What is Steem's value?
TL;DR: Think of the steem ecosystem as a kind of "virtual Iceland" (call it "Steemland") where STEEM is the equivalent of Iceland's currency, the krona (symbol ISK). Then teach yourself some macroeconomics to know what you can do to influence the exchange rate of your "virtual country's" currency.
Let's begin with Bitcoin
Some time ago I wrote a post titled What's Bitcoin's Value? One of the main sources of bitcoin value is its underlying "cypherpunk" ideology. Bitcoin embodies a refuge, an "exit" alternative from a financial system which appears monopolistic, captured and offering only a rough deal to the average person.
So why would anyone be tempted to exchange some of their fiat currency for Bitcoin? I listed more than 6 different reasons in my past articles but I feel the fundamental one is that Bitcoin represents "the non-financial system", the only true alternative to the financial system.
Even if one believes that our financial system is not that bad and can still be improved (as I happen to believe), it's always good to have a "hedging strategy", an alternative.
Explore more with @lishu's book
Next, look at Ethereum
Because of Bitcoin's success, most of the subsequent blockchain-based cryptocurrencies have tried to hew close to its ethos - that of "decentralization" and "censorship resistance". The second most famous crypto, Ethereum is the living illustration of how awkwardly the rugged, individualistic Bitcoin ethos combines with typical "social" functionalities such as computing.
While "decentralized" at the physical level, Ethereum is über-centralized at the logical level, as there is only one network where cryptokitties and ICOs and all other "smart contracts" compete for the same, limited computing resources. And that is before mentioning the overwhelming influence Vitalik holds over the direction of the platform.
So why would anyone exchange fiat for Ether? Mostly because of the applications, the most successful being of course the ICOs. However, the ICOs raised to meteoric popularity in 2017 and 2018 but have faded since. Whether they will ever come back in vogue is anybody's guess.
... But what about Steem?
Wisely enough, the steem blockchain chose a different path. Unlike EOS and Tezos and Tron, Steem shunned generic "smart contracts" and instead extended bitcoin in a different direction: that of larger, extensible data structures and a focus on user-friendliness and social features.
But since one of the comments to my article about Bitcoin's value asked indeed "What's STEEM's value?" I decided it's about time I drafted a tentative response.
Blockchains are complex, hairy animals. It took many years until people started mentally accepting that Bitcoin might be more than a flash in the pan. And bitcoin's design is pretty simple (think of the 9 pages of Satoshi's paper). Ethereum is more complex because of the "compute" functionality and the many possibilities it opens. Steem and its complex cryptoeconomic system is in another complexity league still.
People who bought steem until now did so not because they understood its potential but mainly for speculative reasons, expecting to be able to sell it back in the market at a higher price (to a "greater fool", as they implicitly saw it at the time).
At the same time, STEEM has strong downward price pressure built in.
- The "monetary mass" (wrongly called "inflation" here) is increasing continuously without a strong link to the economic activity of the community. In the "fiat world", Central Banks control the monetary mass (switching between cash, short term deposits, bonds, i.e. altering the "velocity of money"). Inflation, in the real sense, is the decrease in the price of money (price expressed in goods and services internally, which is also reflected in a decrease in exchange rate with external currencies). In order to avoid inflation, the monetary mass in circulation has to track the quantity of goods and services. The currency of very dynamic, expanding economies, producing many goods and services, tends to appreciate with respect to other currencies. In order to maintain price stability, Central banks increase the monetary mass. In contrast, when economies are in recession and the activity decrease, there's too much money chasing fewer goods and services. The currency of countries in recession loses value with respect to foreign currencies. To maintain price stability Central Banks adjust the monetary mass accordingly. Steem has a bit of this elasticity in the SBD printing functionality but not nearly enough.
- Steem has been marketed (i.e. "sold to the masses") as "create and earn". Everybody has understood this as "earn $$$", (i.e. "earn USD", "earn fiat"). Thus participants are brought in the system on the idea of "do something, earn steem, sell the steem to get fiat". It is the case for witnesses, who need to pay for computing infrastructure in fiat but are rewarded in SP ("power down, sell the steem for fiat, pay for infrastructure costs"). It is the case for investors ("buy steem with fiat, stake steem as SP, allocate the SP to an activity and get paid steem and SBD, sell those back for fiat to make a return"). And it is especially true for the content creators and curators ("put your brain to use, earn STU which are even represented with the dollar symbol $, sell those for actual USD, pay your bills").
In other words, in terms of fiat exchange rate, STEEM has to run in order to stay still! The ecosystem needs to look attractive enough for new fiat to come continuously and seek conversion into STEEM!
Is STEEM doomed?
That was not a problem for as long as enough people thought the USD value of STEEM will increase and kept buying STEEM with fiat. But that is obviously not the case anymore. And we cannot influence people's thoughts, we cannot magically make them think what we want them to think.
As the cryptowinter settled in, less and less people bought crypto in general and bitcoin, a deflationary asset saw its price plummet to $3000. Steem's price has of course been hit even harder, as it was expected.
So what is to be done? Is STEEM doomed?
Quite the contrary. We need to understand the mechanism of value creation first. Once we have, you'll realize that steem has what's needed to support us in capturing that value for the common benefit. It's just that we cannot count on anybody else or some fortunate, positive externalities as in the past. We, steemians, need to "mine our brains" deeper to give new reasons to the "normies" for buying STEEM with fiat.
