Topic: Steem pyramid scheme revealed - page 10. (Read 107034 times)

I havent read your entire post but you started criticizing linear rewards, and I really don't get it.

You said there that money will be funneled from altruists to selfish posters. I think that is blatantly wrong.

First of all there is no "self voting" I dont even know what that means. When you write a post you upvote your post with your power.So whether you send your SP to a sockpuppet account or vote on yourself with the same account is technically the same isn't it?

One thing I could imagine is that a person empties his entire VP on himself, but remember voting is a social thing. If nobody votes after him then he barely makes money. So yeah a person can vote on himself but the way I experienced it's more profitable to vote on others instead.

Secondly there is erosion, whales powering down, more investors buying in, and eventually you will have tens of thousands or millions of minnows joining together in some sort of delegation pool (like you see with miners now) who will have enough power to equalize themselves.

Sort of like how in a democracy poor workers form trade unions to put up a fight against the "evil capitalists". Of course whether this setup gets corrupted or not in the future, that is a different topic.


It is already like that, it's just that the government doesnt have enough power to enforce it, but when they will, they will unleash it unfortunately.

There was a pretty good inverview on some libertarian channel about this, where a guy asked a TSA officer why are they screening people only when leaving and why not also when coming, and the guy replied that basically he didn't had enough manpower, otherwise he would have done it.

So that is how government works, the default is tyranny. It's just that they don't have enough manpower or opportunity to implement it entirely.


They can just change their minds in a week, and that's about it.

I can't believe people still hope that these bureaucrats will do anything good for the average person.


I don't personally think it will ever go that far , and I really hope that it won't, but there will be some crackdowns in the future in favor of banks probably crushing small competing businesses.


No, I didn't imply that people should break laws, I said that people should change the laws, but before that, they need to realize what is going on. People have to realize how the political game works.


Who said anything about "primitivism", I never advocated nor spoke in favor of any kind of barbaric/primivisim kind of society that some anarcho-primitivists are advocating for.

I don't think you understand well libertarian principles and you certainly conflate multiple, competing, libertarian ideologies.

If I'd define myself simply I'd say that I am a voluntary capitalist or voluntary libertarian or whatever other synonymous labels you can find. I do like the free market. And that implies civilization of course.



I know, I even wrote a couple of posts about this. I would also like to have a voluntary world, which is only achieve through voluntary means, be that cooperation or friendly competition.


That is a very narrowminded way of looking at it, and even if you are right, it doesnt prove anythin, for now it works and that is all that matters.

Read the recent past few pages of discussion. Follow all the links.


Incorrect. Whales can vote to award most of the rewards to themselves. And as I explained last year, it is impossible to design a voting rewards from the collective money supply system that wouldn't aggregate the rewards to the whales.

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That is as ridiculously disingenuous as arguing any economic activity could be considered unlicensed business. If we reach that level of totalitarianism, then we will be in a different even more insane world than we are in now.

FinCEN for example has clearly stated that mining is not in violation of their regulatory jurisdiction.

If you continue to make disingenuous arguments, then it's pointless for me to continue the discussion with you.


If that ever is the case, cryptocurrency is dead and we are in a totalitarian world where running a router on the Internet could be considered aiding moneylaunders.

You're trying to justify Steem breaking securities law by arguing the civilization is always totalitarianism, thus implying we must always break all laws and destroy civilization.

You can't possibly build anything without civilization. If you indeed get the lawless world you claim you want, Steem will be destroyed along with everything else.


I also want to change the world towards greater cooperation with new technology, but revolution is not a solution. Every revolution ends up as power vacuum where a dictator or worse steps in. The youth are always in favor of destroying everything but they do not realize the true cost of this:

https://www.armstrongeconomics.com/world-news/civil-unrest/the-rising-youth-civil-unrest/
https://www.armstrongeconomics.com/international-news/politics/the-right-to-vote-should-attach-to-only-those-who-pay-taxes/

Whereas, the older and wiser (such as myself at age 52) understand we need an evolutionary strategy.

