I guess you didn't read the whitepaper... this is coming straight from investopedia:
Every 3.32 years, the Steem network undergoes a 10:1 reverse split, meaning each 10 Steem tokens become 1 Steem. This effectively limits the window of quantities of Steem which are available. At the same time, the value within the broader network gets redistributed over time, so that users who are more committed to holding Steem tokens of various kinds end up with a greater portion of existing tokens.
The number of Steem available is set to double annually, making its supply growth exponential - a possible drag on its future value in the market - but there is a catch in that every 3 1/3 years, there is a self-generated 10:1 reverse split in the supply, resetting the process. For example, if the total money supply where the following: (See also: Bitcoin Extends Rally)
Year 0: 500 Steem
Year 1: 1000 Steem
Year 2: 2000 Steem
Year 3: 4000 Steem
Year 3.32: 5000 Steam (reverse split now occurs, and the number of Steem goes back to 500 and the process starts all over again)
Let's stick to primary sources, I have no idea how accurate "investopia" is. The white paper can be found here:
https://steem.io/steem-whitepaper.pdf
You want to go to page 21 where it says this:
I couldn't see anything about the reverse split, feel free to point it out and I will take a look.
Thanks
@kabir88
Ok, it seems that the whitepaper was updated 11 months ago into a new form and the reverse split info was removed... my question now is, the info was removed or the function was removed? Probably the function, guess no more reverse split :P
https://steemit.com/steem/@steemitblog/a-radically-updated-steem-whitepaper
look here into the "changes" in the new whitepaper, it seems they removed the split
Thanks for checking! You had me worried for a second.
NP, being wrong is part of being human xD But the thing is i could understand the reverse split.. it would "hinder" hyperinflation a little... don't you think?