What is the point of powering up? To gain more influence in the site, correct?
How much SP do you need in order to actually make a difference though? 10M vests? 100 MV? For a user to influence the payout of a post more than a few cents, they need to have tens of thousands of dollars worth of SP. The average user is not going to make that type of investment, no matter how awesome they think the site is!
To a user like me, the next best thing is to try and climb the ladder. Lots of users are interested in climbing the ladder, but it is a very steep hill to climb! Powering up $10 SBD here, and $20 SBD there - barely makes a dent!
If I have $500 SBD, what would I be better off doing? Cashing out the $500 and buying myself something nice, or Powering Up, and maybe adding 1 cent to my influence on Steemit? This is bad math for a potential investor to be looking at! Most users are going to take the $500 cash!
To add one more thing to the mix, what happens if the price of Steem reaches that of Bitcoin, or even passes it? With millions of Steem coins in circulation, do you really think that an average user is going to invest any money to buy .5 Steem, to gain only .001 MV worth of influence? (This problem only gets worse as the price of Steem gets higher!)
If we look at the potential investor pool for Steem/it, where do you think the biggest potential for investment comes from? Landing 10-20 huge investors who are going to buy up 100k BTC worth of Steem, or millions of excited users powering up $200-$300 SBD worth of Steem?
I think the millions of excited users has way more potential!
The problem that we have to solve is that powering up small amounts of Steem needs to become more attractive. There needs to be more incentive than just a tiny step in a climb up an insurmountable mountain. Investing a "little bit more" should have a big enough effect to make it "worth it"!
I do want to be clear, that I am not proposing we change the reward/influence structure for Steem. The formula for rewards/curation was defined in the white paper, and changing it would not only be unfair to the original investors - it would completely disrupt the very foundation of Steem/it. We should not be considering changes like this.
What we do need to do is think of more ways to make powering up and acquiring small amounts of Steem Power more attractive. Ideally these could be structured in such a way that climbing the $10 -> $5000 range of SP investing becomes more fun!
Here are some ideas of ways to add value to powering up small amounts of SP:
- An icon similar to the reputation number next to the user, that shows how much SP they have vested
- Entry tokens into a daily lottery based on amount of SP (suggestion from @bendjmiller222)
- Unlock new features in the editor such as surveys/polls (idea from this post by @intelliguy)
- Avatars once you reach a certain amount of SP (idea from this post by @demotruk)
- Highlighted posts once you reach a certain amount of SP (idea from this post by @demotruk)
- Allowed in to chat rooms that let you promote posts once you reach a certain amount of SP
- Allowed to use certain tags once you reach a certain amount of SP
- A tab that shows active posts shorted by the amount of vests the user has
Can we think of more? What are additional ways to make powering up small amounts of Steem a more attractive investment?
how about dramatically increased voting power $$ value for a short period of time after powering up, so if I power up $100 then my next 10 votes is worth $10 each for 48 hours.. or something like that
Its an interesting thought. Changes to the payout formula are going to be quite difficult to make though. Most of the people that are already heavily invested (and have the most voting weight) would prefer stability over a change like this. I can also think of at least one way to game the system (large SP holders powering down, then powering back up).
steemit is in beta, anything can be changed, something like that would only exist to encourage new investors who buy steem power, not investors who power down. Google adwords sends me $100 vouchers every 3 months, but it only works for new accounts
Yes all it does is make it easier for the ones with the $$$ to game the system which is already the problem we have!
I know this is a very old post, but I just saw it, and wondered whether the kind of sparkline I've just added to my project might be helpful?
For this purpose, maybe we could show the shape of an account's SP value over time. If they were recently powering up, this would be shown and possibly add more credibility.
That’s pretty cool!
Hey @timcliff, why not just tweak the algorithm to give more influence at lesser Steem and less influence at more Steem? Or is that what you mean by going against the white paper? Kind of like the $3 you can donate to presidential campaigns when you sign you IRS tax return. That's supposed to go to all candidates so the little guy at least has something to start with in campaigning. It's recognized that it isn't really a just system when someone who hasn't been climbing the company ladder called politics might be the best candidate but doesn't have a prayer without hundreds of millions in backing, which in turn attracts more backing.
If you could have more influence by having a smaller account, the people with big accounts would just split them into a lot of little accounts.