So if you want to help the world reach greater cooperation, don't expect to accomplish it by launching a token system in a scammy way with a sneaky instamine so that the whales control the thing and then think this is any better than the system you think you are fighting.

You're just fooling yourself like a dog chasing his tail and not knowing it.

Try to make something own, witnout any mistakes, or reveal all proofs and facts.

Of course it does, mining could be considered unlicensed business.

Running a full node could be considered aiding moneylaunderers, etc..

You do realize that the law is so complex and insane that they can essentially nitpick any single point and ban the whole thing.

It's up to people to resist this. People have to realize that the law is not a fixed thing. The opinion of judges and prosecutors vary depending on the political envionment. Parliament members then have to react to this and rework the laws.

I have explained very well in an older post of mine, that if you really think about it, everything is illegal. It's just that the State doesn't have a cop for everyone to put in jail everyone, otherwise everyone would be in jail already:

https://steemit.com/law/@profitgenerator/if-everything-were-illegal

Of course you can't put everyone in jail, since it's logistically impossible, thus you end up with concentration camps. This is the endgame of tyranny. People didn't resisted Hitler and we know what happened then unfortunately.


It's all bullshit, and it totally depends on what people put up with or not. And it's pretty hard to put down a decentralized community.

Thus this time the law will reflect the opinions of the public, and not the other way around. You can already see this how politicians everywhere are "legalizing" cryptocurrency. They just can't put up with it.




If there is no victim , there is no crime. Who exactly is the victim here?


So you really think that whales will not submit to public pressure?

I mean if a big youtuber comes with a 500,000 audience over to Steemit, don't you think that is a lot of social capital to put pressure on whales with?

Ostracism and public shaming is the only way to keep order in a free and voluntary society. So if you have free speech, you can fight back against uneqal opponents if either you have big influence or band together with others.



Ok I am not goin to argue with you laws, since I am not familiar with them.

But I do believe the BRICS and the ASEAN countries have their own agenda.

It looks to me like a giant capital control system. China banned CNY trading since they have horrible capital controls already in place. They all look for their own interests.


But there is erosion of power since Steem is mostly inflationary and % power is directly funneled from early holders to authors or new investors.

Most early holders with big balances don't post since they are afraid that their account will get hacked so they probably dont login often. I havent saw many big whales posting, but only curating.

Thus money over time is directly funneled from early holders to authors. Then you also have new investors who buy Steem, and due to the pressure, you have the whales selling Steem.

So I doubt an oligarchy will form in Steem. It's too dynamic, and there is no Government to impose a monopoly. Usually most oligarchies form due to Govt regulations.

Bold statements should be backed up by some proof.  Care to explain?  Steem, while it may not be perfect etc... is attempting to attract people with no crypto knowledge.  This goes beyond simply sending a token from a to b that the general public could care less about.  Don't be part of the problem on this forum and yell scam, think bigger and try to theorize ways to improve honest projects. 

Sincere Proof-of-work distribution does not present this problem. I explained why in my posts.

These scammy ICOs and obfuscations of ICOs are in much greater legal jeopardy.


Two wrongs don’t make it right. Those who must do scammy and illegal things, will not successfully reform the government.

How can a technology lead when it is inherently just the same politics and power struggle crap it is trying to replace.


Because the voting revenue model sucks and is dominated by whales. And because the audience is tiny. The hen-egg problem is a serious problem.

The app revenue and onboarding model is one the main facets where my project to replace Steem, will excel over Steem.


Incorrect.


We already have Russia, China, Singapore, Hong Kong, South Korea, Canada, UK, and USA warning about further enforcement coming against ICOs. They all caved in for FATCA as well.


A minority of votes in the ecosystem can always be out voted by a 51% oligarchy on every DPoS delegate’s election.