Steemland
The best analogy I can think of is that of a small country with its own currency, say for the sake of example Iceland. Iceland has a population of about 350 000 people, not very different from that of the steem eco-system, and a floating currency, the Icelandic krona (ISK). If the economy of Iceland does well and produces many goods and services which other countries covet, the demand for the ISK will increase and consequently its price with respect to a basket of other currencies (USD, EUR, GBP, etc.) will also increase.
Iceland football supporters
Because Iceland, a small island, imports a lot of things, a stronger ISK will improve the life of Icelanders because the price of imports (expressed in ISK) will decrease. Of course the Icelandic exporters will be challenged to increase their productivity or to occupy unique niches and offer products hard to substitute, or else a raising ISK will impact them negatively.
Icelandic Krona, ISK - the local currency
If we look at STEEM as "our ISK", what we want is for the steem community to produce goods and services (preferably priced in STEEM) which other people covet. This is the healthiest source of demand for STEEM. If we steemians propose to the people outside the platform something which they can only get in exchange for STEEM, then there will be people offering fiat in order to get STEEM.
Gross Domestic Product
So what is Steemland uniquely equipped to produce? Well, we do have some unique games, such as Steemmonsters and Drugwars, which exert a great appeal.
But mainly we produce a lot of content ... although that content is free to consume (and rightly so). Nobody needs to pay STEEM (nor fiat) to read the articles or enjoy the photographs through Steemit.com, Busy.org, Steempeak.com or the mobile apps.
That ought to give pause because "content production" is where most of our efforts are targeted! Let me repeat that: no matter how much effort we put into producing the best quality content, this effort will not, in and by itself, lead to an increase in the value of our currency, STEEM ...
That being said, producing lots of good content is essential and of big value to our ecosystem, to Steemland!
It's just that said value accrues indirectly. How? Why, through the "attention economy" mechanisms, of course. What does that mean? A central place attracting lots of "eyeballs", a web page drawing, through the abundance, quality and variety of its content, lots of traffic is a place of interest to advertisers.
This is basically the mechanism which has given Google its roughly $775 Billion market cap and Facebook its $460 Billion. Well, if we started producing compelling content on par with say, Medium or Reddit, then Steemit.com, the web site, would have a certain value for advertisers, as I've hinted at in an earlier post. As it happens Steemit, Inc. has realised it needs the revenue this could generate and has opened up to ads.
However, a couple of things come to cloud the picture.
First, the strong libertarian ethos of the venture and of the community. Many of us would feel betrayed if suddenly Steemit Inc. would turn us into cows to milk. Conscious of the risk, Steemit seems to only display ads to guests, people who browse the site without an account. Having a steem account and logging in "protects" one from the ads ... but at the same time it severely limits the value of the platform to advertisers. Guests are indeed of much lower value than users with a login which can be better understood and targeted.
Second, while Medium is at rank 194 in Alexa, Steemit.com has dropped from a high of below 1000 in early 2018 to around 5000 now. The main culprits are the diminishing interest of the people for everything crypto and blockchain, but also the lack of improvement in the UI ... as well as the competition of the other front-ends! The latter two being linked - by choosing to not improve the Steemit.com interface, "Inc" has left the place to busy.org and steempeak.com which are now splitting the desktop traffic and driving Steemit.com's Alexa rank lower.
That being said, despite all these negatives, steemit.com remains a source of "exports" for Steemland. By bringing people to read things which they don't find elsewhere, steemit.com creates a virtual group of eyeballs which is potentially of some interest to advertisers. And even if those would pay in fiat not in STEEM, it allows Steemit Inc. to pay salaries without resorting to selling STEEM on the exchanges, which lowers the selling pressure on the token.
Steemit.com Export Gateway: the Trending page
Once we understand that economic value springs from a concentration of eyeballs, then we are well equipped to see the value of "Trending", steemit.com "landing page". Trending is to steem what the port of Reykjavik are to Iceland - the place where our "imports" enter Steemland and where "eyeballs", our main export, is loaded unto cargoes.
In that sense, abolishing Trending, as has been proposed many times in the past, is an economic nonsense that would decrease the value of the ecosystem to the outside world.
Corollary
The well-meaning attempts of front-ends such as Steempeak and Steeve.app to offer an alternative to Steemit.com's "Trending" are actually counter-productive and are hurting the overall fiat value of the Steemland productive effort!
They are an illustration of the old saying "Cutting off your nose to spite your face"! Isn't that surprising?
Yes, you'll say, but "what to do with all the shitposts which land regularly on Trending because of the bots!?" They are giving a bad name to our beloved Steemland and must be hurting us too!?
Bots as a target for FPI
A fair question. But first, let us take a closer look at bots. We established that being high in "Trending" has advertising value which can potentially be monetized. Well, there is one thing I understood first empirically by growing up in communist Romania and then by reading Game Theory - the concepts of Nash equilibrium and of Strategic dominance.
People respond to incentives. If you create a system which allows people to make money by breaking a (written or unwritten) rule, then people will find clever ways to break that rule and abuse the system. If bidding bots and vote buying make sense economically (especially on a platform which has been from the ground up advertised as a monetization platform), they will appear naturally. And if being on Trending makes sense economically (this is where the eyeballs are, remember), then bidding bots and vote buying will be used to reach Trending.
