I am not so sure about this proposal, the inflation is set to decay at regular block intervals until it reaches 0.95%. Currently BTC's inflation is about 4% and it took 8 years to reach that point. Why the rush? The price of bitcoin was shit at the beginning also.
In my opinion removing the reward pool would entrench the current stakeholders in their position.
They could either buy more or sell, just like any other coin. The great content creators will be rewarded according to their communities, which likely are much better at deciding the value of that content as opposed to everyone all sharing the same reward pool and fighting over where it goes each day.
You are correct that bitcoin’s price suffered for a long time but it suffered during a time where it had no competitors. Today, competitors are forming everyday and companies/apps/developers are currently picking blockchains to call their home. We want them to pick Steem. That is why there should be a rush in my opinion. We need forward momentum. Anything else is bad longterm. We don’t have the luxury of time.
We need to focus on creating demand via organic growth, decreasing the supply doesn't do that. Removing the reward pool from the equation is a major change that would turn the token economics on it's head, at least in the mid term I don't think it's viable. If SMTs are succesful then we can start considering it.
Think about it this way, if we reduce the inflation to 2% at the current prices the witnesses will need to have half of it or 1% in order to have adequate compensation. By witnesses I mean all of them not just the top 20. That leaves another 1% for stakeholders and the SPS.
Basically we would have the current distribution locked since the only way to acquire steem would be to buy it.
EDIT: Maybe accelerating the rate at which the inflation decreases would be a better option.
I agree!!
uhm... nice. This choice also could works smoother. :)
I don’t have the details worked out but making sure witnesses are paid to secure the blockchain is obviously required and the inflation rate chosen would make sure that is the case.
“Locking” the current distribution would reward those who have held through this bear market and believe in this platform. Buying would be required, which is kind of the point since it would create buy pressure.
Let me present it slightly different ... there is a maximum number of bitcoins that will ever be mined. When that happens, those people are “locked in”. Do you think bitcoin dies on that day? I think everyone would say no. So what happens? It gets traded around and a fair market value priced in whatever asset you are talking about is settled upon by traders. I think the same thing happens here. People will trade Steem and a value will be found. Hopefully people hold it and power it up and the price rises. I am sure when it gets to $2 some people will dump (aka distribute) it and others will hold it until it goes back to ATH.
I do like your idea of accelerating the decrease in the inflation schedule. Maybe that would be more palatable to the community.
The original comment had some ideas I very much disagree with, but decreasing the inflation rate at a faster pace is the one decent idea.
It could also be done fairly easily. I would also leave the final steady-state inflation as positive albeit small.
Also, this isn't really inflation, it is the coin-creation rate. The real inflation rate is much higher.
They are not patient people. :) I am not opposed to the idea, but I do think it is too soon. However, I've seen this move coming....
I will not hold if they do it now. It's do soon, with too little distribution and ineffective leaders as Large Stakeholders in a DPOS chain matters.
The bear market has taken an emotional toll on many of our users and stakeholders and they are looking for ANY WAY to stop the bleeding. It's short sighted in my view... But I think we will see a reduction in inflation sooner rather than later.
It's not really an emotional reaction at all. If SMTs are a viable product, it makes sense to go this route. As Andrarchy said above...
You can't remove the current economy before replacing it. Also, who wants to hold or buy a token with no vision or use case?
Don't break what you have before you have a viable replacement.
It would be replaced with an SMT. Steem would be the base layer on which everything else is created.
Better get those out and released before you talk about breaking the only use case we have.
I agree with the future vision and hate the timing.
Yes of course, it would only be done when SMTs are released and functional, that is the whole premise behind the change.