A plurality of minority voting blocs is disintegration from any coherent plans and developments. Normally this is what we want for decentralized ledger, but not when minority blocs can downvote each other into oblivion.

Democracy and politics is what we need for decentralization to supercede so that we can attain greater cooperation in society. See the following Steem conversion on that:

https://steemit.com/freedom/@anonymint/re-anonymint-re-anonymint-re-anonymint-re-anonymint-re-anonymint-marissa-mayer-is-the-poster-child-for-bitches-in-tech-20170906t062435963z

Is it better to sell out Steem? I am not interested in this story and I believe there are worse things that we can't see yet in crypto. May LBRY Credits also do the same pyramid scheme?

All cryptocurrencies are technically illegal or in gray area because in most countries the legal tender has monopoly. And you have KYC/AML regulations that crypto's don't respect.

But so what all crypto users take this responsibility. Any early technology has legal risks.


It's that law that is wrong, the law has to change. But by now governments have became so big and monstrous that it is time for people to push back against it.

So reforming the legal system is a priority, people are getting tired of bank bail-ins, social security ponzi schemes and stagnating wages, while the supposed boogeyman are some punks who might not respect KYC regulations properly.

Tell me which one is a bigger problem for society?


Big youtubers could join any time now. They are getting hammered on Youtube revenues.

Steemit is a complimentary revenue for any blogger. Why not use it?


I believe they don;t accept US citizens in the ICO sale. Most regulatory problems come from the US.

The rest of the world is more relaxed.


Not with the delegation system. Many newbies could band together to mount a collective defense against an out of control whale.

It makes things more equal.

Continue affiliating with and selling Steem (and especially EOS) then perhaps end up in big trouble with the law later.

In addition to the legal issues already raised, these Steemians want to pile on more legal woes:


Steem would then be enabling activity which is illegal or regulated in many jurisdictions including the USA.

And the problem is that Steem is not a decentralized token system. It is owned and controlled by whales. It was launched as investment security as has been explained.


Severe legal problems might be coming eventually (maybe not too soon though) to those whales who were involved in Steem.

I’m perplexed about @smooth’s continued involvement in Steem, if at all. I ponder maybe he thinks he is exempt because he mined his tokens as an outsider and he has continuously cautioned about Steem (and he may have unselfishly reinvested all/most/some of his STEEM proceeds into the Steem ecosystem), but I really wouldn’t want to be in his predicament. I genuinely hope his anonymity is iron-clad or that he has received expert legal counsel, because afaics @smooth has most often tried to be objective and avoid disingenuous activities in our ecosystem so it would be with some remorse by many here if he were to suffer.

Granted most of us didn’t understand the full implications of the law before. But now it is being explained clearly to us and with numerous warnings by authorities. It behoves us to clean up our investing activity.

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So then you agree with me when I noted that your claim about 300,000 users was not a comparable metric. Dividing by 1000 as you proposed, gives us only 300.

My ”eyeballing it” guess is the actual economic population of Steem is some where in the range of a couple 1000 at best. Which is irrelevant unless it is growing fast and making some fundamental paradigmatic shift of great significance.


DPoS is not antifragile neither technologically (at Internet scale) nor in terms of political economics. When you have 300 million users then we can talk about whether the blockchain is adequate. And I assure that DPoS will fail way before you reach even 30 million users due to the fact that is an inherently centralized technology. For the analogous reason that Visa can not scale to nanotransactions for every individual on the planet.

Dan makes investment schemes, but not paradigmatic solutions which have a long-tail future. However, I will grant that Dan has contributed, especially with his TaPoS concept, which will end up being very important.

And he is very likely in massive trouble with the law in the future, especially with EOS.


This is just the beginning of the natural power vacuum of centralized paradigms.

Watch it either disintegrate or taken over by an oligarchy.


Actually I like blogging on Steem more than Medium, because I am so tired of being censored (and yes I had comments deleted on Medium). But the downvoting on Steem is inane.

