Topic: Steemit how can this thing be workable long term? - page 4. (Read 32368 times)

Quote from: iamnotback on July 24, 2016, 05:26:05 PM

Could someone give me some explanation as to why anyone would convert BTC to STEEM POWER? (not STEEM which is debased 92.5% to 100% yearly)

arhag's (currently #1 ranked) post summarizes some of the thinking, and also I'd suggest my comment there for a bit of elaboration. In essence Steem Power is a prepaid subscription to network access. By stocking up on Steem Power now you are speculating that access to the network will be worth more to more people in the future, who will then be clamoring to buy tiny slices of your Steem Power to get in or to maintain their access. Obviously, that is a very risky bet (all cryptos are, including Bitcoin).

https://steemit.com/steem/@arhag/where-does-the-money-come-from-a-look-into-the-economics-of-steem

You are basically going long for 2 years... in a crypto currency.

Seems extremely stupid to me.

Average of one year, assuming you start liquidating right away, but still, I agree, it is a very risky bet.

Price weighted average, but you wouldn't be able to decide when to sell. You'd be pre-deciding to sell early (or late).

You can sell your account too, probably at a reduced rate (though it would depend on your standing in the community).

@smooth, how long do curator's get payment on posts? Just want to know if that figures into the analysis.

I'd love to see a market for selling accounts develop. But since you can't transfer SP, then it means you really can't sell them in a secure way. So no such liquid market will develop. You basically have to trust someone to let them have your account and change the password. Someone has to go first and take all the risk. I suppose you could do it with trusted escrow.

Curation income is not worth anyone's time at only 3.875% of their holdings per year.

Edit: Thinking more about this. The price paid to cash out early will be a function of the volatility. We know this from the pricing of futures markets. The higher the volatility, the lower the price the seller will receive. Also there will need to be some time-weighted factor of blackswan computed by the buyer. The seller will pay in advance for 1 year of risk in terms of lower selling price.

bones261

legendary

Activity: 1806

Merit: 1828

From my understanding, when you start powering down, you still have Vests, so you still have a share the 9:1 steam going into the vesting pool. The amount of Steem that you get each week should increase. In the end, you are going to get much more Steem than what you put in. You can hope the market does not plummet faster than the slow increase in the amount of coins that you receive each week.

iamnotback

sr. member

Activity: 336

Merit: 265

Quote from: iamnotback on July 24, 2016, 05:26:05 PM

Could someone give me some explanation as to why anyone would convert BTC to STEEM POWER? (not STEEM which is debased 92.5% to 100% yearly)

arhag's (currently #1 ranked) post summarizes some of the thinking, and also I'd suggest my comment there for a bit of elaboration. In essence Steem Power is a prepaid subscription to network access. By stocking up on Steem Power now you are speculating that access to the network will be worth more to more people in the future, who will then be clamoring to buy tiny slices of your Steem Power to get in or to maintain their access. Obviously, that is a very risky bet (all cryptos are, including Bitcoin).

https://steemit.com/steem/@arhag/where-does-the-money-come-from-a-look-into-the-economics-of-steem

Thanks for sharing that. His calculation is wrong on the 5% tax for STEEM POWER. I already showed it is 15 - 21%!

Users might be willing to pay to gamble, but you can't charge more than the competition can sell the same service for. Thus the cost will be reduced by competition to the cost of securing the blockchain (since that is the only cost that applies to the rate limit), which in DPoS is very small and currently targeted to be 0.750% of the market capitalization per year. That is not enough to counteract the massive debasement of SP.

The economics of Steem are highly flawed.

generalizethis

legendary

Activity: 1750

Merit: 1036

Facts are more efficient than fud

Quote from: iamnotback on July 24, 2016, 06:50:31 PM

Quote from: iamnotback on July 24, 2016, 05:26:05 PM

Could someone give me some explanation as to why anyone would convert BTC to STEEM POWER? (not STEEM which is debased 92.5% to 100% yearly)

arhag's (currently #1 ranked) post summarizes some of the thinking, and also I'd suggest my comment there for a bit of elaboration. In essence Steem Power is a prepaid subscription to network access. By stocking up on Steem Power now you are speculating that access to the network will be worth more to more people in the future, who will then be clamoring to buy tiny slices of your Steem Power to get in or to maintain their access. Obviously, that is a very risky bet (all cryptos are, including Bitcoin).

https://steemit.com/steem/@arhag/where-does-the-money-come-from-a-look-into-the-economics-of-steem

You are basically going long for 2 years... in a crypto currency.

Seems extremely stupid to me.