Sure, but there's a solution to that. It's called One Man, One Account. There really is no rational reason that I can see for people to be allowed to have multiple accounts, unless there's no way to get to OMOA without giving the government too much information. I wouldn't be surprised though if the gov. couldn't invent an algorithm that studies writing styles and figure out who's who. Or watch the flow of assets and see who's connected to whom.
But, let's say a whale split his account into a thousand little accounts. He's then lost his ability to market himself as a unique person and brand so not sure many would be willing to do that.
I think we need to get more creative. Maybe even offer big bucks to hire some Google developers who seem to do a good job of quantifying the "authority" of a content provider. Google is the 800 pound gorilla in search because they early on did the best job at providing search results that came from content providers who were authorities on their subject. If Steemit Inc. was on their game they would figure out who actually knows what they are talking about (like Google does), and figure out what any given person is interested in reading (like Facebook does), and provide a better social experience. With a ~$300 Million stake in SteemPower @steemit really has no excuse not to hire a small army of programmers to get that done. And preferably before someone else comes along and does it first. Like @dan who's looking for a test platform for EOS.
Steem is not one person one account. What you are talking about is theoretically possible, but it goes way beyond simply “tweaking the algorithm”.
Sure, but Steemit Inc. has how many millions of dollars at their disposal to accomplish these things?
https://steemit.com/smt-oracles/@ned/the-smt-oracles-whitepaper-call-for-academics-modelers-and-deep-thinkers
What's the takeaway I'm supposed to get from this, before I wade into it?
timcliff at this time 3000 SP is worth about 1 cent 6000 about 2 cents . But as the post I'm voting on is worth more as an example I just voted on yours an I gave you 0.37 cents your dollar amount went from $86.47 to $86.84 but most of my voting is only worth around 2 cents . My point here is why invest $1500 at todays prices to get 3000 SP to influence a post by 1 cent .
Agreed! My vote used to be worth almost 0.50 cents and I was way excited. Now it's worth only 0.08 when it used to be worth 0.12 quite recently.
It makes me much less excited about the site now. I have over 30,000 Steem power, and my vote means so little.It was nice throwing people a "quarter" with my vote.
I just upvoted this comment and it went from zero to zero. I suppose after 7 days nothing happens? I think such a short window discourages content curation. Really good content should be gathering support years down the road. Maybe that's a more fair way to encourage quality: give only half of the reward in the first 7 days and the rest over the next 90 days.
The benefits you propose should be tiered, always promoting users to get to the 'next' level and should be tied to the value perceptions of Steemit.
So, for example, the more SP you have, the longer your posts stay on the Top 'category' chart. (this would require we had top-category charts), or something similar. Longer visibility means more potential for voting, therefore more potential gain. So the implied perception is that investing in SP may pay off with more votes in your posts.
What about showing/paying out to the 3rd (or 4th) decimal place. This would be strictly a perception change. Not requiring any real change of the monetary system which is in palace. Instead of $0.00 not changing after your upvote, showing $0.001 (or $0.0001 might motivate people, as they realized they did move the needle, even if a very small amount.
Good suggestions!
I've been curious if the functionality for more decimal places is built in or not. I think it is definitely needed. I agree it would already add a "scoring mechanism" and some progression that minnows don't get even now. It becomes much more important if we get large influencers on the platform publishing content that may gobble up the lions share of daily rewards. More decimal places are also inherently needed to deal with a hopefully increasing value of steem as well as the reverse splits that will regularly occur. Interest, content, and curation rewards should all pay out in very fractional amounts if the system can handle it, so that everyone makes incremental progress with their interactions, however minimal.
very good idea @mrosenquist, i like this idea very much indeed. Yes we need to see everything, even the so called dust !! brilliant, this would give the minnows a feeling of voting something up and seeing a small return and at least a vote that brings benefit to others. Is this possible in the economic model set up already in Steemit ??
The influence of a single account should be capped to about 1/10000 of the combined power of all users AND the payout of a single post should be capped to 1/25 of the total payout. This would remove some of the reasons for holding a huge account, and shift the benefits of aquiring more power to a bigger audience. This would motivate people to power up and buy SP, helping also the big whales gain more capital gains.