That being said. We do really need a way for speculators to participate in our ecosystem. But we do not need a new token for every new venture. That is the fundamental flaw in the Ethereum ICO model.

We need a different way to monetize “apps” and investing in ventures that develop apps, which side-steps token issuance.

Because there is a huge amount of money out there that wants speculate in decentralized ledger technology. The first project that shows the way forward from ICOs, will likely see a huge success.

Gambling in crypto is like a huge vacuum cleaner that sucks in value into that currency.

The house always wins, and gambling websites have little costs compared to how much money they hold and bring in.

The only real expense for a gambling site is if it gets hacked or if it's an inside job and the owner disappears with the funds.

But if this doesn't happen, and it shouldn't as people demand now more transparency. Then a gambling environment for Steem would mean that the value that is brough in would offset the inflation rate.

So Steem would become from an inflationary to a deflationary currency.

Okay so there are 2 strategies:
* You get few rich people to sign up
* You get many poor people to sign up

In the end the total sum in either cases should be equal.

If you get 1 westerner with 10,000$ to invest in Steem, might be like getting 1000 poor Indians to invest 10$.

And it can be just as hard to find a person with 10k than to get 1000 people. So it's kind of the same from a marketing perspective.



2nd layer stuff is just now coming out. Ethereum ICO's are only the beginning. Wait until BTC smart contract systems come out, that will be the real deal. 70-80 billion $ eager for some big profits.

Either way it looks like the smart contract stuff is the future of private equities.


There is some conflict now between the whales and it might be bad for Steem that such high profile people are in a fight right now. But we will see what will happen.


The way I understood it is that he finished his mission at Steem anyway. He made the root of the blockchain for Steem. And he said in a recent interview that Steem is pretty much ready now, it only needs GUI design from now on for Steemit. The blockchain is mature enough. And he actually wanted to create a scaleable multifunctional blockchain which he could only do via an ETH ICO, thus he made EOS. I think the ETH ICO is only for fundraising the EOS blockchain will be kind of independent the way I understood it.

Nontheless it's an interesting project and I don't blame him for leaving, he already did a lot to help Steem. And Steem might need more engineering in the future, but if Dan wants to work on a "bigger project", it's his choice.

I haven't invested in EOS yet just to make that clear, but I might later once the situation gets more clear.

Presumably the reason is because there is nothing significant those games do which people really salivate for, which can’t already be attained on games in the mainstream.

Steemit does something unique. It pays people for blogging. Afaik, that is the only app of significance so far for Steem.

I’m guessing that perhaps some Steem devs drank the “we are change” Koolaid and are thinking people will use decentralized replacements for mainstream apps/sites, just because of the altruism factor. There must be an economic (not necessarily monetary) incentive. For example, the economic incentive for me to use Facebook for my social contacts, is because it is the most convenient for sharing/contacting, because everyone else is there. But for crypto, I don’t use FB because even if y’all are there, I can’t find you as needles in haystacks on it.

Resistance against censorship is actually an economic need that some centralized apps don’t offer. It’s not an economic need for most apps though. Each app market has to be carefully analysed.

There are already several Steem-based gambling websites (or games built on Steem/Steemit itself). How will this change with more websites? How does Steem-based gambling add value relative to other crypto gambling, especially BTC (and maybe ETH) with far more liquidity, recognition and user base

Yet I was writing about those who are joining Steem and not about s/w devs who work predominantly for Westerners.

Eventually India will be a huge market, but go to App Annie and study where the revenue on apps comes from. India is huge on downloads, but irrelevant on sales. 10 years from now, it will begin to shift significantly enough to matter.

Marketing analysis is not racism.

