That's not really a coherent or even relevant argument. How can you compare the supply models of a global digital currency with baked in inflation and deflation models to the supply models of a plant that takes months to grow at scale?
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If you read below the discussion I had with @jamessmith I wrote;
It's could become a self fulfilling prophesy for sure, the platform become more valuable, payouts become bigger, more users come, and the circle continues. I probably should have been more clear that my 'Opinion' is that people should work for the Steem, not buy it. In many respects, it great for the platform in the short term. Although, could be bad if people lose money (if ever) the price comes off to where I believe true value is now...
You can add as many variables into the model as you like. User numbers are key. I'm an investment professional, and i won't accept anyone who say's at this moment an Opinion that Steem is overvalued doesn't have any kind of legitimacy. $24,000+ per user. This is by no means a model, just some information for people to consider.
$24,000 per user would mean Steem captures user value better than any other platform. This may be because Steem actually pays the true value for what the users are worth while competitors can't do that.
RE: 'Wouldn't it being rare make it more valuable'
My point is; Steem is rare at the moment, but it won't be. It's rarity is currently driven by demand and supply.
Tulip Mania Was driven out of similar economic factors, both demand and supply contributed to it's rarity. It was an example about how short term rarity does not make something highly valuable in the long run..
No, your assumption is that it won't be rare, and I'm not sure what you base this on. Any marked increase in supply will be indicated by a wholesale spike in power-downs taking place, which would be quite easily identified seven days prior to the supply being put on the market.
True, short term rarity can never sustain long term. Fortunately, STEEM has far more fundamentals that lend itself to long term growth and sustainability in both price and user base.
I think we could end up going round in circles here. My point is, Steem is rare NOW, but it won't be. Consider Steem Dollar Payouts are 3.75% (of the 10% Market Cap of rewards per annum, roughly, 75% goes to creator, then split 50:50 Sd and Steem) of market cap per annum. That's currently $17m. And also consider that people will power down. Steem supply will only increase moving forward, and in a big way (relative to current levels of 1.3%).
The inflation rate of steem is peanuts when compared to the demand for steem over time, the price of steem is indefinitely going to rise way faster and higher than any other crypto
Yes but your analysis is based on a static user base, which it most certainly is not.
The only reason we're in an infinite loop is because you don't appear to be accepting externalities into your model, but only the baked in framework to the protocols. One of our assessments will be wrong to some degree, I just don't think Steem will face a problem of inflated supply, particularly not during growth stages.