Awesome list of ideas at the end. I couldn't agree more with your post. I originally bought $350 worth of STEEM to power up not realizing how little influence that had. Realizing you need to have tens of thousands of dollars to have any real influence has left me wanted to cash out anytime I make a good post. If there were better rewards for those in the $100 to $1000 range i would be all for investing again :)
Yes, I'm looking to scrape up $100 to invest, largely because I'd hoped doing so would give me a tangible difference in curation rewards. But to see it explained this way makes me not want to bother - either investing or curating. Curating/upvoting seems hopeless and pointless now that i understand it better. I might still invest $100 here and there for speculative purposes, but I was thinking it would also pay in curation rewards. Yes, a tiered system to motivate people at $100 - $1K is a greatly welcome idea!
Yes. If the price goes that high, who wouldn't want vests that gibe you 250% interest rate per year on steem.
You have to remember that steem is being mined constantly, with the price going higher up this would mean that even small fish now will give out good rewards to posts in the future and the daily reward pool would be worth a lot more $ than it is now. With early investors having powered down and the holding of vests having been distributed more evenly towards more accounts, I can see this being a good possibility of the price per vest or steem going that high.
There is truth to that. In addition to the "influence" reason for investing, there is also just regular speculative investing - hoping the price will continue to go up (or at least not go down at a rate faster than the SP interest rate gives out). There does need to be a buyer for every seller though, and at some point the price will become high enough that the risk vs. reward will not encourage more speculative investors to buy back in. Then it will go back to needing more "influence" type buyers.
And another important thing is, that as an early investor (and it doesn't mean if you are you investing your efforts or your money), you are really leveraging the low prices and lower reward pool actually means higher potential rewards.
How? Right now the price of STEEM per USD is about 0.5, give or take. That means, that of that amount that is shown next to your post pays about double of the number in SP, compared to the time when price of STEEM is $1, or 4 times if the price is $2, etc. While the liquid rewards are lower, the potential rewards are great.
I think people already went through adjustment on how they perceive the payouts, because there was a lot of grumbling about the numbers going lower, with the price of the pot decreasing with the price of STEEM, so I'd rather be paid $100 now, than $200 back in July, because my SP rewards are quite a bit higher.
For sure! I actually wrote a post about that :)
Down Down We Go – And why that might not be a bad thing
Yep, but I think that not most people realize that, so I am spreading the word. 8)
Indeed! Its sad to have seen voting activity decrease lately just cause of a falling price. But rewarded be those who took the opportunity to gather more SP during that time instead.
Well, I try to vote regularly, as for posting, yeah with autumn in full swing it is a bit hard to gather the energy to do a post a day at least. Even with quite a bundle of posts in the making, because of some other commitments. Hopefully, it will be over in a day or couple, and I'll be able to get to steeming full power. 8)
I feel the same way. Wish I could spend more time and energy on making posts on steemit :)
I vote everyday, why not ? Its why we are here no? We need to keep the Steem flowing in this ocean.
The entire reward fund is currently about $25K per day. Assuming a completely flat system (which this isn't, for good reasons), someone with 0.01% influence would have about $2.50 to dispense, spread across 40 full power votes. Now at current prices 0.01% ownership is about $8000. So, no, it isn't terribly realistic (nor will it ever be) for small SP holders to expect to be giving away money like Halloween candy. This will flatten out a bit as the largest SP holders continue to power down, but realistically "voting" means your vote gets counted along with other voters and that (and not your vote alone) is what allocates rewards.
The numbers you provided are very helpful. Thank you. It is a good frame of reference to understand the (estimated) influence associated with a particular sized investment.
The point you brought up is a really good one too, in that one should not expect to have much influence with a small amount of SP, based on the total vested amount across all users, and the size of the reward pool.
I do think that makes the case for my suggestion though, in that users need more reasons besides "influence" (and price speculation) to power up a small to medium sized amount of SP. If $500 worth of SP buys you so little influence, then why not keep the 500 bucks instead of powering it up?
The main reason to buy SP is that you expect it to go up in value (longer term). The rough analogy is SP being similar to buying a stock. When you buy stock you get to participate in shareholder votes, and you might also get other benefits (for example some companies offer discounts to shareholders). But the main reason you buy the stock is because you think it will go up in value.
In the stock example, if you were to hypothetically buy 100% of the stock of the company - you would own the company. Assuming it was making a profit, all of the profit would be yours. Even if nobody else wanted to buy any of your shares, you would still own the company and be entitled to all the profit.
The difference with Steem is that regardless of how many 'shares' you own, if there is nobody to buy those shares from you, there is no intrinsic value behind them. You don't really own anything that is making a 'profit' besides the coins themselves.