TIP: btw, there is need for better buy/sell websites for example in the Philippines because someone monopolized the main ones and stopped for example accepting vitamin ads (perhaps the drug importers are involved). The markup on vitamins imported from abroad is 200 - 300% of costs, because they have a monopoly. But the problem for making your Peerhub exclusively for STEEM remains that the filipinos do not have STEEM tokens and they will not buy them. I suggest you support all cryptocurrencies, work with rebit.ph/coins.ph, MyBenta, and also allow for other payment methods. Sometimes filipinos will deposit in a bank account or send cash via remittance (padala) in order to buy by mail. More often though they just meet up since most commerce of that sort is in the Manila capital city area.


Then you should know it is but a fraction of MMORPG in terms of revenue.

Another important datum is that Facebook earns on average only a measily $0.05 for the 50 minutes per day that the average N. American is on Facebook’s properties daily.

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I proposed donations only for the original core devs, not for the apps. Re-read my prior post more carefully.


At least it seems we agree that the dilemma is due to economics. So any solution must be profit (opportunity cost) based.

Tangentially, there is a huge and growing demand (in the form of excess supply of cash) which is outstripping the supply of private equity, so providing a viable alternative to ICOs is critically needed.

Apparently I didn’t convey clearly the stated point that the app ecosystem is driven by a profit model (and one better than Steem’s debasement via voting model). As for donations, I was only intending to refer to those self-selected core devs who have every incentive to see their baby conquer the world, so they will behind the scenes talk to the whales and make sure there are donations paid in public to give the illusion that they are working in a decentralized ecosystem. They may even be donating to themselves to fool the securities regulators, but who can prove that and besides the app ecosystem would presumably be highly competitive if there is significant profit to be made.

Daniel Larimer was never really ideologically focused on changing the world. His focus is much more pragmatic. Thus ETH cookie jar opportunity cost and other cookie jars before it, were irresistible. As for the rest of the developers, I don’t know them, but I presume they lack a holistically driven leadership and commitment. Ned is much too inexperienced to lead it. My cogent refutations of @profitgenerator212 may be representative of their mistakes.


Given other information you may not be privy to, I do not see the conflicts. I think it’s very well thought out and planned out. If only as an early investor, you were privy to internal documents then one could have a more informed discussion of the issues.


Yes but ecosystems can mature and outgrow the need for core developers. The key is that the decentralized ledger has to solidify and not require a consensus to attain further improvements. I mentioned that technological innovation in my prior post. Seems you’re not factoring that into your analysis, because no details about it have been provided.

Given a stable protocol, then the ecosystem of developers competes within that stable ecosystem.

Bitcoin can’t achieve it because they’re still mucking around with the block size and scaling issues, but for someone who has already solved all those issues…


Indeed. It is figuring out which are the truly disruptive which is absolutely essential.

How many people wish they had been mining on their laptop when Satoshi launched Bitcoin.

Donation models are always strugling, and it's kind of demoralizing to always beg for money.

For profit models are much smoother. Sort of like how Canonical a for profit company had taken over a Ubuntu distro compared to other linux distros that are donation based. Ubuntu has more success compared to that.

While I love Debian, I do think some of the funding system could be designed to be for profit.

This doesnt mean that you can't donate if you want, but you could introduce some other stuff that would be for profit. Just to make the funding smoother.

A cryptocurrency is a perfect combination between a nonprofit and a forprofit entity.

You design a platform that is nonprofit, public. And on top of that you build for profit services.

Steem would be like this. The blockchain is public, Steemit is private and you can build other services on Steem too.

Hey that's kind of racist. There are tons of good Indian software developers out there working in many software fields related or affecting cryptos.

In fact I did a research on gambling a while ago and it's mostly indians and chinese.

So the entire cryptocurrency gambling industry is supported by asians. They are very very important in this economy.

Once you get some kind of Steem based gambling website, you bet that will help.

I can't rule out that it is possible but it is a very difficult transition. The cultural shift from being employed by a corporation (steady job, benefits, etc.) is enormous. Many people literally won't be able to do it because they are supporting families, etc. and really do need the stability that comes from being funded by investors. If the corporation shutters they will likely go get another such job where they can be paid a steady income by investors (or customers in the case of a non-startup).

