#BurnSteem25: A Solution to Inflation or an Unnecessary Sacrifice?

Over the last week, I've spent a lot of time making my way across Steemit as @steemcurator09, searching out content worthy of rewarding. In my search, I've found several things I plan on talking about over the next few weeks, but one thing that has stood out has been the #burnsteem25 movement.

I believe I first heard of the movement from @remlaps, but at the time, I had no clue that certain groups within the STEEM ecosystem require users to burn 25% of their earnings to win their contests—which I view as a bit extreme. To be clear, that's the act of making the @null account a 25% beneficiary of the post you're looking to join the movement with.

"The concept of token burningis rooted in basic supply-and-demand economics. When a portion of the circulating supply is permanently removed, the remaining tokens can theoretically become more valuable due to their increased scarcity, provided that demand remains constant or grows."

Why Burn STEEM?

The unique aspects of STEEM's reward policy mean the Steemit community will forever have access to the token even if they don't actually purchase it from an exchange. That also opens the door for an inflationary situation that could seriously devalue STEEM. One answer to that has been the #BurnSTEEM25 movement. But that movement is not without fault, as the overall act of burning a reward-based token not only seems a bit trivial but also wasteful to sections of the world where that 25% might make a difference collectively in years to come. Not to mention, a surge of new users coming to the platform, mixed with a loaded amount of rewards coming into play, could also drive the price of STEEM down into inflation hell, no matter how many people burn STEEM or not. It's one of the biggest dynamics of dealing with a rewards-based blockchain environment.

The Act of Burning Tokens

The actual process of burning STEEM reduces the circulating supply. Once you reduce the supply and add in a situation that has increased the demand, you hope it will lead to that price going up.

Burning STEEM and consistently powering up your account are long-term commitments that help reduce short-term profit-taking from the chain. On the other end of the spectrum, the #burnsteem25 movement could lead to whale accounts increasing their profile size while refusing to burn STEEM as the movement grows. Steemit’s governance model already allows users with more SP (STEEM Power) to have disproportionate control in terms of voting power/influence. Not only is it a potential catch-22, it's also no 'silver bullet' that will solve every issue, but it’s a step worth considering.

My major issue is that there are individuals on this site who participate in the contests because they're looking to improve their situation and maybe even learn some social/internet skills. Having them burn 25% of those earnings when they already don't get the TRX they're supposed to can be a recipe for disaster/mass power-downs if the users don't get their accounts where they want them to be within a certain amount of time.

In other words, there really are just as many good things about the program as there are potential setbacks. Potential in that there's also no guarantee that burning a reward-based token that automatically prints on demand, even in small increments, will offset the overall potential issue of inflation. In the end, it really comes down to what each user believes will improve the ecosystem versus users who don't want to lose their rewards in any situation.

While I continue to evaluate its long-term impact, I've decided that from now on, on the 25th of every month, I'll send 25% of one post to @null to participate in the #burnsteem25 movement and further signal my belief in Steemit’s long-term sustainability. After all, each of us is an investor here, and the overall goal is to inspire confidence from future investors in the blockchain.