Topic: Steem pyramid scheme revealed - page 76. (Read 107064 times)

True, but a story frequently told is that attempts to spread previous cryptos even that one degree also failed, but with Steemit they are succeeding. The real question will be whether it can spread more than one degree or is getting uptake outside of crypto altogether, and I do think there is at least some of the latter (former is entirely unknown, at least to me). Though even just a high acceptance rate at one degree still beats previous crypto by some factor. Overall we don't know yet. The site has really only been live (meaning payouts, and the explosive user growth) for three weeks.

Bitcoiners have all ages and demographics one degree away from them.

Of course some are that, but not all. Many ages and backgrounds are represented. The apparent demographics are just much wider than Bitcoiners.

Once it gets large enough that real studies can be done I'm sure we'll see better numbers. Or we'll see that growth plateaus once people one-degree away from Bitcoin are tapped out. That won't take long.


At this point the weakest part of the site is that there is no working following feature, so I have no idea how anyone is doing even if I found their initial posts interesting. The whole thing is one big firehose, I just puck out posts more or less at random to see a sample. I have also hired a staff of 10 people to find posts for me to read according to my instructions, but obviously no one expects the typical user to do that.

That will improve; organizational features are in development, but the developers are very overworked.

But you don't know if their bfs are blocknerds who have been mentioning Bitcoin for years.

I saw many blogs explaining that females were coaxed into it by their Bitcoin bfs. It is like they get to make their bfs happy and make themselves some cash at same time. But what about the ladies who signed up and only earned 3 pennies. Do we hear from them?

You've probably read more blogs than I have. I remember some girl from Hong Kong and another from China. How is she doing?

Of course it "matters" generally, no one would deny that. But compared to "darkcoin brought new people into the cryptosphere"? That's a bad joke.


Hard evidence no in terms of validated demographics? No, especially since it is hard to tell whether new users are Bitcoin users are not without them mentioning it, but it is pretty apparent to me that many of the new users are not Bitcoin users. Answering their questions about how to get their payments out (they have often never heard of Bittrex, Poloniex, Coinbase, etc.) makes that pretty clear for example.


I don't, but the claim was made and I replied to it, pointing out how absurd it was. Unless these claims are refuted, less informed and less experienced readers may think they are valid.


I've not seen any such forecast, but it is clear that it is still growing rapidly. Literally every day the alexa rank drops.

http://www.alexa.com/siteinfo/steemit.com (this link doesn't work for me, type in "steemit.com" when you get there)

The attrition rate matters w.r.t. to the bolded text I wrote, as to whether they can cross the chasm from the blocknerds very motivated types, to the masses.


Why would you find relevant a comparison of a silly anonymous coin to a blogging site that pays out crypto-currency. Of course the latter is going to have more participation. That is a no brainer.

The issue that matters is if Steem can not just suck in (the 100,000 to 1 million) Bitcoin nerds and their gfs, but new people from outside of Bitcoin. Do we see evidence of that?

If usership is 7500, then Steem hasn't even gotten 10% of the Bitcoin community to be active yet. Of course it is early yet and usership might be growing fast. Has anyone projected how long until they reach all Bitcoin's usership?

I don't know the number, but regardless of attrition rate it there are still orders of magnitude more people actively using it than were brought into the cryptosphere by darkcoin. Come on, it isn't even close. Just look at the volume of substantive comments being posted which is sort of a Proof of Actual (non-attritted) User. Unless you think Ned has hired an army of sock puppets in the Philippines to pretend to be users. That is possible, of course, but I just don't believe it.

That doesn't mean a competitor to Steem couldn't do even better.


Not entirely from scratch. The Graphine code base is fully open source (MIT license) so you could start with that.

I think the structure can be improved so that:

• The debasement of investors is much lower and decreases over time, and funding from debasement is gradually replaced by funding from transaction fees. This would be explicit in the protocol.
• Bloggers make a more long-term commitment to the site, and in return the site helps them build a long-term community, and the investors are supporting them long-term.
• Fixing the voting and ranking system so can diversify into more markets, such as reviews, music distribution, etc..
• Signups would not include a free award of tokens, and instead an initial quantity would need to be earned via proof-of-work (which would be done automatically for the user, no technical expertise required). This removes the need for the 80% "pre"-mine. Note this precipitates a need for CPU friendly PoW algorithm.
• A superior, scalable microtransaction blockchain design which is my improvement on Satoshi's PoW blockchain (i.e. not proof-of-stake), so as to give a valid use case for transactions that can't be done (nor scaled) with credit cards nor Bitcoin. Note although Graphene (Steem's blockchain) claims 3 seconds per block confirmation speed, this may not be fast enough for real-time gamification transactions (who wants to pause for more than 3 probably 5+ seconds every time they need to access some resource). I also have my doubts about whether DPoS is scalable without being centralized. Also I have my doubts about the reliability of DPoS when pushing for faster transactions, because it depends on only one delegate validator per block (perhaps this could be improved but game theory issues will arise unless it is essentially a centralized, corporate run blockchain and in which case you don't need a blockchain, just run a corporate database?).
  