Volunteer/donation/etc. projects like Monero sometimes work because they self-select up front for people interested in working in that structure (the rest never join), and even then there is a lot of filtering as people leave. Only if arrivals exceed departures over time does the model work (as it has for Bitcoin and Monero and some other open source projects; none others really in the cryptocoin space), and it isn't guaranteed that will continue indefinitely (or as long as "necessary") either.

In a sense I think the problem you are running into here is the same sort of problem that a lot of ICO/token projects run into (Steem included) when tying themselves in knots trying to avoid being 'securities' and in the process ending up with very distorted incentives. It is important to recognize that the models that fit into 'securities' exist and have been codified by securities law precisely because those are actually very effective models to pay for investment (by which I mean actual work which produces something of longer-term value) while generating a return for the investors (those who pay for such work). Everything else is quite Rube Goldberg-ish by comparison, and most will fail. For every 10 (or 100) claims of "disruption" of anything, say 9 (or 99) are just broken models that don't work.

Experimentation is certainly fine though. No other way to find that one truly disruptive model.

I just write content and blog on that so not worry much about this problem

Why can’t it shift to a donation model (a la Monero) when the corporation exits. The key developers who were employees of the corporation, then continue to work for donations (or because they have so many tokens).

One of the key aspects is that the decentralized ledger could possibly be designed such that it can be upgraded by independent (even contending) groups without requiring a hard fork and without needing a significant consensus. IOW, the ledger would be designed so that it can run multiple “forks” simultaneously. The technological discussion of that is out-of-scope for this thread.


It may be the revenue and onboarding model that is the fundamental hindrance. If there is so much revenue to be made on building “apps”, then competition should take care of the problem, presuming the ledger itself is capable. DPoS is permissioned, centralized control, which is another problem because it has to be paid for without a free market pricing. So there is a prisoner’s dilemma amongst the whales in terms of where the profit in the system is.

Daniel Larimer was apparently incentized to exit Steem in a rush and go take raid the ETH cookie jar. Very lucrative opportunity costs compete (but IMO I doubt they’re correctly valuing the long-tail legal risk of launching ICOs).

I do not think centralized systems can scale politically-economically, without being taken over by a dictator.

Solving the decentralization problem of ledgers I believe remains the fundamental challenge. DPoS sort of solves scaling in the way Facebook or Visa solves scaling. But that is not very interesting in terms of a paradigm shit of the Internet. I claim (as probably all of us here do) that the Internet need a decentralized, permissionless protocol for decentralized ledgers, analogous to TCP/IP for decentralized networks. Proof-of-work fits except it has been modeled in research that incentives don’t achieve consensus any more when transaction fees exceed protocol block reward, and once that is fully distilled it (even for Monero it) comes out that oligarchy is the only way proof-of-work continues to function as it scales up economically (even if block size remains 1MB, increased, or adaptive). Oligarchies aren’t very interesting as that is the problem we’re trying to fix on the Internet with centralized ledgers that currently dominate.


So I am outlining some paradigm shifts above that I posit are required. And you noted your doubt is contingent on the current state of the platform. So I guess what must come next is experimentation.

I had no such intent.

I'm pretty sure we have discussed before that if the developer can really stop ongoing development (also whatever other "efforts") and have the platform succeed then it seems plausible. That's a big 'if' though.

For example, in the case of Steem, there is an enormous amount that remains to be done if the platform has any chance of attracting a much larger user base, and no one seems all that interested in doing it besides the original developer. So I think your suggestion, while quite possibly legal, would likely fail in the market for practical reasons in this particular case (given the current state of the platform, etc.). I guess maybe one could imagine that the original developers step away in 10-20 years (or more) and then investors get their return? Seems a bit of a stretch, but possible. It's even slower liquidity than VC.