Average of one year, assuming you start liquidating right away, but still, I agree, it is a very risky bet.

Price weighted average, but you wouldn't be able to decide when to sell. You'd be pre-deciding to sell early (or late).

You can sell your account too, probably at a reduced rate (though it would depend on your standing in the community).

@smooth, how long do curator's get payment on posts? Just want to know if that figures into the analysis.

smooth

legendary

Activity: 2968

Merit: 1198

@iamnotback: As you pointed out earlier, short term speculation is still viable by just holding liquid STEEM. It is the mid-term of for example 3-18 months that is somewhat shut out by the model. I don't know how much that particularly timescale matters, but maybe it does.

Quote from: criptix on July 24, 2016, 06:52:04 PM

But i guess smooth was saying that indirectly too with the very risky part.

Without getting too deeply into the details of what you can sell when exactly, which I don't think change the decision all that much (you would need a crystal ball to know exact timing), clearly it does not make sense to buy SP if you don't think the investment is viable beyond a year or two (or more precisely that the upside sufficiently compensates for that risk)

criptix

legendary

Activity: 2464

Merit: 1145

Quote from: iamnotback on July 24, 2016, 06:50:31 PM

Quote from: iamnotback on July 24, 2016, 05:26:05 PM

Could someone give me some explanation as to why anyone would convert BTC to STEEM POWER? (not STEEM which is debased 92.5% to 100% yearly)

arhag's (currently #1 ranked) post summarizes some of the thinking, and also I'd suggest my comment there for a bit of elaboration. In essence Steem Power is a prepaid subscription to network access. By stocking up on Steem Power now you are speculating that access to the network will be worth more to more people in the future, who will then be clamoring to buy tiny slices of your Steem Power to get in or to maintain their access. Obviously, that is a very risky bet (all cryptos are, including Bitcoin).

https://steemit.com/steem/@arhag/where-does-the-money-come-from-a-look-into-the-economics-of-steem

You are basically going long for 2 years... in a crypto currency.

Seems extremely stupid to me.

Average of one year, assuming you start liquidating right away, but still, I agree, it is a very risky bet.

Price weighted average, but you wouldn't be able to decide when to sell. You'd be pre-deciding to sell early (or late).

I just wanted to write that. ^^"
But i guess smooth was saying that indirectly too with the very risky part.

iamnotback

sr. member

Activity: 336

Merit: 265

Quote from: iamnotback on July 24, 2016, 05:26:05 PM

Could someone give me some explanation as to why anyone would convert BTC to STEEM POWER? (not STEEM which is debased 92.5% to 100% yearly)

arhag's (currently #1 ranked) post summarizes some of the thinking, and also I'd suggest my comment there for a bit of elaboration. In essence Steem Power is a prepaid subscription to network access. By stocking up on Steem Power now you are speculating that access to the network will be worth more to more people in the future, who will then be clamoring to buy tiny slices of your Steem Power to get in or to maintain their access. Obviously, that is a very risky bet (all cryptos are, including Bitcoin).

https://steemit.com/steem/@arhag/where-does-the-money-come-from-a-look-into-the-economics-of-steem

You are basically going long for 2 years... in a crypto currency.

Seems extremely stupid to me.

Average of one year, assuming you start liquidating right away, but still, I agree, it is a very risky bet.

Price weighted average, but you wouldn't be able to decide when to sell if you started that 1 year immediately now after purchasing. You'd be pre-deciding to sell early (or late).

I think crypto speculators are going to much more interested in a competitor which fixes this.

smooth

legendary

Activity: 2968

Merit: 1198

Quote from: iamnotback on July 24, 2016, 05:26:05 PM

Could someone give me some explanation as to why anyone would convert BTC to STEEM POWER? (not STEEM which is debased 92.5% to 100% yearly)

arhag's (currently #1 ranked) post summarizes some of the thinking, and also I'd suggest my comment there for a bit of elaboration. In essence Steem Power is a prepaid subscription to network access. By stocking up on Steem Power now you are speculating that access to the network will be worth more to more people in the future, who will then be clamoring to buy tiny slices of your Steem Power to get in or to maintain their access. Obviously, that is a very risky bet (all cryptos are, including Bitcoin).

https://steemit.com/steem/@arhag/where-does-the-money-come-from-a-look-into-the-economics-of-steem

You are basically going long for 2 years... in a crypto currency.

Seems extremely stupid to me.

Average of one year, assuming you start liquidating right away, but still, I agree, it is a very risky bet.

criptix

legendary

Activity: 2464

Merit: 1145