This post has been two weeks in the making. It'll be long, apologies for that, but kindly bear with me - there's some interesting observations here!
There has been considerable speculation about the inequality on Steem. It has caused a lot of anguish to some, while most have understood that this is a known effect, if not a central tenet, of the stake-weighted reputation system.
The controversy - Is Steem increasing inequality?
Since joining Steemit, I've been meaning to get down to the bottom of it. Sure, the system will not work if everyone has the same vote - it'll always in inequal, just like every economic system in the history of the world has always been. But at its onset, Steemit had a startling GINI co-efficient of 0.98. The (unfair) accusation lobbied by some was that Steemit will just get more and more inequal to the point where all the power will lie with just a few people. I was concerned too
For the last two weeks, I have been diligently tracking data from Steemd.com. Across 200 data points, I have now compiled it into one single stacked chart that definitively answers that question.
It's a resounding NO. The numbers speak the truth - I'll let the chart speak for itself. Steemit is getting more equal! It's a massive and rapid redistribution of wealth, in just 2 weeks.
I'll explain it all, but first, let me step back and briefly run you through my process
Methodology
I shall keep this as simple as possible. If you wish to learn details, please comment - I'll reply.
The intention here was to survey the change in impact of the various tiers of Steem Power holders on the Steemit community. This is not about overall wealth - though I'm collecting data for that as well. Nor is it about number of people getting rich. To that intent, I'm collecting data on Active 24 hours and stake percentage from Steemd.com Distribution.
Every day, I would collect three sets of data for each level at the same times. As Steem is still a relatively small community, there are major deviations. I've tried to smooth out these anomalies, though as you'll see, there's a major one - the temporary closure of registrations.
Steem Power vs Vests
OK, so the title is misleading, what I'm really looking at is Vests and their percentage stake for each level. This difference between Vests and Steem Power is crucial in understanding why the top 0.1% are happy to redistribute their stake. Briefly, when you invest in Steem Power, you are really investing in Vests. You own a small stake of Steemit - think of it as shareholding. Steem Power is just the Steem value representation for your Vests at that moment. As the platform grows, so does the value of each Vest. Each Vest is worth more Steem.
For instance, 20% stake of a $100 pie is more valueable than a 10% stake of a $300 pie.
Now, let's dive into each tier.
Over 1 Billion Vests - The Whales
There about 50 Whales or, as I light-heartedly like to call them, Stars. They have an enormous impact on the community. Over the last 2 weeks, they have been busy grooming the community.
This is the easiest conclusion - the Whales are busy redistributing their wealth across the platform, generating Steem. It's a sharp decline, barring the anomaly caused by the temporary closing of new registrations.
It's easy to see what's happening here, whales like @steemed are grooming the next generation.
Over 10 Million Vests - The Dolphins
We have two tiers for the Dolphins - 10M+ and 100M+ Vests. Some may call the 100M+ Orcas, I like to call them Planets or Minke Whales. :)
So, this is where the whale's re-distribution is going - to the 100M+ tier. There are 170 Steemers in this category, but growing every day. These are the top creators of Steemit, who the Whales are grooming to be Top Curators. It's an enormous increase in stakeholding - from 14% to 20% in just 2 weeks!
The 10M+ category is pretty much holding steady, though we get a hint of an imbalance in the system right now which will become more apparent in the next section.
Going forward, it will be the responsibility of the 100M+ dolphins to promote the 10M+.
Under 10 Million Vests - The Minnows
There is a LOT of activity here! 0.1 MV minnows are constantly being promoted to 1 MV minnows, while minnows become dolphins. There's a lot of variation, but the general trend is still up.
The only (ostensibly) spot of concern here is the 0.01 MV minnows, who make up ~80% of the community. Their stakeholding is decreasing. More and more Steemers are promoted upwards, but less and less are coming into replace them. One perspective is - Steem is redistributing too fast for its own good!
So there you have it folks. Steemit is in a very healthy state. It will always be a Zipfian distribution, of course, and that's OK.
Of course, it's only been 2 weeks. I'll continue to track these trends. I'm also working on a post about overall distribution, but it will take one more month to collect enough data.
Thank you for reading! I'd love to hear your thoughts and interpretation.
Your post is an eyeopener for me, its a whole ecosystem here. I like the way you say whales are grooming the next generation. That's so true and they get to influence what direction steemit takes.
I wish I was groomed, I just woke up!
Good read to start my Saturday!
You were absolutely right @dailyhobbyist :) Thank you so much for your support.
