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RE: An Open Letter To @elipowell

in #busy5 years ago

As selfless as this proposal may seem, its disastrous consequences outweighs its benefits. Delegating 5k SP to 1k accounts simply means that Steemit Inc will have to delegate 5m SP in total.

Over a period of 3 months, 5m SP will generate thousands of free Steem that many beneficiaries will throw at the exchanges, crumbling the price of Steem in the long run.

Also, those who get the 5k SP will no longer see the need to buy Steem. So, with more people earning Steem with less number of buyers, Steem is doomed economically.

In as much as I would love the delegation, the economic impact it will have on Steem will be catastrophic.

If this proposal is implemented, I will sell all my stake in Steem to avoid the apocalypse.

Going forward, let users pay for their SP and delegation. They won't die. And that will grow Steem and add value to Steem.

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Tsk Tsk... Holy Moly Shazam!

Can't you see yet that while thousands of little fishes may well not buy Steem because they can't for multiple reasons and most probably they actually could sell whatever tiny crumbs they earn here. Even 100.000 of them selling daily their rickety 2 cents collectively it wouldn't be not even a hundredth part of what an opulent whale are selling now in one fell swoop?

Yeah! now tell me again about which of them would cause the economic impact it will have on Steem to be catastrophic.

It seems you do not grasp the network effect, and how distribution creates markets, which in turn creates capital gains. It is the concentration of stake in but a few accounts now which is preventing the price of Steem from rising to reflect it's actual value as a token, and the failure of distribution to increase the stake of new accounts that deprecates Steem social media to the point that user retention is a miserable 7.5% YOY.

Growing the society using Steem is the best way to increase the price of Steem, and the FAANGs have proved that social media is the most profitable business model extant. It is taking enormous profiteering pressure to suppress the value of Steem and it's social media business model. Whales are currently extracting ~90% of the rewards, and EIP is about to more than double their share of the remaining ~10% - plus whatever the downvote pool allows them to take another run at after they flag the rewards back to the pool.

Nothing would be better for the price of Steem than vastly improved distribution. As has been pointed out even if Stinc delegated out all of it's stake to minnows, and they sold every bit of rewards they earned with that delegation, it wouldn't equal the sales from one whale right now. You must not realize the degree to which stake is concentrated on Steem, because you aren't seeing how negatively that centralizes what is touted as a decentralized platform.