  Note proof-of-stake would be retained for some aspects such as voting power and rate-limiting.

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That image is revolting. I can't upvote that. Sorry.

If I see that image and don't cringe and want to hide it, then my only other possible reaction is someone did that to me I would become enraged and rip them to pieces biting their face, gouging their eyes, etc.. This is war. I don't want to see that. That would bring out the most fundamental nature of a man (versus a woman). We indeed can become extremely violent when threatened.

What is Steem's attrition rate on new signups? Since no one is compiling this data accurately, we don't know if Steem is failing or not.

Also we run the danger with Steem of wasting the concept. We may only get one chance to get people to try something based on this concept, and if it a failure in the eyes of most of the users, then they may not try another which tries to improve the same concept.

This is why I am thinking we need to launch a competitor to Steem immediately. Cutting corners as necessary to get it launched pronto.

Steem has a problem apparently paying most blog posts nearly nothing (pennies) and overpaying $1000s (even $50,000) for some blog posts (becoming irrational herding mentality). The ability of users to find content related to their own interests is probably not good. You basically have to read all this same redundant crap about Steemit or about the travails of people such as their travels or how they were poor and Steem made them rich, etc.. Afaics, the development of social networking sub-communities within Steem is very poor thus far.

Imagine you actually discovered Steemit on Facebook and know nothing about Bitcoin (never even heard of it). Now what do you see at Steemit? You see some confusing shit you don't understand (STEEM, STEEM POWER, STEEM DOLLARS, transfers, power up, power down, Buy and Sell, etc), a blog post box that says to use Markdown (WTF is markdown!), and a site full of top-ranked crap you aren't interested in (unless you just want to emulate to earn money in which case the site is a monkey-see-monkey-do groupthink). Note I suspect most users are finding Steem as of now from other people who know about blockchain technology, so they have someone helping them to learn. But if you expect Steem to open new markets from hearing about, then that wouldn't be the case.

On the positive side, the outlandishness of Steem is likely generating publicity. And especially at this nascent stage, it is causing many people to change their perspective on blockchain technology. But we run the danger of burnout/flameout for the reasons I stated.

Also if investors are not motivated to buy in long-term, then the price will decline which may cause bloggers to start to power down, which would cause the price to spiral the toilet bowl because 67% of the market capitalization would come up for sale yearly (and again without investors coming in as buying demand).

A competitor launched which is more attractive to investors, could possibly suck the price of Steem down by displacing buying demand. (Or it might just generate more investment in the sector)

If those free 10 SP signup accounts are mostly abandoned because only the best bloggers get paid (and paid far too much), then that 40% is erased from the money supply because it can't be powered down (minimum 100 SP to begin powering down). Thus the insider concentration would remain the same or increase.


I mentioned that:

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Without investors buying STEEM, the price will decline.

Btw, I think I have figured out a better way to structure it than Steem did, which retains the concept but is mathematically much more enticing for the outside investors.

I am strongly leaning towards rewriting a competitor for Steem (no forking is allowed so I'd have to start from scratch), except that I haven't analyzed in detail yet how much work is required and whether it is realistic for me to attempt to do it. Also I am still evaluating my health, which has improved significantly but still I am getting terribly exhausted if I go hard for too many days (that is why my last blog post on Steem was not entirely well thought out mathematically). I just woke up from an 11 hour sleep. Some signs of my (apparently gradually ongoing) improving health are for example that I was able to run hard for 5 consecutive days. But many strange things such as I had to supplement with calcium because my teeth were aching, I've still got a rash all over my back, and my abdomen still aches when I workout. Something is still not 100% correct inside, perhaps a tumor or some residual chronic infection (fungal, viral, and/or bacterial) or gut dysbiosis (e.g. IBS, Chron's, etc); but I am becoming stronger so it might be curing slowly. My treatment remains hard exercise daily, extremely high doses of sublingual oregano oil, extremely high doses of curcumin+piperene mixed in coconut milk, 1 to 2g calcium supplements daily, 5,000 to 10,000 IU VitD3 daily, lots of uncooked vegetables and salad, moderate grains mostly oatmeal, lots of eggs and fish soup, also some other meats in moderation.

