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RE: Post-Hardfork Steem - Calm Before the Storm?
The platform can't work until theres better distribution, and there can't be better distribution unless the price goes way down
This is a misconception. The distribution problem is a perpetual one, even if we had a perfectly even distribution today , the issue still wouldn't be solved as the power would concentrated as price rises.
Regarding your price prediction, I doubt many whales would sell under 10 cents, unless they really need the money now or believe the price will not be higher than 10 cents in the future ( which is extremely unlikely)
No, its not. It isn't about more "even" distribution, its about having a sufficient number of major stake holders so that 3 or 4 people aren't deciding rewards by themselves, and we can actually benefit from the wisdom of the crowd. Until there's actually an opportunity for real investors, and not just ninjas, to have a real stake for a not insane amount of money, steemit, and the price of steem will founder.
And because steem is just so super awesome, when the whales decide that they want the price to be more than 10 cents, everyone will just line up to buy from them at whatever price they want.
Or, people won't be willing to pay, and we'll see exactly what were seeing now. Sluggish volume, low demand and steadily declining market price. Spoiler alert. Its the second one.
You seem to have the notion in your head that this is a sellers market. It isn't. What price the whales are willing to sell at is irrelevant.
And that number will be more and more insufficient as price and number of user rises. Which was my initial point.
Those with the most steem dictate the market.
Yes, and as i said originally, its not about "even" distribution. Its not about what percentage of the user pool controls what percentage of the steem power. Its about getting enough significant stakeholders so that 5 people don't control more than half of the steem power. 100 people controlling half of the steem power, or 500, is better than 5. Even if that 100 or 500 actually represented a far smaller percentage of the user pool than the 5, it would still be better. Especially if they were real, non-ninja investors.
That said:
If the number of users was rising (its not), then a higher price would be reasonable for the same stake. If steem had the same number of active users as facebook, id pony up the $500K to be the next smooth in a heartbeat.
That is to say: yes, if the number of users goes up, the price of steem will probably go up, but since the reach of the site has also gone up, then investors will be willing to pay a higher price for the same stake.
SO no, it wont always be a problem. It will only be a problem for precisely as long as steem overvalued enough so that no rational person would want to spend the money to have a significant amount of influence.
So how are they going to force people to buy steem? Theyre not. Theyll put asks on the books for (according to you) more than 10 cents, and theyll just sit there on the books and not get filled.
This ridiculous notion that people have to buy steem even though there is no rational reason for them to want to is a big part of the reason why were down about 98% from july. The pepole with the most steem will only get to dictate the market if they participate in the market. And theyll only get to participate in the market if people are willing to buy what theyre selling.
Also, if what youre saying was true (its not. In fact, its patently absurd) then the whales, those with the most steem, have dictated the market from $5 to .13 cents. Which seems kind of contrary to their interests.
100 will look tiny when hundreds of thousands of users use steemit. So in terms of problem solving we are back to square one.
And what happens when the bulk of the users pay a higher price for the same stake? The early adopters become the new whales and so we have the same distribution problem.
Gaining influence is not the only incentive to want steem power, financial incentives are also a big part of it. Also upvote value increases when the price increase, for these reason they will buy steem power at any price, if they don't the project would fail anyway as rewards would go down while user base is still growing.
As I said above influence is only one incentive, many people buy steempower to earn profit with curation rewards. A good curator with $ 10000 stake can earn $200 per month doing nothing just by running a bot, this is arguably the main reason people are buying steem power.
We are down 98% from july because the whales decided the price was overvalued, simple as that. There was just too much pressure from them but don't assume there was no buying. If the price went to $4 in the first place it means there was buying.
Sorry I meant to say people with the most money dictate the market . So yeah the whale have the most influence in the market because they can move it both ways.
They can't force volume, but they can maintain price. If people don't see the point of selling below 0.05, then the price just won't get to the 0.01 that might be attractive to many buyers. It will stagnate at 0.05 with few sellers and few buyers. i.e. low volume. That's actually what we've been seeing for a long time, but with a more or less steady declining trend. There is, however, no guarantee the declining trend will continue or that the price would ever get low enough for you or others like you want to make large purchases.
This is why many coins, even almost completely worthless ones, almost never go all the way to zero. They get stuck with existing holders unwilling to sell, buyers unwilling to buy, and volume cratering.
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What happens is that there are more users/investors each buying the same stake for higher prices. Previous holders are willing to take profits on a portion of their stake so they own less stake (%), although the value of that stake may still increase. The distribution flattens out from both sides.
That's why demand-driven high prices are better for distribution than low prices. Low-ish prices generally lead to either volume dropping off to next to nothing, in which case stake distribution is largely locked in place, or most holders dumping while a few true believers or pumpers accumulating all the stake at low prices (in which case distribution gets worse).
Whales would be happy to sell at any price (down to some minimum where some whales will feel they might as well just hold on and hope for the best), and happier to sell at higher prices. The primary reason we are down 98% is that there isn't demand to buy. The site (and blockchain platform) isn't growing, isn't large in terms of existing (or remaining) user base, and doesn't show all that much visible promise in terms of development. Maybe that will turn around at some point, maybe it won't.
The thing is that adoption takes time, most users will probably start using the site when the price is already very high. This creates a problem where there isn't enough whales to upvote all the content which will be spread a lot and in a lot of different languages. Add to that the fact that late adopters will clearly be at a big disadvantage, imagine if the price is 100$/steem when people adopt it, it means those people will have to pay a 1000 times higher for the same stake, so you would have to be very rich to get any kind of influence and so we are back to square one.
I have noticed one thing is that there is even less buy order than before the fork, I think people are waiting for the price to go lower, they don't want to be dumped on by the mega whales.
It's crazy to think that litecoin or other shitcoin have consistently much higher volume than steem, I mean these coins do nothing, steem is really a great innovation, with lots of community support, I don't think developement is the issue because there are some very nice project like busy that are coming.. I think either the FUD campaign made by bitcoiners early on really worked well or the hyperinflation discussion scared people away or it is a perception issue ( if I can post to earn steem why the hell would I buy it kind of thinking) or simply a lack of understanding how it works.
I have invested a bit in steem mainly because of busy, I bought just after their annoucement. I think steemit.com is not really friend/family friendly, not enough privacy and many missing feature. My hope is that busy becomes a central hub with a busy app store ( steem based app) a marketplace and chat. I think people will start to realize the potential of steem when busy launches. We will see, I personnaly am willing to take the bet and buying all the way down :)