But let's wind back a bit. Why is it that bidding bots and vote buying make economic sense in the first place? Well, because they are the equivalent of lending opportunities. They are enacting and harnessing steem's capability of extending credit, of playing the role of a bank. To an investor, with much money and little time, bots and vote selling offer a way to generate passive income! They are therefore very attractive!
Remember, we want "normies" to use their fiat to buy STEEM and stake it as SP! Well then the ability to generate passive income from that steem-converted-fiat is a very attractive value proposition!. To come back to the Iceland analogy, it's the equivalent of investing in Iceland's economy by lending to local entrepreneurs!.
It's called "Foreign Portfolio Investment" or FPI
Invest in Iceland? There's tourism, fishing and geothermal energy
In short, bid bots and vote-selling markets are another reason for people outside the platform to invest, buy steem with fiat because they offer an opportunity for passive income in exchange for "currency risk".
If you can stomach the plunge in the STEEM exchange rate from $5 to $0.3 (because you are invested long-term and only invested what you can afford to lose), then your investment is producing more steem for you at an eye-watering rate. And this "steem generation" is not, as in most other cryptocurrencies, simple "money printing" but is backed by real economic activity: the quest for a spot on the Trending page!
Thus "Trending" is doubly important:
- to advertisers for the "normy world" who get a place where they can expect a concentration of eyeballs
- to investors who can take FPI positions in steem and finance the craving of the Steemians to feature on the Trending page!
Corollary
Destroying "Trending" is thus doubly damaging. If anything, if we want the value of STEEM to increase, we should focus on making Trending even more of a focal point for the platform!
Conclusion
Implicitly, attracting more people to Steemit.com is also helpful - so for Steemit Inc, investing in the UI to catch up with the competition of Medium, Quora and Reddit also makes sense - even more sense than investing in upgrading the blockchain. Yes, SMTs would be nice, but improving Steemit.com is Pareto efficient.
One quick improvement inspired by 2017 Nobel Prize-winning economist Richard Thaler and Cass Sunstein with their "Nudge" book: replace the "$" symbol in the Steemit.com interface with something else! Steempeak for instance has done it! It changes people perception of the platform - they are not being subliminally told "your are here for a quick $" but instead invites them to understand what the "§§§" symbol means ...
Bad Trending content is bad, but if we want to fight bad content on trending then
- abolishing Trending is the equivalent of "throwing the baby with the bath water"
- deploring the influence of bots is about as effective as "marching against climate change" (i.e. not effective at all)
- downvoting and flagging as certain "socialist" presidential hopefuls are doing can have serious negative consequences if not done with utmost care, because it fractures the social bonds of the community. Icelanders too were much less productive when, following the financial crisis, they were dealing with internal strife
A prize of 1000 STEEM to whoever spots our dear Bernie in the crowd
That basically leaves one alternative and kinda' justifies what I am doing (are you suprised?). My advice for driving out bad content from Trending is to "fight fire with fire", i.e. ...
If you want STEEM to exert attraction over people who look for financial opportunities then, by all means, create great games on the steem blockchain and develop other businesses such as the "document notarization" business of Proof.ink and the "Memory Extension" one I outlined in a previous post. The more unique economic activities are available, the greater the attraction for Steemland, and the higher the Steemland GDP and its suitability as a destination for both FPI and "Foreign Direct Investment' or FDI
But when it comes to the "attention economy", then strive to bring as many well defined eyeballs to its "Schelling Point", the steemit.com Trending page by working and spending to make sure they will find there excellent content!
If you know what witnesses are and agree that people commited to keeping this blockchain ticking play an important role ...
(by simply clicking on the picture - thanks to SteemConnect)
Related posts
- What's Bitcoin's Value?
- How to buy Bitcoin in the Eurozone - Comment acheter du Bitcoin dans la zone euro
- Game Theory 101 - Schelling point or "Why Steemit.com is important"
- Steem crypto-economics
- Spammers gonna spam - focus on original content!
- My blockchain memory
Other posts you might enjoy:
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- The Steemit adventure [2]
- Help Yourself! (steemit for dummies)
- Best way to Grow on Steemit
- Turn up the Heat! Steem Luxembourg
- The best time to publish is now
- Historic evening: first beer paid with SBD in Luxembourg (+ Fr)
- Steem $10Bln!
- Setting up a new Witness Node!
- Why would anyone burn a bear? - SteemFest 3
- Steemit and the Fractal Society
- Crypto-contradictions
- Converting SBD to maintain the $1 peg
Blockchain, Crypto and Society
- Why Blockchain Is a Revolution
- A New Hope
- Hack Your Life in 3 Easy Steps!
- The Holy Blockchain
- Blockchain revolution: Money and Credit
- Small worlds
- The Press needs to be Freed from the Tyranny of Money
- Immigrate to Romania!
- Blockchain in large organizations
- Blockchain revolution: the CIOs' dilemma
- The Heist: How Big Blue stole Blockchain!
- Blockchain Explored - why the industry loves IBM
- Blockchain and the End of the Western Civilization
- The Church of Bitcoin
- The Ressolid Project
Blockchain and Europe
- Europe, I love you! - Europe, je t'aime!
