The question we have to ask is what is the purpose of the lock in period? and does it really encourage people to hold steem?
My answer to that is that it doesn't. It does the opposite actually.
Throw someone in a cage and ask him how eager he is to get out.
Now throw someone in a cage with the key and ask the same question. The one with the key will not be as eager as the one without the key because he knows he can get out anytime he wants.
If steem power is removed entirely there won't be more people cashing out, this is a misconception. What makes people hold long term is their belief in the project. Using force ( lock in period) to achieve something is never a working strategy because users will always get around it. People who want to get out will do so regardless of any power down period anyway. The lock in period just slows down the price discovery process.
It's not a cage and it's not using force if it's a voluntary agreement and no one is being imprisoned. Those analogies fail.
The purpose of the power down period is not just to keep people from cashing out. It's also (perhaps moreso) to encourage voters to vote in ways that promote the platform's long term interests instead of focusing exclusively on their own short term interests. i.e. Vote for the article that will attract users and raise the price of steem, instead of the article that will attract whale votes. Traders and investors who are not interested in voting on content have no need to ever even learn that steem power exists. They can remain exactly as liquid as they choose.
And you're right that someone who wants to get out will find a way. They can just sell their whole account. It happened with the steve-walscot (or something like that) account. So that's even less of a reason to worry about friction.
Wouldn't allocating 3% more to authors and witnesses achieve the same but keep the functionality of Steem Power? Steem Power has uses which aren't trivial.
@steemit Inc has stopped powering down. This indicates to me that 1.5% interest isn't negligible even for the richest Steemian.
@demotruk's comment on the 1.5% interest and its implications for Steem's economy should also be keep in mind when discussing this issue.
Also can we really revote with 1/13th of the Steem? This means payout period can be longer than 7 days? Or am I missing something else?
I hope the comment that you replied to made it clear that I'm not in favor of eliminating steem power?
As to reallocating the interest, the more I think about it, the more ambivalent I become. As far as I'm concerned, at best it's a low priority to make any changes at all to the block chain economics at this point. Steemit can already get revenue for development from reward splitting from HF17/18, so they don't need a separate development fund. The developers need to focus on improving the user interface and supporting entrepreneurs. The antifragility that comes with numerous entrepreneurs driving their own growth on the blockchain is where the explosive growth will come from.
Not sure about this. I seem to remember reading something that said that we lose our voting power at the beginning of the power-down week and we get the withdrawal at the end. If that's right, then we wouldn't be able to double vote because the steem power would be "offline" for 7 days - an entire payout cycle - before we could transfer it to someone else or power it up again. I can't find where I read that now, though, so I might be misremembering.
I understood you weren't in favor of eliminating Steem Power.
I also think as you said that it's not possible to vote twice with the same stake or 1/13 of it but it would be nice if this could be confirm.
An agreement that most people don't want to sign up for.
Good because it doesn't.
You assume that if we remove steem power people won't be invested long term anymore, this is where my analogy doesn't fail :-)
I don't think that's what liberosist meant by friction. There is friction because the barrier to entry is high due to lock in period. The majority of users don't want to lock their money which means many users are excluded from participating.
Steem power also adds a lot of wallet complexity which is bad for mainstream adoption.
Authors don't need steem power to participate. Long and short term traders don't need steem power to participate.
If someone wants the privilege of voting to shape the nature of the content on the blockchain and the distribution of rewards, then I think it's fair and prudent for the content community to demand a demonstration of long term commitment to the platform. It's sort of like "proof of stake" at the content layer.
Possible compromises: Early withdrawal with penalty, distribute rewards as steem instead of steem power.
I know what you mean but i think the benefits of eliminating steem power outweight the benefits of keeping it.
It's also going to be more and more difficult to own a large piece of the pie as more users use steem and as the price increases, so the problem you mentionned is going to dissipate with time.
belief is not enough to keep me in any cryptocurrency, I trade them all day for profit, and I am only dedicated to steem because it has steem power, a great way to lock in my trading profits is with steem power. Locking up tokens is good for the token value. Dash has masternodes, Ether has ICOs, and steem has steem power.
The steem power harvester!
From what I've seen you are trading a lot with your emotions and jumping on every hyped crypto. So I understand how locking your crypto may help you in that regards, however long term holder trade rationally.
AFAIK users are not required to lock any funds to become a dash masternode, so it would be exactly like steem without steem power. If masternodes had to lock their funds for 3 months there would be a lot less of it.
if user sells their 100 DASH and only have 900 DASH left, that user no longer has a masternode, so it's locked up for sure. There are far more traders who trade on emotions and jump on bandwagons than there are long term holders(rich people). STEEM needs steem power to protect it's market against FUD and emotional trading.
If the user sells 100 dash then his masternode automatically goes offline, the money is not locked and can be withdrawn at any time.
That's incorrect and long term holders are not necessarily rich people.
if steem power lock was removed today, steem price would crash today
That's FUD, only emotional traders fall for this.
based on performance, selling steem for DASH or Ethereum today is the smart way to trade, so removing steem power lock is guaranteed to crash the steem price, it would take months for steem to recover, if ever
Exactly +++