More than the upvotes, I'm more excited by the discussion it's sparking. Would love to see more interesting comments!
Thanks, I'm thinking I might have posted this too early in the Saturday morning!
not that early! Good luck
Thanks! This post is heading into the void though :(
Don't think so told you ! You should show some love back now lol
Cheers!
Yes, I made similar point yesterday. I believe Steem is still representative of the natural #wealth-distribution we tend to see on earth. But working to together, we can all make a difference.
Wow, this is great work. Fascinating data, for sure. Thanks.
Thank you @stellabelle :)
As you know, you have been one of my influences. I hope to follow in your path.
I also think your story is the perfect representation for this - how the whales (I even mentioned @steemed in my post, wish I had mentioned you too!) have recognized your talent, groomed and uplifted you into their company.
@liberosist, I meant to comment on this post yesterday but I wanted to wait till it hit the trend list because I knew it would. This work needs to be acknowledged as it is great work!! Yet another example of good authors being recognized. Congrats on being recognized.
Thanks a lot, @jacor. I know you have been following and supporting my posts, couldn't have done it without the encouragement from steemers like you. :)
You're one of my favorite new authors too. Keep at it!
A better form of trickle-down :)
I like to call it chucking-down :)
Thanks for visually showing us the numbers behind whale and dolphin influence on Steemit. It's one thing to see the complainers post about how whales are going to be the end of this social community. Sometimes having the evidence out there in front of you can be reassuring. The math also supports the idea that whales and dolphins are supercurators in a sense, with the influence to guide content in leaps and bounds. From there, it's a snowball rolling downhill.
Yes, it finally makes sense once you see it in raw numbers, and especially in visual form. It remains to be seen how the Dolphins bring up the Minnows. I think we'll get a better sense of that in my August update.
Not that it matters but some of the redistribution may be from selling off-- not necessarily due to the mechanics/internal economics but regardless, it still matters. I'm happy with the direction it is taking. Good post.
That's a good point. However, the Powering Down process - which is the only way to de-vest - takes a long one. So even if someone were to power down 100%, that would be only be reflected as a ~2% decline in 2 weeks.
Very true and something I failed to account for. Good point.
Though the process would give around 1% per week right? As a whale, that might have some significant effect. But overall, I agree with you.
Yes, 1% per week, hence the 2% over 2 weeks. It would only be a worst case scenario of a 2% effect if ALL of them decided to power down 100%. Which is clearly not the case. Seeing as the decline has been nearly high single digits, it's definitely not a factor here. Within margin of error.
Wow! Amazing post. You summed up how the community is progressing, and pretty much addressed one of the major issues people think the have with the site (the people at the top just doing something to make themselves rich). Its a great trend, and hopefully a look forward into the exiting future ahead!
Indeed! It's also important to remember that while their stakeholding may be decreasing on a daily basis, their wallet's values are increasing as the platform grows, and the value of each Vest in Steem increases. So, it's not like it's charity - everyone wins here. Of course, one questions how sustainable this model is, but I'll continue to follow these trends and see how it unfolds. From what I have looked at, as long as growth is sustained, Steem will continue fueling itself. Of course, it hits a ceiling at some point, but my guess is it's going to be a few hundred million users before that happens. Long way to go!
Hope so too! You may be interested in reading my article walking people through the process of purchasing Steem/SP. My thought is that there are a lot of people who are excited about Steemit, who may not be that informed about Bitcoin/crypto-currency. If we could help these users get involved in the investment side, by trying to help them over the learning curve of buying coins, we may get more heavyweights entering through the investment side.
https://steemit.com/steem/@timcliff/steemit-how-to-invest-in-steemit-com-through-the-purchase-of-steem-or-steem-power-in-10-easy-steps
I'm a tiny little monnow with so much to learn. Thanks for the post. Steemit is really an enormous Symbiotic system.
Thanks,nace post
Great job. There's still so much to learn!
I feel special :)
And as a dolphin I think we have GREAT responsibility.
I wrote about this here.
https://steemit.com/steemit/@razvanelulmarin/i-am-now-a-hero-taking-on-the-challenge-to-steemit-as-one
Congrats on making Dolphin! Or baby Dolphin anyway ;) Great post, by the way!
Yes, your curation matters now. It's your responsibility to take deserving minnows up to dolphin status. :)
Always looking up fo that. thansks!
