Thanks for your robust reply, upvoted.
I take your point about the author/curator split, admittedly I'm not sure how that works, and there may be reasons why the effective split deviates from an economic optimum. However, just from the hearing 'reverse auction', it sounds like market forces are dictating the rate to be what it is, which at least at a cursory glance would seem fair. But there may be more to this, thanks for alerting me to this issue.
The interest (I don't think just because it doesn't beat inflation doesn't disqualifies it from the term, but that's semantics) may serve merely to mitigate some of the effects of inflation. If we're completely unable to agree on how the 15% should be spent, a common denominator would be to deduct 15% from the inflation rate and remove this part entirely. This would effectively have almost no change but makes the numbers on the books a lot clearer by removing an extra layer of market analysis and thereby improving efficiency in arriving to a more accurate overall price equilibrium.
It may be true that some believe there is insufficient incentive to hold voting power and removing this 1.5%pa will, however little, reduce that incentive even more. I am not disputing that, but I wish to point out that the 'however little' part is very important. The question is: is the marginal extra incentive of holding SP gained by this interest payment sufficient to cover its cost of 15% of the new steem created? How many people are right at the razor's edge between holding and selling where a yearly interest payment of about 1/4 of the daily volatility of the underlying asset is likely going to shift their view one way or the other? I honestly don't believe that number will justify a cost of, as of now, $900,000 a year or so. Having 1 person with a million dollars, or 100 people with $10,000, or 100 million people are all examples of of a distribution of a million dollars, but they represent vastly different utility values. The form of distribution in the interest payment in question, I feel, represents a sub optimal utility value to say the least. To surmise it as 'there is insufficient incentive to hold SP as it is, reducing it further would just make it worse' is not quite getting the point.
I happen to agree that there exists insufficient reasons to hold SP right now. My personal belief is that this is an incentive that has to arise organically from the desire and willingness to partake in a robust platform or ecosystem of platforms. The bigger and better Steemit, Squeak, Steepshot, Busy, etc are, the more people will naturally be incentivized to take part and have a voice by building up voting power. The wealth redistribution in our ecosystem should center around only directly rewarding the production and discovery of the best content, as well as the maintenance and development of the platform/s. Any other incentives such as directly attempting to bribe people into holding voting power via any means without otherwise contributing is introducing an element of inefficiency into the ecosystem that is economically guaranteed to be a deleterious impact. Even if I am wrong about this paragraph, or if you disagree with me here, it doesn't invalidate the previous paragraph.
Finally, if you read my piece and are not convinced that Steemit Inc should receive more funding I can understand. They certainly didn't ask for it and I'm not affiliated in any way. Out of a decentralized currency, decentralized distribution, and decentralized development, I think the first 2 are good but the last part is not very competitive compared to established businesses. It is overall a difficult balancing act to get right.
Thank you again, for your reply, especially about educating me on how the authorship/curation split works (which I shall look into). That's a separate issue, and I may well agree with you there after researching it.
I'm not at all married to the concept of paying people with inflated currency in order to mitigate the effects of inflating the currency. So on that, we can reach agreement.
What I find, however, is that most of the ideas that are suggested or proposed never address the purpose of the incentives or how to balance the rewards structure for both authors and voters/investors. Many of the solutions focus on how more rewards can be given away to those who have no desire or need to be invested in the system. The original ratio was 50/50 for authors/curators. It was changed to 75/25, with an added reverse auction to mitigate automated voting, which ended up creating the 88/12 average.
So to me, the first step for increasing demand for STEEM and more participation in the platform for a larger number of users would be to increase the rewards/incentives for those who are not and have no desire to be bloggers. If we want to eliminate the SP "interest," then that should be the next logical step. Increase rewards for those who actually take a long-term approach and want to be influential and involved in the day-to-day activities on the platform.
And as far as centralized development is concerned - as I already stated, Steemit, Inc. hasn't exactly demonstrated that increasing/improving development is their goal. They have stated explicitly that their flagship site likely won't be improved beyond "just good enough." If they want more money than the many millions of dollars they already have, then they should demonstrate that this money will actually be used for development, marketing, etc.
I can live with eliminating the 15% inflation/distribution altogether...if curation rewards for SP holders were brought back to 1:1 with author rewards. We need less money flowing out and more incentive for more users. Votes will always outnumber posts. Voters will always outnumber bloggers. The focus should probably be more on the average reader/voter and not the average content creator. That's where the real growth lies. Well, that...and having an attractive UI that people actually want to use.
Yes, I'm glad we align in our view that using a bit of the inflation to pay an amount to mitigate inflation is pretty inefficient.
I think we both recognize that rewards on this platform has to revolve around creating, discovering, curating, maintaining good content and the platform/s necessary for such actions. Other forms of arbitrary rewards like a direct pro rate inflation of currency, or a random lottery that are not directly promoting those above effects are probably sub optimal.
You make a strong argument that the balance between authorship and curation is too skewed to the author at an effective rate of 88%. I am inclined to agree here. My initial instinct is that 50/50 would be a little too heavy on the curators side and perhaps insufficient motivation for authors to create quality content, and maybe something close to a 75/25 effective split would be closer to the mark.
Having discussed it in chat however, it appears I'm in the minority here and that most ppl would rather see a stronger balance towards curation more in line with what you've suggested. Perhaps my lack of experience and authorship bias is compromising my judgement here, as it is sort of an initial gut instinct. Either way I do agree it needs to go down from 88%
As for steemit,inc I feel that they do work hard and Steem's success is heavily dependent on them for the foreseeable future. I've already put forward my case as strongly as possible, but it is quite reasonable to remain unpersuaded.
Ultimately real growth lies from a well functioning streamlined platform/s with easily accessible top quality content. This requires talent that's willing to create that content, people willing to discover and make that content more accessible, and developers to make and improve the platform. The incentive balance we eventually get probably won't satisfy everyone perfectly, but hopefully satisfies most people sufficiently, and on point enough to lead a bright future for Steem
Thanks for sharing your thoughts @ats-david, I enjoy your posts
Why go to Steemit Inc when it can go to a type of smart contract that distribute when a project is approved by the community?
It can, I'm pretty much for anything other than where it is now
But to answer your question, I believe a centralized development team with a decentralized monetary system is the key to a successful platform. I outlined why I think it's important for Steemit Inc to have ongoing funds in my article.
I do think though, that it is reasonable to disagree on where the funds go, but staying where they are is very wasteful
Agreed
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