grow which is why people have no confidence in its future.

The founders could reverse this negative feedback loop by cutting interest of power down balance but they don't , go figure...

[snowflake43]

@bitcoinjesus2.0

Why does percentage stake matters to you? People care about how much their steem power is worth, they don't care about their percentage stake, your stake will decrease regardless in the future when new people come in.  If VEST were tradeable on the market it would be a different story but they are not.

[snowflake43]

@bitcoinjesus2.0

The price of steem represents the value of the company.
As demonstrated above the price of steem will always go down so your stake in the company will always lose value.

>The greater percentage stake I own in the company, the more of the daily payout I can get by voting for myself.

Your point would be valid if the price of steem was growing faster than the dilution from new people coming in. You would need a miracle for that to happen.
Since the price of steem will always go down the amount you will earn by upvoting your post will always decrease


[snowflake43]

Anyway for my on topic question. Could there be a chance that the founders of Steemit have miscalculated how much inflation they should give their system? Because it is obvious that they did not expect this fall to happen in a very short time. I speculate their real aim for this experiment is to have a smooth and slow trend up for Steem.

The inflation is not really the problem, the problem is that there is no incentives to stay in the system. Inflation could be increased to 1000% if the incentives were right most people would still not cash out. People don't rush to cash out if they are guaranteed to be able to do it in the future at a good price. Bitcoin is a good example, so many people just holding for years because they know the price is solid.

The reason the price is going down is not inflation, it's because most people have realized that their steem power balance is unlimited, it will always be higher regardless of how many times you cash out and so the price of steem will always go down which means steemit can't grow which is why people have no confidence in its future.

The founders could reverse this negative feedback loop by cutting interest of power down balance but they don't , go figure...

They don't need to, the 90% deflation event (every 3 years) takes care of that.  Accounting correctly for this blockchain protected fact, you are complaining about 10% annual inflation... Yawnnn.

The event every 3 years is not a deflation event it's a reverse stock split, this changes nothing on how the system works or inflation rate, people would still be incentivized to sell and the price will still go down.  

I never complained about 10% annual inflation. I actually said that inflation is not even the issue. Maybe read my post next time?

The important metric is not inflation as those coins are locked anyway, it is the rate of SP going out. This rate is constantly increasing.

[Febo]

Being a "fanatical Christian" does not make you a good person.

lol exactly. Many are afraid driving on bus with people in hijab just become soem "fanatical Muslims" decided to blow themselves from time to time. After all this media I am not sure how can be some people that takes fanatical religionists as good people.

About Steemit. It is just badly planed. But so far looks good. Well they had good start. Maybe they still flow on that good start and will slowly sink.  And STEEM price is still way to high. it decreased only 5 times so far with will at least 10 times more. At some point it will stop.

[Azael]

I always figured people from Steemit being quiet had something to do with the fact that they are unable to withdraw the money they made from shitposting unless more people sign up and post or pay or something like that.

[Reid]

Oh here is another one. Thanks for the warning. I have read something like this also from here but I dont see it now. Is that you also?
You are doing a good job saving some people. I hope your efforts will not be in vain.

[snowflake43]

The event every 3 years is not a deflation event it's a reverse stock split, this changes nothing on how the system works or inflation rate,  

Correct, you're almost there... In a reverse stock split the total amount of shares is "deflated" or "reduced" but of course, your percentage ownership at the time of the split remains equal and the inflation remains the same.  What you fail to consider is the well known fact that the inflation rate three years from now will be much lower than it is now.  

I never complained about 10% annual inflation. I actually said that inflation is not even the issue. Maybe read my post next time?

Chillax Pointdexter, I was just joking.  Nobody in crypto would ever complain a coin whose inflation rate is similar to that of the king's (BTC).  I just wanted to see if you were paying attention, and it appears that you are, so I will continue to teach...

The important metric is not inflation as those coins are locked anyway, it is the rate of SP going out. This rate is constantly increasing.

OK, yes, SP is where the inflation happens, but what do you mean by "SP going out"?

Do you mean the rate that people are powering down and dumping is increasing?  Becasue I just picked one random Steemit user, and he recently stopped powering down.  

https://steemit.com/@steemjesus/transfers

@bitcoinjesus2.0, the rate of inflation will be 3 times lower , even at this rate people’s steem power will keep growing regardless if they cash out every week or not.

Someone who have 17000 steem power earn about 100 steem every day, that’s 700 per week
That sam person will be able to cash out 160 steem every week.
That’s with the current settings.

Now assume that the rate of inflation is 3 times lower then you have to divide 700 by 3 which is 233.

So as you can see even with the planned inflation rate of 100% in the future ( 3 times lower than now) , your steem power will give you 233 every week but you will only be able to cash out 160 so your balance will keep on growing.

Regarding your second question, yes I mean the rate of steem power being converted back to steem.

The fact that one user powered down is irrelevant, what you need to understand is that everyone’s steem power balance is growing every passing day and so every week everyone can power down more steem than the previous week, this creates a system where the ressources to kill the price of steem keeps increasing.That’s the reason why steem badly needs a mechanism to disincentivize people to cash out by rewarding those who stay in the system and by punishing those who don’t. Punishing is actually the wrong word here because its normal that the balance of people who cash out go down , what is not normal is the current system where  people can cash out to infinity.

[chryspano]

@snowflake43

Every week you are powering down even more STEEM than the previous week.

ALSO the amount of SP you gain from "interest"/"inflation"/"whatever" becomes lower and lower week after week. In the end of your 104th power down you will end up with ZERO STEEM and earnings, PERIOD.

[snowflake43]

@snowflake43
 In the end of your 104th power down you will end up with ZERO STEEM and earnings, PERIOD.

HOW? 

I just demonstrated above that even when inflation is back to normal ( 100%) that people's Steem power will still increase when cashing out every week.

Please show me your math