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RE: Stake holders v stakeholders and what happens when the Steem stops printing

in #steem6 years ago

Hey @tarazkp, I thought I'd jump in with what I know about your inflation question.

From the whitepaper:

Starting with the network's 16th hard fork in December 2016, Steem began creating new tokens at a yearly inflation rate of 9.5%. The inflation rate decreases at a rate of 0.01% every 250,000 blocks, or about 0.5% per year. The inflation will continue decreasing at this pace until the overall inflation rate reaches 0.95%. This will take about 20.5 years from the time hard fork 16 went into effect.

Now, I haven't looked at the code to confirm this, and the code is the law after all, but if the whitepaper isn't lying, eventually we will reach a constant rate of inflation.

So your "what then" question becomes... "what now?" More precisely: Why should we care about holding and staking STEEM long-term, if unlike Bitcoin and the others, there will be more STEEM printed forever?

The answer is because, unlike Bitcoin, Steem has something other than scarcity backing it. It has the real value of the so-called attention economy behind it. Nobody has any real incentive to hold Bitcoin if you think it might stop going up.... but Steem isn't like that.

Let's play a game.

 
Let's say tomorrow, all crypto-assets have the hugest crash yet. Let's say Satoshi moves his coins and Bitcoin closes at $2.50 each. Most altcoins are useless. Not only does blood run in the streets, but bodies fly from windows. It's bad.

Meanwhile, with STEEM trading at a fraction of a cent, it now costs approximately $0.09 in promotion to send your post to the front page. Hell, even if you're one of the #nobidbot types (good), you could just power up a dollar's worth of STEEM and self-upvote your way there.

Do you honestly think STEEM is going to stay that cheap? I wouldn't bet on it.

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Found this from sometime last year but the questions asked in the somments were conveniently not answered.

https://steemit.com/steem-inflation/@fyrstikken/what-is-the-inflation-rate-of-steem-here-is-the-supply-table-for-the-next-20-years

So, steem doesn't stop printing completely but in 20 years there will be a quarter of the supply but how many new people demanding it? It is going to be very difficult to get hands on and with the price increases expected, the payouts aren't going to hold a lot of Steem in them.

Off to bed...