Thanks for clarification. I have a question though:
What drives Vests to become more expensive over time? By what formula is this price increasing?
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Thanks for clarification. I have a question though:
What drives Vests to become more expensive over time? By what formula is this price increasing?
Great question - I'm not 100% sure about this but I think the price of VESTS increases at the same rate as the inflation. So with each block new VESTS are created which causes some inflation, and the steem_per_mvests amount is increased based on that.
https://steem.io/SteemWhitePaper.pdf
Demand is what drives prices, in reality, steem is slightly inflationary (much less than U$D) so it moderates prices lower than if there was a fixed supply like BTC. But steem is still going up due to demand. Watch what happens once we (steemit) goes public :D
Where did you get the idea that BTC supply is fixed?
It is growing, currently at a rate of 12.5 BTC every block (about 10 minutes)
http://bitcoinblockhalf.com
And btw, Steem is already "public" :)
Semantics...
BTC will never exceed 21 million, that is what I mean by "fixed". It has not been all "issued" as of yet, but it is capped at 21 million BTC.
Steem is publically traded, but I should have said STEEMIT is "beta" and one must be "approved" to join. Thanks for the clarity LOL! (post edited)
I kept on searching and found the answer finally here: https://steemit.com/interest/@sigmajin/understanding-the-steem-economic-system-vests-sbd-steem-dilution-interest-and-all-those-crazy-things
In short:
VESTs are like equity or stock of the compony.
Price of VEST must increase because of the dilution of the "stock" so that the holders wouldn't loose their influence over the company. So every year it takes twice as much STEEM to buy VEST.
Why does the stock dilute? When new" stock" that means VESTS are issued it means that your percentage of the share drops that means you have less influence.
This is how I understand this system so far. Correct me if I am wrong.