- The Blockchain Competence Center (BLKCC)
- European Financial Transparency Gateway
- Toward a pan-EU blockchain infrastructure
- Blockchain and Data Virtualisation
- Blockchain, Credentials and Connected Learning Conference
- Decentralized Learning: The Future of Student Mobility in Europe
- The "war for [steem] blockchain talent" has been engaged - Fujitsu allies with EC
- Blockchain4EU
- Poker Champion Tony G turns MEP Blockchain Champion!
- Virtual Currencies - an EP report July 2018 - Part 1
- Central Bank Digital Currencies - Part 2 of the "Virtual Currencies" EP report of July 2018
- Blockchain taming the Dragon of Corruption
- Sovereign identity on blockchain
- Blockchain and GDPR - a Call to Arms!
You might also want to check out
- my “lighthearted” account, @sorin.lite, perhaps you’ll like what you’ll see.
- the Ressolid account
- the Witness account, @lux-witness (and even approve it, perhaps)
Def part of the ecosystem!
What you’re saying is true but there is one important detail you missed.
Bid bots would have been the best thing ever IF advertizers actually paid. By paid I mean pay their money and actually loose it, by burning steem.
The way bidbots work now is just abusing steem’s inflation (the reward pool) because when the bid bot upvotes your post to promote it, it also returns your payment (with a one week delay).
So effectively the bid bot system is good as it holds a certain quantity of illiquid steem power in place for seven days, but that’s not enough to raise the price of steem.
What we need is an advertising model on steem where advertisers have to burn steem in order to get on the trending page. This will directly decrease the supply of steem and increase it’s price.
Unfortunately bid bots that abuse inflation make money for everyone, so of course people will use them (as you said it’s better economically). So the only solution I can see right now is to act against them in a centralized way, a concept I don’t love.
Steem must be burned to promote on the trending page, and Steemit Inc must use their huge stake to allow this to happen, by downvoting all bid bots votes and creating a promotion system that is better than having a separate promoted page.
Posted using Partiko iOS
I'm not discussing whether bid bots are good or bad. They are! They are already here!
What I'm discussing is how to attract investors to buy steem and stake it in the platform (in order to increase the price of the token). Given the bid bots. Whether they are good or bad or could be better is beyond the point of my article
When I say good, I mean increase the price of the Steem cryptocurrency, and when I say bad, I mean decrease the price. It wasn’t very clear from my comment, thanks for pointing this out.
The way bots decrease the price of steem is that it repells users from coming to the platform, as they don’t enjoy the content. This means less eyeballs, so less value created.
The amount of staked steem for 7 days is probably not enough to compensate for a big loss in the quantity of eyeballs, but having some coins burned forever will compensate for the loss of eyeballs (in terms of price).
This is just my opinion and it may be wrong, maybe (and hopefully), people don’t mind the trending page that much and will remain on steem even though they complain about it.
Posted using Partiko iOS
I disagree. Bots do not repel users from coming to the platform. Bad content repels users, and inflated and deceived expectations.
Let's look at the latter first: people are brought here with the hope that they will write something they like (or post a picture they did) and will earn significant amounts. Some of this false hope is given indeed by the amounts under posts which have been pumped by bots, but the error is in coming for the money
As for the former, bad content can be fought in various ways. The way I propose to fight it is by "drowning it in good content"
But don’t bots bring bad content to the trending page? Since anyone can have a positive ROI for promoting their post then they might as well right the easiest post possible and promote it to the trending page. This is how it was for a while.
But I see your point, if good content gets promoted as well, then some people will upvote it on top of the bot promotion. This will cause the good promoted content to drown the bad promoted content. I hadn’t thought of that. I have actually started noticing that the trending page is getting better compared to how it was a few months ago.
You just earned a follow from me!
Posted using Partiko iOS
Thanks.
"Weak humans" bring bad content to the trending page. If humans were not so wretched and weak and always did the right thing, we wouldn't be where we are today ...
Bots sprang up because there was demand - it's simple economics: there's an unfulfilled need which can be fulfilled economically, someone is bound to do it sooner or later and the first will get the highest rewards ...
So we can change the economics of steem by for instance tweaking how downvotes work (good luck with that). But until you manage to get witnesses on board with that, let's do something within the boundaries of the current flawed rules
Have you thought about the cost to good content creators because of the lack of curation? If more people buy votes, more people will delegate to bots. The amount of SP for manual curation will keep shrinking.
The frequency of bot voting is also hurting investors such as myself as the value of votes are decreasing. I see an increase in the number of bots and delegation to bots hurts both investors and content creators.
The whole idea of manual curation seems to be a bit naive. Well intentioned, but it doesn't seem to work.
People will buy votes so other people will delegate to bots. As long as you have "people" in the equation, I don't think it will change. Bots hurt the ideal mechanic of manual curation, it's clear. So you can make many proposals on how to correct that and many proposals have been made already
I reckon the only approach is to admit that people won't change and manual curation, like communism (based on an ideal, altruistic human who "gives to the society his best and only takes from society what he needs") simply cannot work.
Once you went to the grief, I propose to embrace the bots - live the system for what it is, not for what it should ideally be
I certainly don't like the idea of Steemit Inc using their SP to get involved by downvoting bot promoted content. I would rather community action against it. Considering the cost of downvotes, I see this as unlikely. @spaminator and @steemcleaners could include buying votes from multi bots as a form of abuse. High valued downvotes from these accounts would reduce the buying of votes very quickly.
