Two questions:
- How does the value of the newly created / curated content enter into the equation?
- What would the collapse look like? ie. what would be the 'straw that breaks the camels back' in your estimation? Play that out in this case.
You are viewing a single comment's thread from:
Needless to say, only those at the top profit (and some random users who managed to grab some of the 10% bait at no cost along the way).
Almost totally false... it's only indirect in the same way that people who watch TV aren't directly paying for the content they view. The upvote structure organically encourages what content is desired. If a whale likes content about gardening and upvotes it, you can damn well bet that within a weeks worth of time, we're going to have a lot of selfie photos of people planting their first tomatoes.
emphasis mine... it will not plummet. Were it not for the power up mechanism, I would agree with you. Since it exists and we can know at any point in time precisely how much steem will be powered down in little more than one weeks time, we can know what's coming. Accepting your premise, we're in a constant race condition to the bottom... unless there are new market entrants.
That doesn't happen overnight.
For the reasons above, I think this is a simplification at best.
Yeah, TV is an ok analogy I guess. It's indirect compared to directly purchasing a show on the creator's website. It's indirect compared to other ways of micropayment, be it direct donation to the author, flattr, patreon, whatever.
What's even worse is, investors are not informed upfront that, in fact, a portion of their investment is going to be donated to content creators, and they will only get that money back if more new investors join the platform.
About your second point, I agree, the pyramid may fall in slow motion. It largely depends on how those at the top of the pyramid decide to cash out - as they hold the vast majority of tokens. They may slowly sell over the years, or power down and accumulate the tokens for a while then suddenly dump to the market.
Either way, we're arguing time frames here - the mechanics stay the same.
Can't continue extending the thread so a followup to your last message:
So who do you propose act as the arbiter of when someone is 'well informed' enough to invest? Would you argue for a 'platform literacy test' before purchasing Steem from the platform?
Precisely my point. I contend that the vast majority have and will remain vested in the platform.
They must necessarily.
What would be the 'rational actor' mentality that defines behaving in this way? Why would you effectively strangle your golden goose after it lays enough eggs to 'cash out'?
We're arguing both time frames AND mechanics. I wholly disagree that your analysis calculates for the content creation variable OR the variable of 'more perfect information' available to know precisely how much liquid Steem could be sold at any point in time +7.01 days.
I definitely appreciate the dialogue... thank you for the civility.
Everyone should decide for themselves. But the information required to make a decision should be clear and accessible. Steem's mechanics are convoluted, the whitepaper is long and obfuscated and the only message they are pushing is along the lines of "everyone gets free money for everything", as if the platform was some magic money generating machine.
People are incentivized to lock down their investment for 2 years without being informed that they are actually paying earlier investors and content creators, and new investors with ever greater investments are required in the future if they ever want to see their money again. It only takes one sentence to provide this information, yet it is nowhere to be found.
It may even be so for a while. But eventually every investor will want to cash out their investment and their return on it, which must be covered by an increasing number of people lured into investing. But then again, the largest stake holders are powering down as we speak.
When they can't convince any more people to invest, the money stops flowing in and the market price starts going down. If at that point the top stake holders have enough accumulated liquid tokens, they might be better off dumping it all at once and let the market burn before the demand and price drop further.
If the top stake holders continue accumulating liquid tokens, that information will become increasingly meaningless. And even if they don't, that variable is only part of the story. In a scheme like this, in order to decide whether it's worth investing, you would have to know how much more money people are willing to invest in the next 2 years. Which in turn, among other things depends on how succesful steem is at marketing.
My point is, that information alone doesn't get you much.
To me, the mechanics and the outcome seem clear. The time frame I'm not sure about. But one thing is certain: the longer it goes on, the more people will lose their money to the ones at the top of the pyramid.