Why do you compare only active 24 hours users and their stake percentage and not all users? Because I saw another statistics here: http://steem.link/egiWt
For this post, I was looking to gauge the impact of alleged inequality on the Steemit community. By a greater stake-holding being transferred to more people, that's going to spread the influence and power of upvotes across a greater number of people. Hence, stake percentage.
Reason why I chose Active 24 hours is because these are the people who have the greatest impact on the community as well.
By the way, I'm sure many of us feel this subjectively as well - there's more diversity starting to show up, and some creators are gaining more influence.
I'm working on a post that tracks all users and also the percentage of users for a certain bracket instead of stake-holding. But those trends take longer to make themselves visible. Hence - that will take one more month.
Do let me know if this makes sense!
Ok, maybe that make sense. We should continue to take data for longer period. And I think we should ask developers to add historical graphs as in your post to steemd.com itself in order to make this information more transparent.
Yes, that'll definitely make it easier. :)
But you see, you are making the same point. There are 2 more users who were previously dolphins become 100+MV hit 1000MV. You can see in my graphs there's an uptick 3-4 days back, with only 45 of them a small change makes a big difference. That's why it is important to collect data for a long period of time. And over 2 weeks, it's clear what is happening. Also, the All Users shows a different perspective with many, many new users with miniscule stakeholding joining, which skews things. Active 24 Hours eliminates the effect of inactive users.
Simply put: "How do we know the dolphins aren't just aliases of the whales?" Simple answer: "If they are; than they are acting incorrectly for maximizing monetary withdraw from Steem."
Have you determined by what means the wealth is being transferred from the 1000 MV ($millionaire) whales to the upcoming 100 MV ($100,000) orcas? When money supply is 100% in STEEM POWER (SP), the debasement to pay for blogging comes out of SP holders relative value, but when the ratio of SP to STEEM is 9:1 or lower then the debasement is coming only from STEEM, so in this case the whales must be cashing out and the debasement is charged to the STEEM held by the exchanges for liquidity. If the latter (which likely to be at least partially the case if the STEEM on exchanges is not insignigicant % of the money supply), then we have the whales upvoting their gfs and friends to transfer the wealth debased from those holding STEEM on exchanges, while they themselves cash out. The groupthink is diversifying far too slowly due to the iron lock that the upper 1% has on rewards earned.
The attrition rate of signups becoming permanently inactive appears to be about 80%. Replacement by new signups (especially if rate of those are growing exponentially) masks the attrition rate. I hope you can shed some light on this, even if it is not favorable for Steem.
There we can see as percentage of all the money supply including abandoned accounts that the GINI coefficient may not be improving much. The very high attrition rate coupled with the voting reward algorithm which quadratically favors whales inhibits rapid redistribution to a normal power-law distribution of wealth.
keep watching
"For instance, 20% stake of a $100 pie is more valueable than a 10% stake of a $300 pie."
Um, I'm still on my first cup of coffee but ...
So you will post up a following blog of a one month data? This was only for an ACTIVE 24 hours data? Great job on striving to make the minnows keep swimming. :)
Just to clarify, this is from Active 24 Hours, but collected 3 times a day over 15 days. So you get a trend.
I'll post a follow-up blog next month about how the Active 24 Hours is going, yes.
But also, a trend of overall stats, both in terms of stake-holding and also the percentage of people in each tier.
Awesomes stats. Really intresting keep up the good work!
Thank you, @steempower
Means a lot coming from you. :) I'll keep doing my best.
thanks for the analysis! wanted to have something like this. I posted my concern to the distribution https://steemit.com/steemit/@apes/how-many-active-users-with-influence-has-steemit
Your numbers could lead to 2 assumtions
a) The whales just promoting "some" people
b) the minnows produce only nothing with value, or it is just to hard to get "lucky".
Of course, there is luck involved, but if you see the creators that whales are upvoting, a vast majority of them have very good content and work hard to put them out. They have built a name for themselves. Whereas a vast majority of minnows put out junk or copy-pasted material.
Of course, there are also many minnows who produce excellent content which are getting lost, but that's to be expected. It'll sort itself out once the platform matures.
It can't sort itself out because people are abusing tags and I read yesterday that posts can't be voted upon after a month. Because of this, I decided to quit blogging until I have a following from posting comments. It kills me to post up great info only to have it buried under crap and forgotten. I'm here to share ideas that create true freedom and build tribe and if it's going to take a whale noticing before anyone interacts, I'm wasting my time. Hopefully my comments open some eyes in the meantime.