Any action that puts an end to or greatly damages the profitability of bots should be met with an alternative form of income from stake. Higher curation rewards and possibly curation beneficiaries to delegators could help.
I imagine such would be a simple front end implemention but unfortunately would not counteract the impact the bots have towards distribution. I think that is the foremost issue that people neglect.
The bots create an economy where self-seeking thrives in leiu of cooperation. It is likened to a body whose parts cease to function for the good of one another.
It is like a cancer and those kind of users are growing in greater influence relative to their counterparts. Same applies to circkejerker but in a sense vote selling is just another flavor of collusion. These users are OP at the moment.
We just need to create the platform (not ruling out that it could be Steem based or a complementary side chain) that will pull the rug out from under them.
That will be sweet sweet justice and I long for the day.
Posted using Partiko Android
Didn't realize you were a bid bot shill.
Only people that make these weak arguments are vote buyers like yourself as well as sellers.
Your kind are destroying proof-of-brain and we would do w to fork you all off for collusive voting. That's what you are doing. Bribing bots!
Is your sense of your work SO weak that you cannot suffer it to stand on it's own. It's not a bad article. I've seen worse from participation trophy buying bid bot users. It's still overvalued.
Flagging for disagreement of rewards.
Fair enough. I didn't explain well enough - the rewards are not "real", I paid to get those rewards. The goal is not the rewards but to "occupy Trending" with good quality articles - in order for poor articles to have more trouble getting there.
I'll write another article, I came up with a new analogy.
I am not a bid bot shill, I don't need to be. Bid bots do not need me to shill for them. They are here and they are in rude health, I'm sure you noticed
Yes, I am a weak human, like a vast majority of our species, I respond to incentives. Actually, my analysis back in 1991 led to my conviction that Marxism and Communism can never work - they were predicated on strong humans who always do the right thing, even when it means acting against their own best interest.
That is not going to happen at scale, ever. You can have a group of strong people up to about 200 people, studies indicate. Above 200 people, game theory applies and "prisoners are defecting" and then it becomes stupid not to defect ...
Sorin seems like a nice guys and all and i dont think he is "shilling" here... The problem is that he doesnt seem to understand what general sentiment and perception of STEEM as a failed project is doing to the price.
Where ever you go online in the crypto space and mention STEEM, the first thing they say is: Oh, isnt STEEM filled with bots?
They dont even know how bots work here, but they know something with bots is going on....
Not only are bots not another reason for people to invest, thyre actually the reason for many to stay away.
Im not saying bots dont have a place here... Im saying that as they exist now, thyre hurting the platform immensely.
I am very concerned as an investor. Steem is getting negative attention because of the bots and the problems new users have at receiving attention and rewards if they don't buy Steem to pay for bot votes. On top of that new users need to buy Steem for resource credits.
I feel Steem has gone from inviting people to earn rewards to inviting people to pay before being able to have any sort of reasonable experience.
Our retention rates are horrible. We need to keep people here and viewing content. Advertising won't work if there are no eyes on content.
Agreed. If you make it so hard for new people to on-board, at least create some sort of earning potential for them.
If you make it so hard for anyone to earn any money here, at least make it easy for them to on board.
Problem is that both things are poor on Steem and when that happens then the superior choice for blogging is always Medium, superior for gaming is Eos or Eth, for communities Reddit, etc.
When everything is made so difficult, even if youre not here to just "make money" (as if thats a bad thing) seeing the boting self gratification leaves a bad taste in your mouth and retention goes down the toilet.
First of all, thank you for promoting my ebook, you are the first to do so and that is amazing :D
Thank you for the in-depth analysis of the steem ecosystem economic dynamic. I would like to add to this the power of goal-oriented communities.
I believe that one of the key points of the steem blockchain is the power to incentivize certain types of behaviour without going into your own pocket. I am not an economist, but I believe that this is the only economic system where this happens and is feasible at a large level. And this is something we need to leverage to the max in order to increase the value of the whole ecosystem and subsequently of steem. I believe that @utopian-io and @steemstem are on the way of doing this, exporting content and solutions that brings value to the ecosystem.
Maybe we need to create a goal-oriented community that has the purpose of raising the value of steem and your idea of making sure that good content lands on the trending page can be done fairly decent with a coalition of 6-7 million SP. A curation trail that has the goal of promoting 2-3 articles per day to the trending page can be created so that the curation rewards still go to the original SP holders, which is much easier than getting delegations worth millions of SP. We would need to outline a clear strategy for content that is valuable to the ecosystem and maybe we can also coagulate that content in a separate condenser which does not have the problems which steemit has and we can use the money generated from adds to further promote the steem ecosystem. This would be a project in which I would gladly be involved :)
Can't wait to hear your thoughts on this :)
Doing what you propose requires effort - quite significant amounts of effort from many people. In order to get enough people "rowing in the same direction" there are basically 2 ways:
My hunch is that if it could have worked, it would have already been done. It's a good idea that is probably not doable ... But maybe I'm too pessimistic ...
Why anyone would think the finding a bigger fool to buy your steem is sustainable is beyond me. If it hits a dollar again do you think anyone is going to buy it? No one wants it at 30 cents.
The idea was to keep increasing the amount because there would be more and more users, but that's not happening. People leave in droves, and new people are shut out. There is a concentrated effort to upvote introduce yourself posts but after that your choice is buy steem or make 1 cent per blogs forever.