I'd prefer in an ideal world to call Ned and see if something could be worked out, but if the fundamental math structure is unsalvageable, I doubt very much they are going to be willing to change so many fundamental aspects. But I am still analyzing. It might be possible convince them. Note it might be easier to convince them by actually launching a competitor. Competition tends to force the first movers to do what is necessary to compete.

I am still analyzing, and only good can come from my effort.


Why?

• Writing user interface code is my area of strong experience, and something I enjoy doing. I like to compete in this area.
• The Steem concept dovetails perhaps perfect fit with the work I was doing to develop an overhaul to Satoshi's PoW blockchain
• I need a job. I've focused the past 3 years of my life on blockchain research.  I am too old and in the wrong venue and life situation to go reestablish myself in the mainstream s/w industry. I'm 15-20 years removed from that career, and besides I never was able to work as employee for more than several months in my entire life. It's difficult to change this old donkey.
• Steem has invented an important concept which could popularize blockchains and CC, but thus far my analysis is they will fail because they made some unsalvageable mistakes in the design (note however I am cautious about conclusions as I've made some errors in my analysis recently so I need time to think all of it carefully and especially when I am well rested).
• Perhaps many in the Bitcoin arena, want a more fairly launched version of Steemit. Although I don't know how seriously they would support a competitor to Steem, I don't care. I need something interesting to work on and I can take the long-term perspective of building it out over time.

Obviously I won't even waste my time starting to code a competitor if I can see a way they can morph Steem to solve any design or launch flaws.

How many?

Compare with Steem.

If the ratio is less than 100:1 I'd be surprised, and will likely very rapidly expand to 1000:1 or 10000:1 if not higher.

The launch of Steem is nothing like the launch of Darkcoin anyway. They told everyone exactly what they were doing, even on the original thread, and the plan to mine 80%, give away 40% and sell 20% to fund development was and is on their web site (steem.io). Darkcoin's launch was and is an opaque "accident".

I was following the original thread and I mined both before and after the relaunch. If I had wanted to I could have easily put thousands of miners on it and competed with them. I didn't because I recognized they had a coherent plan for what they were doing and if I undermined their plan they would abandon the project or more likely relaunch it another way, leaving me with worthless coins.

Because the main entrance has nothing to do with buying cryptocurrencies. It's about signing up in a social platform, posting stuff and getting money.

Since this money is in the form of cryptocurrency, it "forces" users to acquaint themselves with exchanges, bitcoins, etc.

I think you have to differentiate between the 'steemit' account which is (more or less) transparently managed in a particular way and the rest of the (known and unknown) "pre"-miners who mined the other 20% (some of whom are probably insiders, taking that term broadly, some of who certainly are not).

I think it is unlikely with 40% of the "pre"-mine coins being given away with even some degree of distribution (for example, Steemit becomes very popular and millions of people sign up, so even if some do scam multiple "free" accounts the bulk of accounts are not duplicated), that insider concentration won't be heavily diluted.

The conclusion may be the same, but the analysis is different.

Also, the 100% yearly number is once the long term distribution rates are reached. The percentages are higher during the initial distribution (with a constant rate of distribution per block, the second block doubles the supply, etc.)


Seems right.

Let's try this again.

The analysis of this bizarre design is somewhat complex. (The following is for the eventual case when current very high rate of minting of STEEM will reduce as a percentage of the money supply)

https://steem.io/SteemWhitePaper.pdf#page=35

• 100% of the money supply is minted yearly, but this is not all debasement.
• 10% of the money supply minted yearly paid out to various parties (77.5% of the 10% paid to blogging and curation rewards, which is 7.75% of the money supply).
• 90% (9X the prior item) of the money supply minted yearly paid proportionally to STEEM POWER (SP) holders (which is equivalent to a forward stock split, if SP supply is exactly 9 × STEEM supply, else +/- variable interest rate).
• STEEM holders are debased 50% (100% dilution) yearly, because 100% new supply created yearly and nothing is paid to STEEM holders.
• If STEEM holders don't power up (and SP holders aren't powering down), SP holders are debased approximately (100% × (1 ÷ 9)) + (7.75% ÷ 2) =  15% 0% yearly (because half of the 7.75% is paid as SP, which increases the ratio of SP to STEEM to greater than 9[1].).
• If all STEEM holders power up immediately (and SP holders aren't powering down), SP holders are debased approximately (100% × (1 ÷ 9)) + 10% =  21%  6.7% yearly.
• If STEEM holders don't power up and all SP holders are powering down, approximately 90% + (7.75% ÷ 2) - 50% = 43.875% of the money supply is held as SP.
• If STEEM holders don't power up (and SP holders aren't powering down), approximately 90% + (7.75% ÷ 2) = 93.875% of the money supply is held as SP.

Note the posited debasement rates for STEEM POWER holders in this post is incorrect and the corrected calculations are much lower.

