Inflation 9.5% per year is still super-high, it's about 5 times more than how central bankers work. I'm quite surprised that only few people have problem with that, but at least it's decreasing every year. I know if adoption grows strongly, such an inflation might not be that big issue. But for sure thanks for your post, numbers are always welcome!
You are viewing a single comment's thread from:
I agree! its a little concerning to say the least and I think many new investors looking to put money into steem might be put off or give them second thoughts, because if Steemit grows slowly the inflation rate will destroy the the payouts to content creators.
On the contrary, I think I would like more inflation! If you want steem to be successful, you need more people participating, so you need to be inclusive by giving considerable rewards to the new ones. The new supply for the next years looks mean. New supply should be proportional to the value the system is generating, measured somehow.
It seems like that but in reality due to higher inflation Steem is loosing I assume about 100x of sitting capital form investors because no-one who is rational is storing value in inflationary asset as inflation is nothing else than hidden tax. So there is still much less capital than it could be. Rewards (measured in USD) are not based only on inflation numbers but also on STEEM value/cap value. If you have 100x more capital and inflation only 1%, you will still get 10x higher rewards (in USD terms) and everyone will be more happy. Current state is good only for one thing - faster STEEM distribution, but not for rewards, not for STEEM value and not for investors. Guess what most users would appreciate more.
There is a tension between different factors. Just be sure you don't focus only in one of those.
That's right. I quite amplify inflation factor but only because most people ignore it (to my surprise). You're right, it's not the only factor, but it's one among the primary factors.
The curious thing is that I perceive "most people" thinking like you.
For example, I don't understand why so much people argues that bitcoin is scarce, since there are a lot of (even better) cryptocurrencies. And this is just the beginning. Maybe btc will have some value for historical reasons?
Hmm, finite supply of money is something fundamental for healthy economy and for motivation of people to do something. It's similar to putting water out of boat. When you know that no matter what you do more water is incoming you will eventually loose motivation for your effort. But if the water is finite (there are no leaks) your motivation to pour water out is much better. Scarcity of Bitcoin is one of the pillar of Bitcoin, for me the most important. Our current economy is quite the opposite as no matter how you try, they always print more to diminish effect of your effort claiming false dogma that without inflation (breaking scarcity) it cannot work which is utter lie. Bitcoin is scarce that although it's inflationary its going to zero and there is "only" 22 millions of BTC units. So in this paradigm everyone holding one Bitcoin owns very scarce asset as only 0,3% population can hold more than 1 BTC. There are better crypto-currencies, true, and there might be shif of valuet, but real value of crypto is where most people believe it is. So yeah, it's just faith built in time, nothing tangible. Bitcoin will have to fight to keep its status in time.