I don't have an answer to fix it. Get rid of bidbots and all the high steem power users will just vote for each other. There is very little altruism, the occasional buying of a wheelchair, but day in and day out it's just greed.
The whole thing was missold. It's not about rewards. If you focus on rewards you are bound to be disappointed. It's a platform to be creative and find other creative people and their creations. I like to write, the rewards are the cherry on top. If you come for the rewards then you are doing steem wrong
Are you interested in creating content ? Are interested in reading something that others have created ? If yes, just do that and forget about the rewards, think of this as Facebook with a twist. Billions of people spend days on Facebook and write stupid things and share them and read other stupid things that others have shared. And there are no rewards. Do the same here, forget about the rewards, they will be the nice surprise at the end
I agree, if we didn't have bid-bots, circle-jerking would return as the biggest problem.
There are several options on the table to increase accountability of voters. E.g. higher curation rewards and free downvotes. Many witnesses claim to support these initiatives but have yet to act on anything. There is also Steem.DAO, which could encourage initiatives.
Some of the Dapps help support new users. I post using actifit every few days. Actifit are great for distributing rewards fairly based on activity. I'm sure several of the other Dapps do that as well in a similar way. There are still opportunities to turn things around.
Oh no, you got the analogy all wrong..
Its not about the old run down ships that are docking in the port. Its about the toxic waste dumped in the harbor that is killing all the fish and stopping quality traffic from coming into the harbor.
Not only should the port be dismantled, it should be bulldozed, its remains quarantined and a plaque placed high saying:
What "it should be" is beyond my point. We have been here long enough by now to know that changing something so central as Trending is akin to persuading turkeys to vote for Christmas.
Perhaps it will happen one day. But what do we do in the meantime?
Are we going to keep writing endless lamentations about how this place is going down the drain and how things should be done better all the while nothing changes?
Here I am proposing a pragmatic approach to make the best out of a dire situation which indeed illustrates our collective failure as imperfect, wretched human beings.
You, me, him, we know we write good, original content that is better than many shitposts being pumped to trending.
You can either wring your hands in despair and lament the situation in litanies about how things should be.
Or you can put your money where your mouth is and contest the Trending, fight for it with your SBDs!
Yes. Thats what you do when things suck. You point it out. And the trending issue can be fixed very easily. Its a steemit thing not a steem one. Steemit inc can choose the algo they use for content placement. They could very easily just make a seperate no bot trending.
They could, but they won't. Because some people like it the way it is. And their voice is strong enough to prevent change.
I'm sure you know Hirschman's "exit, voice, loyalty". You are advocating "voice". My article says that at some point "voice" is dissipating productive effort and holding us back and "loyalty" is not absurd and would be much more beneficial to everybody who is not so pissed as to "exit"
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Excellent ! Good one! :-)
We really enjoy your posts and you maybe have some time to join the steem meetup aachen at the 22.3.19 in Aachen for some discussions or even a short talk/speech about your projects.
Thanks! Looks feasible. Are we connected on Discord ? Please send me the details so I can put it in my agenda.
Very good article, and the thinking is somewhat along the same lines as mine. Read your posts, perhaps some months ago, and good to find you posting again.
The so-called bidbots are a logical consequence of the Steem code. There are 2-player exchanges that are profitable and predictable, such as exchanging a transfer for a vote, hence they exist. But such exchanges are also content-agnostic and hence, in some peoples views, counter-productive in a content-based-economy.
Also amusing to mention GDP - I've been thinking of how such a measure could be defined within a crypto-space. As you say, one problem with Steem is that it is used as a gateway out into fiat so that coins do not flow so much around the economy.
Will read some more and will, no doubt, have some more comments :-)
Indeed, the key to a higher value for STEEM is to have more reasons to NOT exchange it for fiat. The more transactions are being mediated by STEEM, the higher its value
Have you had any thoughts on a metric similar to GDP for the Steem economy?
sales and purchases of coins are slightly hidden in that they appear as any transfer, except to a known exchanger's account; there isn't a "sale" transaction as such. Which also means that STEEM is never really sold outside of the economy.
If I had been an economist, it would definitely be an interesting topic! :-)
But I'm just a "blockchain guy" with an amateurish interest in economics
So glad many Steemians are beginning to realize that the ethical bid-bots are one of the greatest things to ever happen on Steemit. Not only do they provide a way to lock up Steem in the form of SP, which reduces circulating supply, but they also give an annual ROI that is almost unmatched anywhere else in the crypto ecosystem.
The only minor issue is the bid-bots that don't screen for horrible spam content.
Not screening spam content isn't a big problem, it's just a matter of time before buying a vote cost most than the reward it can earn you.
The problem with bidbots is those who don't have any max cost protection.
If for example the weekly cost average is 2% for a vote and two people send a bid for 90% of capacity at almost the same time it will incur a 60% lost for both while it was clearly not what anybody sane had in mind.
The cost of the vote is variable and usually dependent on demand at that particular time, no?
The big bid-bots have protection from max downside loss. Smartsteem and The Rising for instance have 10% max loss on each voting round.
Are you taking inflation into consideration when you compare ROI from Steem bots with ROI for other cryptos. Last year, we had about a 25% increase in supply of Steem. If the bot ROI for last year was less than 25%, then that is a very poor return.
