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RE: Where Does the Money in Steem Come From?

in #steemit8 years ago (edited)

No you don't need to invest more to win. Steem Power largely isn't inflationary (other than the 10% redistribution) because it's sheltered from Steem inflation. All that really matters is your % ownership of any company or ecosystem and in this case that's reflected in Steem Power. Inflation (or dilution) only effects the # of shares and is only one component to price. The other component is the subjective value investors have. In the early growth phase of a growth company, the company as well as its perceived value can grow at 100% rate hence if there is an equivalent dilution/inflation prices should remain stable. I'm not concerned about recent prices and that seems to have brought some people out of the woodwork. I doubt big investors would even question the mechanics of Steem/Steem power. At least I hope not and that would reflect poor due diligence. I thought Steem was way overinflated at this stage anyways. People who think that prices are always strongly correlated with fundamentals should try to explain why Bitcoin went down by 50-80%+ many times over the last 7 years.

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Steem Power is no more than Steem and that's the single point of failure and where the actual money comes from. Money comes from fiat and btc and other cryptocurrencies into STEEM, that's what holding the whole platform together and creating the payouts. You already said SP is also inflationary (it's Steem after all too) so it doesn't matter if it keeps a similar price over 2 years, it will inflate either way and that's if you don't power down at all.

Bitcoin always went down because of fundamentals, it's all about fundamentals and sentiment in crypto, technical analysis is for the very short term. Bitcoin dropped when Mt Gox held most of the BTC for sale. Ethereum dropped from 21 dollars to 10 almost in a single day during the DAO hack.

Steem can't seem to find a bottom because traders and speculators are beginning to realize that unless you power up (which doesn't make sense to me but I can give you that some Steem believers will do) it's pointless to buy.