Does our steem power collect less interest while we're powering down? I was asked this today in response to my video and I still haven't dug up a good answer.
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Does our steem power collect less interest while we're powering down? I was asked this today in response to my video and I still haven't dug up a good answer.
Apologies for my prose as I've been awake 27 hours. My understanding (which afair @smooth confirmed at bitcointalk discussion) is that our SP continues to earn the debasement rate I showed until it is actually converted to STEEM. So for as long as you see it still listed under your SP balance, then it is being debased as SP not STEEM. Also afaik powered down SP (aka VESTS) can be aborted at any time before it is actually converted to STEEM, but I personally haven't tried it yet. The debasement rate on STEEM is much worse and I will detail that in Part 2. It would have been too much to put in one digestible blog post.
As a side note, this will show through increased payment amounts on your 104 payments. So, for example, if the rate of interest is 100% per year, your 52nd payment will be approximately twice the size as your first.
The payment amounts will not be assured to increase, as measured in a unit-of-exchange such as dollars. As I explained in my other comment response to you, you are sort of building a strawman here, because the increased money supply would cause the exchange price to decrease if the market cap will remain constant.
If you believe in money supply theory. an outdated economic philosophy that hasnt been taken seriously in a century.
Yeah, the value of a steem might go up. It might go down. I assumed that was a given.
Did you not read what I wrote in my blog. "such as in the often maligned Quantity Theory of Money". Obviously I am aware that the QTM is not in control of the price, i.e. there are other factors such as variable investor confidence, etc..
Then why did you assume it couldn't go down? I will quote you, "this will show through increased payment amounts on your 104 payments".
Thank you kindly for your timely response :)
It does collect power while powering down. I tried powering down for 1 week and still accrued new SP at the same rate as prior to powering down.
Thanks! That's all I wanted to know. :)
You're welcome.
Thanks @justtryme90 That is exactly what I was trying to get at.
full $teem Ahead!
@streetstyle
@piedpiper Good question, sorry I can't answer it. But I bet @smooth or @anonymint could answer you. I hope they do because that is an important question that matters to those who are thinking of powering down.
Full $teem Ahead!
@streetstyle
Dan & Ned Rule the World
Basically, what happens when you power down is youre cashing in your vests. So lets say you have 104K vests, youre cashing in 1000 at a time every week.
if you go to steemd.com, youll see up in the top right steem_per_mvests. This number is always increasing, because steem is created and added to the vesting fund by mining. Thats why your SP is always increasing because the steem value of the vests you hold is increasing.
So whats going to happen when you power down is youre going to a little more steem each week for your payment. your last payment should be around 2X your first one.
Its interesting to note that it actually takes much less than 104 weeks to get the full steem amount listed in your SP balance. Right now, because the rate is increasing so fast, it looksl ike it might take less than a year.
Thanks for break down @sigmajin Especially that info. about it pays out sooner. Wow!
Full $teem Ahead!
@streetstyle
I don't see any mathematical need to mention vests. It is just complicates the explanation, because all that matters is the rate that the SP is increasing every year and the debasement rate. In Part 2, I will endeavor to explain the difference between those two metrics.
Yes this is true because the rate that your SP holdings are increasing is always greater than 0. But I think it is misleading to insinuate (by omission) that this means the users will get the displayed $balance out before 104 weeks, because if the market cap remains constant the price must drop due to the 100% yearly increase in the money supply. @smooth had pointed out to me that the weighted average price of powering down is 1 year of risk, i.e. if the price declined by a constant rate during 104 weeks, the weighted average price would be the price at the 52nd week.
Im not sure what @theoretical said that disagreed with me. He did correct my statement that the backing steem is created ex nihilo (though its semantics.... i guess you could call creating it by mining ex nihilo... i call creating it by mining creating it by mining...) but he agreed with me that the steem to redeem SBD comes from the vesting fund.
His explanation merely restated what I had said... that the redemption of SBD comes from the vesting fund.. which was the entire topic of debate if you read through the thread.
THe whole thing that triggered it was that I had said that it makes more sense to evaluate SBD against the vesting fund (vice against the total supply) to determine the risk from debt exposure, since SBD are redeemed by there. There is nothing in his reply to contradict that. Aside from a basically semantic disagreement about what ex nihilo means, I challenge you @theoretical or anyone else to point out an error that he corrected.
I already wrote a pretty concise explanation of the vesting fund, vests and steem (which i linked and you think is too complicated) I don't know what else i can tell you. Its obvuous that youre one of those authors that gets upvoted as a matter of course because of your connections. That doesnt make you right, and it doesn't back your math (which is wrong).
For example, when you say a change from 5/100 to 95/200 is a 349% increase, that is wrong. And its wrong regardless of what dantheman, theoretical and complexring believe. Its wrong even though you got paid $2k to do math poorly. its just wrong. Instead of arguing with someone who clearly possesses a greater acuity of discernment than you do, you should just sit there and be wrong.
I've already gone head to head with complex on economic issues and the underlying math. And im confident that, in that area (if not in my understanding of how i works) I am at least his equal.
Just BTW, since you brought academic credentials into it, i have an MBA and a juris doctorate.
Well sure. Obv given a linear change the weighted average is going to be in the middle. The point is it could as easily go up as down. I think everyone understands that the price of steem 1 year from now is not a given. But the fact remains that if your SP balance is X, a powerdown to get X steem doesnt take a full one year. That the value of that X steem is unpredictable is a given, i think for most readers.
Your failure to see this is probably why your math is off. Youre figuring the dilution wrong because you don't really understand whats happening. Youre imagining that bloggers get paid in steem (they don't)
If the currency is healthy, there is no reason to believe that the marketcap would remain constant. In fact, i challenge you to find a single successful crypto currency that has maintained a constant (vs growing) marketcap. It kind of seems like this constant harping on monetarist nonsense Is an attempt explain prices circling the toilet.
Isnt this coming frpm the guy, btw, who predicted a 1000% increase in the price of steem over 5 years.
You had numerous errors upthread that were rebuked by @theoretical, so until you produce a cogent canonical reference for me to review, I am going to assume you are confused. Very many people have read my blog and upvoted it, include @dantheman, @complexring, @smooth. The middle guy is a PhD mathematician.
My point was not whether the market cap would go up, stay constant, or go down, but to not give incomplete explanations that make such assumptions as you did.
I know the blog you are referring to and it does not predict an increase in price. Perhaps you meant to write increase in market capitalization. You keep making errors. Yes I did have some myopia in that old blog, but you didn't even get the accusation correct, lol.
Come on man, stop creating butthurt animosity and go write an eloquent, concise explanation for everyone. So then we can compare math notes. For now, you seem confused and/or the explanation in the white paper is incomplete and everyone is confused until we have a canonical specification.