The reduced supply of SBD should give us closer to the 8.5% for 2019. Maybe the ROI will look a little better. Selling votes through bots is not great a return. If you want a great return, invest in something that brings money from outside the Steem ecosystem. Delegating to a DApp and obtaining a share of ad revenue could be an example of a better return.
I just wanted to add to your introduction about the money supply. Money is created whenever a business, private company or the government is requesting a loan from the banking system. Every new loan created in the Banking System will become debt and therefore new Money.
It is a false perception that central banks are printing "most" of our money. Its private businesses and individuals who are everyday requesting new loans and paying off old debt.
To make a brigde to our Steem Ecosystem...I would love to see a "loan" mechanism that is funded by the Steem Inflation rate. Whenever a business wants to build something here on Steem they should be able to receive a loan (if they have any valuable assets as security) for their project. With that loan new development and projects will be funded for the Steem Ecosystem and the Businesses also have to pay back the loans with Interest. This interest could be "burnt" or re'invested into the Steem Reward Pool.
With such an mechanism we would have a great tool for funding another tool to influence the inflation rate and the Reward Pool. And it would support new Development and Businesses here on Steem.
Now our Inflation rate is tied to real economical growth and business projects.
What do you think about this idea?
Thanks for your great Post!!!!
There are loads of good ideas floating around and as much as it hurts my pride, nobody gives a flower about what I think of them :-)
What matters is what gets implemented. And what gets implemented depends on the politics of steem with the Discords and the "other communication channels which shall not be named" and so on and so forth. Like in real life :-)
Thanks for contributing to the debate! :-) I let the "powers that be" answer what they think about the loans idea :-)
Is not easy to learn to cohabitate with bots, but on STEEM we do it better than in any other environments. Bots can be bad or good, but same with humans. I believe that this is the struggle that will help us to evolve from the past lives, and come closer to the intelligent machines.
Ico's have faded, yes, but many of those projects have actually come out with their products now. The best example currently is Maker and its stable coin Dai. Maker, only one team that raised funding through ico, is close in market cap to Neo! That's huge. And there's ton of these projects and teams building on Ethereum.
Also it seems to be the blockchain that the big companies like Samsung have opted to adopt. There are many reasons for it, too many for me to list here.
But if you don't own eth, you're doing crypto wrong. Don't be that guy
I do own some ETH and a sprinkling of tokens too. But I'm an IT architect by training and I know bad design when I see it. Ethereum is an implementation feat, but a very poor IT design. It goes against good practice by strongly coupling data tier and business logic. Maker is an exception more than the rule. I think you'd be at pain to name another 2 or 3 really successful things built on top of Ethereum.
Market cap is not indicative of much at this point in time (or else what are we doing on Steem, its market cap is lousy).
Many companies have adopted Ethereum because they don't know better. As I said, blockchain is incredibly complex, I go regularly to conferences and am appalled at how little people get from the concept. They basically feel like superhumans when they understand Ethereum and think that they have it all figured out
I'm ready to bet that Ethereum, in its current architecture, is heading nowhere, but I'm prepared to be proven wrong (I've "hedged" by owning some, in case it moons despite my negative opinion :)
Interesting, well good to hear you've hedged your bets. I hope others are as smart as you. There are several other dapps with promise like Augur,Brave, Digix, Status, Breaker, OMG and so on, but it's too early to talk about really succesful products, but the thing is, they are being built and are ready to be adopted. Can't say the same for Steem really. Oh yes, we have drugwars and Steem monsters :) Have you tried them? Lots of hype for... not much.
And it's funny how you mention how much sway Vitalik has in Ethereum, yet Steem is a lot worse in that case with Steemit Inc and premine + handful of whales controlling majority of the stake. And due to way Steem is structured, these guys can keep milking the system until the end of times. I'd rather not support that with my own money, especially seeing what we get in return. This place has mainly been a dissapointment, and I'm here because I saw promise in it, but it seems the goal was never to reach that state, a huge let down.
Thank god lots of devs are busy upgrading it then.
But even though Steem is a failure in my eyes for now, I'll hold on to some small amount of tokens, there's not yet a good competitor and perhaps one day major stakeholders actually start caring about something other than their short term profits. Until then, I'm looking elsewhere for projects that will hit mainstream.
Wait, are you saying that Steem, where "a handful of whales controlling majority" is "a lot worse" than Ethereum which is basically controlled by ONE person ?
I mean, oligarchies are certainly not great but I tend to think they are an improvement over an absolute dictatorship
I elaborate this here Why Blockchain Is a Revolution
Back to dapps, enough saying that I use the "social apps" (steemit, partiko, steempeak, esteem, etc.) almost daily - as I say in one of my first posts I always wanted to blog but was terrified by creating a blog that nobody would ever discover let alone read. Steemit fit the bill perfectly. On the other hand, I've never felt any need which an Ethereum based application would fulfill.
But your mileage may vary
Well Steem really is controlled by one entity, Steemit Inc and its massive stake that's being hidden now actively by Ned. Accounts like Pumpkin and Freedom get to choose witnesses and so on. So not really oligarchy even, more like Putin and his cronies who get to leech from him.
How is Ethereum controlled by one person? What I've read lately from Eth dev meetings is that Vitalik seems to have no power at all.
Yes, Steem still has promise, sadly the premine is still holding it back. When it comes to Steem, it matters a lot who controls the stake unlike in other blockchains.