Your charts are the way they are because of the nature of the system. Anyone that's read the whitepaper and has any critical thinking skills won't need the chart you made because redistribution is common sense. If the whales/stars weren't redistributing some portion of their "wealth", the site would very quickly die. I have a feeling that lots of redistribution is to multiple accounts that the whales hold. If you have 50 accounts and distribute power amongst them, you can power down much quicker. If I cared more, I'd dig into the blockchain and prove it.
With the drastic disproportion of whales and minnows though, there's no way they can go through enough posts to distribute that wealth based upon merit, and as far as I'm concerned, they're upvoting mainly garbage. I rarely find anything interesting in trending but see lots of awesome posts in new that get buried and forgotten.
There are a few huge flaws in this model that if not corrected, will probably kill this idea eventually. Bots need to go. Multiple accounts per user need to go. All accounts need to be verified humans. Posts should be able to be voted upon indefinitely. Tag abuse needs to be stopped. A better search engine needs to be put in place. The follow feature would be awesome. I could keep going but my typing finger is getting tired...
I can understand why you're frustrated. But the model is working. Sure, there are many issues, but don't forget, we are still in Beta.
If you really think there are major showstopping issues, do dig into it and prove it with evidence. I'm sure people will take notice and it will be beneficial for the community.
The model is working for a very few lucky people. The rest are being disappointed pretty quickly or are too dumb to know what's going on. As far as digging through transactions goes, there are others out there with more to lose and better internet connections so I'll let them do the research part of things. I already feel like I'm wasting the time that I spend here.
The problems I listed above in the last paragraph are blatantly obvious to anyone participating and are enough to kill 99% of the hope I had for this platform and many others have said they feel the same. I've voiced these concerns in quite a few comments but no one with the power to do anything about it seems to care.
Also, the lack of curation here is frustrating. If someone takes the time to type out a few hundred words expressing ideas that could improve the site, they usually deserve an upvote for their effort. Everything I post is in the best interest of steemit and the world in general and nine out of ten of my posts and comments are completely ignored. It's sad.
Veri nace post!
Great info. Would love to see it another 2 weeks and compare. As for new users, what was the line "Build it and they will come" :)
great analysis and usefull charts 8]
I like the data analysis. Thanks for sharing!
Thank you for that post 😃 It's opened my eyes ! Keep it up
There is still not my time for me to become a 1M vest, but I'm costantly working hard for the goal.
You'll get there, keep at it. :)
Thanks for the content and time making this possible. keep it up
Well, in fact this trend was predicted here https://steemit.com/steem/@wingz/steemit-has-all-of-a-sudden-become-a-lot-more-democratic-a-lot-fairer-and-it-s-all-because-of-the-payout#@svamiva/re-wingz-steemit-has-all-of-a-sudden-become-a-lot-more-democratic-a-lot-fairer-and-it-s-all-because-of-the-payout-20160728t092157551z
I was wondering how it goes on
The payout was of course a big deal and of course very directly redistributive. It was a one time thing. This discussion started up later through, about a long term trend.
Well, is it a long term trend or not we can't know jet. But, indeed, people pay to much attention to Steem price charts, while namely power distribution charts would be more important to understand what is going on. I would be great if you would make updates from time to time.
Another thing is that on the surface level we can't see if "dolfins " x,y and z are not just sub-brunches of "whale" N .
Steemit is democratic. Those who don't agree are mad they earned nothing
I agree with the author. I have authored a similar article on democratic values that Steemit is based on. Steemit is as I call Electronic Social Economy. https://steemit.com/steemit/@chhabiz/why-whales-and-dolphins-will-not-sell-off-and-why-you-should-not-too
Nice article! I'm not quite as optimistic - let's see how it turns out. I like the term "social economy". :)
СOOl смотрите мой блог!)
Thanks, good post !!!
I also think we should value each other. I do hope there is an equalizing between all users and believe people should be respectful of one another. Thanks for this post and the stats!
Nice investigation thanks for share
Amazing article and further inspiration into investing both time and money in STEEMIT.COM Thanks @liberosist
full $teem Ahead!
@streetstyle
Nice post!
👍👏
The Steemit Dream = to own more Steem Power
And replace Reddit. ;)
Finally! I was so worried about this topic and im glad to see the scales tipping back in the minnows favor.
The distribution is still too problematic! I wrote an article to make it all much more fair: Attention SteemIt developers: these algorithm changes would improve the platform drastically!
I don't think such drastic measures need to be taken when the stake-weighted system is proving itself just fine. If things start getting out of hand, we can start discussing radical redistribution.
Another great analysis.
Interesting post, making sense of a confusing topic! Thank you