As long as there is a buyer for every seller though, then the currency has value. Arguing the other side - one big thing that makes Steem different than shares of a company, is that it can also be used as a currency - similar to Bitcoin, and currencies have value. As the currency is accepted by more people, they are assigning value to it. By accepting it as a form of payment, they are essentially willing to 'buy' the coin - in exchange for whatever goods and services they are willing to provide in exchange. This basically ensures that there will be a buyer for every seller - which is a good thing for the coin.
The responses I have gotten from this post (including yours) have been interesting. There have been lots of people arguing for changes in the payout formula (which I am fairly strongly opposed to). Pretty much everyone who has provided a reason to buy Steem is saying the same thing as you. You buy it because you expect the price to go up. That seems to be the main argument in favor of buying Steem.
There are going to be speculative investors. There are going to be marketplaces opening up that will accept Steem/SBD. Both of these things will add value to the Steem coin. That is a given.
There is potential to do so much more though!
Assuming Steem/it takes off and becomes as big as everyone hopes/thinks it will, there are going to be millions of excited users. Some of these users (I would argue a small amount) will invest in Steem because they see it is a good investment. There are not that many "investing" type users though.
On the other hand, tons of people dump $20, $50, $100 into all kinds of online games that they play (Candy Crush, Pokemon, etc.). Steemit is a game. If there is enough of a motivation to "play", and advance by paying a bit out of their pocket - a lot of users will happily "invest" in order to advance in the game.
With the right incentives (outside of the payout/influence formula) to power up and earn/buy more SP, we will tap into what I believe is Steem/it's biggest potential investing market - its millions of active and excited users who want to play and win the game.
I actually came here with an upper 5 figure amount to invest, but .. As you can see by the comments of the community as a whole and whale comments here. I am just not sure how or why anyone would invest. I tried to help some friends sign up today, when there were problems, I looked for help..... I don't know what to say, but
Well, in my personal opinion I do feel that Steem/it is a good long term investment.
There is a lot of potential here, and I think the owners + developers are doing things right and taking the site/community in the right direction. I've interacted with Dan/Ned/the dev team regarding the wish list, and I think everybody is on the same page as far as where we want the site to go.
People/investors need to understand that this is a long-term project, and what you see today is not the final product. They are going to make significant improvements, fix most of the issues that people have with the site today, and add a lot of new features.
In this post that I wrote on the price of Steem, I talk about the fact that the site is not setup for minnows right now. They had their "whale" recruitment, where the initial round of investors/miners got in very early. Right now, they are in their "dolphin" recruiting phase. It does suck for minnows, and I believe that minnows will be the most important demographic for the site - but at the moment, minnows are not the focus. Dolphins are. They do plan to make the site way more minnow friendly, but that is not the focus of today.
I think the main two things you need to look at regarding potentially buying in (especially in a large amount) are:
Obviously you need to make the right decision for you, and Steem/it is a risky investment. I would not recommend investing anything that you wouldn't be comfortable loosing.
If you are comfortable with the risk though, and you believe in the potential Steem/it has, then there are good reasons in favor of investing.
SP can't be used as a currency, for obvious reasons, and, really, STEEM can't be a very good one either (due to the very high inflation rate).
So it has to stand as a sort of "stock" (obviously not a literal equivalence). You make good point about not making a profit, and indeed this is one of the real problems that some investors have with buying into STEEM/SP.
If it can't be used as a currency, and it doesn't make a profit, then why should you buy it? If you figure that out, please let investors know because most can't come up with a good reason (beyond selling to a "greater fool").
Exactly! That is the sentiment of most potential investors right now.
I do feel that there is legitimate potential for speculative investors to make money by investing in Steem/SP. Most likely (in my non-professional opinion), the price of Steem will go up if/when the site moves out of beta and (hopefully) becomes more mainstream.
At some point though it will reach a point where there are no more speculative buyers left to push the price higher. Ideally it could reach an equilibrium where the price remains stable enough for the SP holders to beat out the inflation with the SP interest. This I think is the best argument in favor of "speculative" buying.
There are two potential game changers that Steem/it could implement - which would add significant value to the investment. One would be to tap into the "game" portion of the site, and hopefully get millions of people to power up (mostly in small amounts). The other way would be to find some way to commercialize on Steem/it in some way, such that the holders of SP would have the potential to be making some type of profit.