Errr, I thought Putin and his cronies are the textbook definition of an oligarchy :-)
I don't see how the premine is holding steem back. It sounds a bit like saying "the real world is held back by the fact that some people have started vastly richer and more powerful than the vast majority" True, but it didn't prevent the world from progressing ... Steem is rather held back by the lack of leadership and vision and the fact that nobody is yet familiar with "cooperative ownership" as we experience in blockchain environments. So we tend to mentally rely on a strong leader instead of assuming leadership ourselves
"Errr, I thought Putin and his cronies are the textbook definition of an oligarchy :-)"
Yes, and to many, that's what Steem is with its huge premine. I've tried to market Steem, but anyone with few years in crypto shun it for this reason alone. Have you tried?
"the real world is held back by the fact that some people have started vastly richer and more powerful than the vast majority"
Yes, and the point of blockchain that there's now alternative to that kind of system, so people rather not jump to a system that's just more of the same.
See, the problem is that there's ton of other blockchains as well, and the problem is getting them to join Steem when there are other systems that are deemed way more fair and decentralized. Huge premine,only 21 PoS nodes selected by it aren't exactly shining example of that.
But Ripple has garnered traction, and for that reason I think Steem will have its chance as well, we really just need to start pushing forward more. As you said, there's serious lack in leadership and vision over here.
I think the stake is in the wrong hands, to them Steem is just profit maker, a small one. It needs to be in hands of people who live and breath Steem... I'm not sure if we have enough time to see that happen, cryptospace is moving fast.
Steemit Inc pulled +30 million dollars from this chain and has managed to give very little back, funny to see the change when witnesses started to discuss kicking them out.
I've actually thought what would be required to replicate Steem on Ethereum using Loom PoS sidechain or just normal plasma, since I actually like the core idea of Steem, where network members get to reward others from shared reward pool. Witnesses probably wouldn't be needed at all and all the inflation could go to creators and stakeholders. Also the supply creation would be controlled, rather than dumping it all to few early entities who then control the whole system.
I reckon it could attract support within Ethereum community if the system is deemed fair
The reward pool is a fundamental feature to social behavior. I don't see how you can do that with plasma as that is purely a technical trick to increase transaction speed. "Replicating" would basically mean redeveloping Ethereum. I don't know enough about Loom but again, if you don't design around it, I believe it's naive you can "replicate" the reward pool. And there remains the powerful repellent of "paid transactions". Ethereum is built around the idea of transaction fees. This is a UX killer. To me, you vastly underestimate the differences in design between Ethereum and steem
That's where Plasma and Loom come in, they provide almost feeless and instant transactions.
Isn't it just code?
Great article agree with everything, maybe because I came from ex-communist country too which ends in blood, tears and chaos and I know, well, I'm 100% shure that people are not perfect and Steem blockchain is not perfect. Also, someone mentioned other blockchains, I"m sure, if they run or try to run similar social environment, the problems will be the same, because behind are the same weak people...
Yep, that's an important point I try to make every time ... usually with limited success. Everybody tends to think that if only THEY were in power, things would be so much better!
I never saw a post so complete about it.
Great job
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Thanks!
This is a great way to associate the opportunities and challenges presented to us here in the ecosystem. While many are still quick to judge the many routes of engagement; it is all part of our ways to interact with game theory against the proposed proof of brain concept.
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Great piece @sorin.cristescu. The metaphor to Iceland is amazing!
Thank you!
Great article man. I enjoyed the read
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thanks!
Concluzia m.a facut fericit si pretul steem la .0087btc speranta e puternica
fara graba, avem de munca!
This post has been included in the latest edition of SoS Daily News - a digest of all you need to know about the State of Steem.
Thanks @pennsif
Wow, really good article with constructive arguments. Thanks for sharing your thoughts about the Steem ecosystem and greetings from Germany!
Thanks! Are you planning to come to the Aachen meetup?
Nice article @sorin.cristescu . I think "be User friendly" is the first step for success.
Agreed
Excellent summary of many great posts I read about what steem stands for.
Steemit or other groups need to higher creators to regularly post good content and help make it trend with their chest
I agree to replace that $ symbol
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I truly believe STEEM offers currently a lot of value to the world through Steemit; will be captivating to wait and see what other dApps will be able to render once SMT gets launched.
Https://steemax.trade is the alternative to bid bots.
Instead of paying for a vote, why not trade your vote with others?
Asking to trade votes always sounds better than just asking for a vote, and definitely better than paying for a vote. ;) SteemAX takes no fees or commission, so you get 100% of what you put in. Bid bots are for profit and take a cut. You can read my whole article here:
https://steemit.com/steemax/@learnelectronics/steemax-the-vote-4-vote-auto-exchange-app-a-hardfork-20-strategy-guide
Shill STEEM to Icelander. Maybe they'll pay Evey with STEEM because no transaction fee.
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Great idea. I just need to meet some Icelanders :-)
It's been quite an experience being part of the Steemit community. There is a lot to learn not only about Steemit, but the who cryptocurrency scene. I suppose we should all be glad that we started early as pioneers. I'm looking forward to what the future holds.
Following
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STOPVery good written. Thanks.
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Fascinating article! I greatly appreciate you listing your additional links on related topics. I'll be definitely checking them out!
I also see you have a great interest in Iceland. I visited last year and I recently posted a photo I took of Gullfoss that you'd enjoy :)
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