The fairly low debasement rate of SP, means the "pre"-mine insiders will control the money supply for years to come.

It appears to me (in the bullish scenario) the economics incentives encourage most all STEEM to be powered up with some % of the SP being powered down over 104 weekly disbursements and (some % of the 10% STEEM created yearly) immediately being sold at an exchange then powered back up again. So the liquidity will range up to 67% of the money supply yearly, but it can be in the low single digit percentages while the users (investors) are ramping up their SP holdings before initiating the powering downs.

[1]	When the ratio is above 9, the 9 SP created for every 1 STEEM, is a negative interest rate (instead of a forward stock split) which debases the SP by the difference of ratio minus 9 (normalized to 100% yearly minting).

Note that when and while the curation rewards are disabled, then the numbers change as follows (and again assuming the eventual case):

• 92.5% of the money supply is minted yearly, but this is not all debasement.
• 9.25% of the money supply minted yearly paid out to various parties (83.8% of the 9.25% paid to blogging and curation rewards, which is 7.75% of the money supply).
• 83.25% (9X the prior item) of the money supply minted yearly paid proportionally to STEEM POWER (SP) holders (which is equivalent to a forward stock split, if SP supply is exactly 9 × STEEM supply, else +/- variable interest rate).
• STEEM holders are debased 46.125% (92.5% dilution) yearly, because 92.5% new supply created yearly and nothing is paid to STEEM holders.
• If STEEM holders don't power up (and SP holders aren't powering down), SP holders are debased approximately (100% × (1 ÷ 9)) + (7.75% ÷ 2 ÷ 0.925) =  15.3% yearly.
• If all STEEM holders power up immediately (and SP holders aren't powering down), SP holders are debased approximately (100% × (1 ÷ 9)) + (9.25 ÷ 0.925)% =  21% yearly.
• If STEEM holders don't power up and all SP holders are powering down, approximately 90% + (7.75% ÷ 2 ÷ 0.925) - 50% = 44.175% of the money supply is held as SP.
• If STEEM holders don't power up (and SP holders aren't powering down), approximately 90% + (7.75% ÷ 2 ÷ 0.925) = 94.175% of the money supply is held as SP.

Edit: Note the exponential quality of this design (excluding the 7% compounding scenario enumerated above) is the 92.5 - 100% yearly minting of new money supply. And apparently also a pressure for the price to increase at the start as most are powering up. Thus the market capitalization could become a $10 - 100s of billion bubble before the powering down kicks in and the bubble pops. This would pay for $billion of blogging rewards yearly!

So the 90% compounding scenario I outlined originally is actually still the case in the bullish scenario!

And unless they are able to create a sustained transaction (aka transfers) use case demand for the STEEM token, eventually the bubble will crash as the SP powers down en masse. If they can created a sustained transaction use case demand, then it will peak and fall but find an equilibrium.

One potential flaw I see if that (in the non-bullish scenario) long-term investors may be hesitant to invest because they must power up, but they may not feel confident they can power down with perfect timing. And holding STEEM is debased at 46.125 or 50% yearly. Lack of demand to purchase STEEM could cause the price to be on a downtrend, thus denying the creation of a bubble and the growth in funding for blogging rewards. A declining price might encourage powering down and not powering up, thus reversing my assumption above about the economic incentives.

I am thinking this design has basically eliminated the medium-term speculation case. Investors must choose between holding STEEM for weeks only, or SP for 2 years (1 year weighted average of cashing out price).

Rapid increase of STEEM transactions (aka transfers, not Steem activity) would probably give long-term investors more confidence.

darkcoin brought new people into the cryptosphere but that launch seems to matter a lot... why is this different somehow? oh thats right, cause all your buddies are already in on it so this con is ok.

nothing to see here people, just another day in crypto

AFAIK linking content of those you trust should alleviate needless spam--the ability to leave pertinent data at your virtual doorstep is key. 

Very true, without a decent search engine STEEM users will drown in bad content, then leave.

The flaw in this model is that although the STEEM POWER investors are protected from most of the debasement individually due 9/10th of it being a forward stock split, the price must decline due to 100% per annum increase in the money supply. Thus there is no incentive to hold STEEM for speculation. Thus most STEEM will end up powered up, thus most of the cost of funding the blogging will come from STEEM POWER investors.

However, the price might not decline because the supply of STEEM for purchase may become so limited. Locking up most of the money supply gives the impression that the money supply has increased but actually it is at worst 103/104th illiquid on any given week and at best only 50% liquid per year. So in that respect the model is clever.

Content is gibberish without a community to refine and expand on its meaning.  I don't know if anyone profits unless there is proven value in the network--I hope not; that's the way it's supposed to work.