Well gamification of the Steem Power is great, assuming it's not overdone. But the actual reason why anyone should power up firstly and foremost is for personal gain and I'm not talking about up voting yourself, I'm talking about seeing that 500 steem you bought at 0.25/1 grow to 1200 over a course of a year and start a power down when the price is 2.00/1, It's speculation for the most part, but a "game" some like to play, me included. I personally don't believe that I'll become a "superhero" here on Steemit in the next two years, but who knows, no one can predict the future,so neither can I.
Besides this there are many other reasons why would someone invest, I'm investing for the most part because I love Dan's vision on this, after much informing, reading, spending day/night here on Steemit consuming information like a black hole consumes light, I've accumulated so much information that I can really see the bigger picture, the picture that stretches far beyond Steemit and Steem as well, I don't wanna spread false information so take the following with a grain of salt, but this right here, could be something that would be a major historic part one day, if not as the one who succeeded, but the one who was the first one to attempt it.
TL;DR
Invest in Steem Power not for influence, but for possible personal gain.
I agree there should be more incentive. I would be withdrawing the money
You are basically talking about badges?
The "how much SP they have vested" icon could be implemented as a badge. I think the suggestion of badges is a lot broader topic though. For badges, you could get one for "50 followers", "100 posts", and all kinds of other things too (in addition to the amount of SP you hold). I'm strongly in favor of adding badges :)
Or "achievements" for posting rewards, curation rewards, curation reward per steem power records, etc.
Really good and informative post. As a new member I still cant figure how some people can earn 4 figure sums and some like me none.
There are a lot of factors that go in to how much a post pays out. Having spent a lot of time gaining a following is probably one of the biggest factors. Who is following you makes a big difference too. (One upvote from one of the top SP holders will add more to your total than hundreds of votes from 'regular' users.)
The quality of your posts makes a big difference too. Whatever you write needs to justify whatever upvotes it will ultimately earn. The topic needs to be interesting, the subject and thumbnail need to capture attention, the post needs to read well and keep the reader's attention. Most importantly, the reader needs to feel at the end that they got something of value by reading your post.
If you do all of that, and you do it consistently over a period of time, then you will slowly build your reputation and gain more followers. This will lead to higher rewards for your posts in the end.
I like the idea of badges for number of followers or/and posts . Much easier to understand than the numbers set up.
Thanks for all the suggestion and the summary of the ideas. I was looking for ways to keep newcomers more engaged.
All the discussion here is centered around Steemit. That's all great but I'm curions what you think applies when we think about other apps that are supposed to plug into the Steem blockchain?
Yeah, it's a really great question! I don't know. I suspect that they will add more value to Steem. I am really excited to see what all develops in the coming months/years :)
Have thought about it a few times. And it is difficult to change because of the way it was set up to work.
One account one vote, but that could make the big SP owners Power Down. Allthough 90℅ of the available Steem created by the network allready is divided amongst the Steem Power holders.
This way curation would be decoupled from Steem Power. And the Steem Power owners would be pure investors. For which they constantly would be rewarded.
Then content providers could chose if they want to invest also their complete payouts. Or just the part that gets added after payout.
The difference in voting could be done by using the slider and the actuall voting Power. And that would be free choice related. It will give a Different kind of payout pattern.
And also because Steem Power would only concern investment and the return on that you'd have a free choice there too.
First I thought this could not work, but after some recent investigations I think this is possible.
It will keep the large stakeholders happy and those who don't have much SP.
At least that is how I see it right now as being an Easy fix that would seperate attention creation from investment.
Have a good weekend!
Interesting thought :) Thanks, you too!
Thanks!
Correct me if I am wrong, but you are talking about "sponsors" here, not "investors".
I'm not sure what the distinction is. By "investor" I am referring to people who purchase Steem and power up. Most people would be doing this with the intention of making money on their 'investment'.
It would be interesting then to analyse where this profit is supposed to come from, i.e. why people would pay for rewarding other peoples content or pushing their own. A sponsor is someone who is used to pay for attention and he does not expect to make money from the event he sponsors., e.g. the US Open if he sponsors it. That's imho pretty much what people who think they "invest" are doing right now.
I see. Well users can promote their content, which is probably the closest thing to sponsors/adds that the site has currently. The thing with Steem/SP is that you can sell it for a profit if the price goes up, so there is an investment side to it too.
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how about micro finance option for powered up funds to address humanitarian proposals voted upon by individuals?
It sounds like an interesting idea. How would it work?