RE: STEEM Economic Changes Update (@officialfuzzy's thoughts & concerns)
One thing I very rarely see come up in these discussions is how will steem handle the growth of this platform. That's the main question anyone should ask, are the changes aligned with the growth of steemit?
Steemit's success is directly correlated to the rewards on this platform ( price/steem)
If the price per steem would be 10$ it means that reward on the platform would be roughly 100 times higher , so the average trending post would be worth about $20 000 .
A platform with high rewards attracts more people but more importantly if the price of steem is solid and growing it means the platform is sustainable and has room for growth. ( This is what every investors is looking for)
If we look at the current system, the high inflation works against the price of steem and as such works against the growth of the platform. The more coins are being printed the lower the price per steem and so the lower the rewards, even worst this process is exponential so it will be harder and harder to get a high steem price ( not market cap)
The new proposal however is totally aligned with the growth of this platform as it creates much better conditions for the steem price to grow (rewards on the platform), by reducing the inflation to 9.5% the currency suddently becomes attractive to hold. Also the fact that investors won't have to lock their steem for 2 years makes it a lot more likely that people will buy it.
In the future this inflation could be reduced a lot and even come to a point where the supply is actually going down ( this should be the ultimate goal, as we've seen we need the price of steem to grow organically to sustain the platform and handle the new users, when supply goes down the price can go up without any people buying more steem)
This can be achieve by burning coin, with the promoted feature, with advertisement, with steemit gold type stuff, or heros status,etc...
When you have a currency with low and decreasing inflation and intrinsic value, it is bound to go higher in the future. In these conditions many people will buy and hold the currency.
Before we can assume growth we first have to build something attractive enough to grow. Yes if there is more money flowing around then of course it's easy to attract people. At the same time, money isn't the only way to attract people.
Steem has a problem in that it put all the marketing into attracting bloggers, so now we got so many bloggers that the reward went down and down to a point where now it's no longer profitable to blog. So of course it's less attractive to blog now, but it's like with mining. The improvement of UX/UI can make Steemit more sticky and people will post even if they don't get much payout, but then there is the question of how to boost the market cap for Steem?
I don't believe there is any quick fix. I don't think changing the economics in this way will guarantee a higher market cap. So I see it as a very high risk change where the cost of failure is high and success rate is low. Success is not guaranteed like with restoring user funds after a hack or restoring accounts, where you know if you succeed the majority of the network of participants will be happy. In this case, we have no idea how people will react, or what the price will do, so it's a complete gamble. Why should I assume just lowering the supply will create demand? And without demand any price increase is temporary. Temporary as in it might last a week or a month.
Because people will finally be able to invest in steem without locking their money in a 2 year contract.
Some people want to be locked in a 2 year contract! That was my point. Not everyone wanted to day trade.
There is a security benefit to being locked in for 2 years. It means you can't be coerced into draining your Steem Power. The more you get rid of that the more attractive it becomes to thieves.
You can do that with the new changes too, even 5 or 10 years if you want.
Let me ask you one question
How much of your personal hard earned money did you invest in steem power? ( and if you have proof for it even better)
The reason I ask is because the perception of people who invest their money VS people who invest their time is very different.
People who invest their money want a return, people who invest their time are more likely to want power than money.
The problem is that this platform can't survive based on only people investing their time alone, to support the rewards you need investors that don't necessarily want to participate but want a ROI.
You have a point here. People should be extremely carefull with their personal info on a site like this, regardless of lock time period you could easily get a visit from thieves. Anyone with a large amount of steem/steem power that openly share his/her address/info on a site like this is an idiot.
Don't you see some people have a large amount of Steem Power? I mean I guess I don't see the benefit of forcing the change on people who didn't choose it. If you make it so people can choose a lesser Steem Power then that would be a better solution for people powering up in the future.