James A. Donald who was the first person who communicated with Satoshi on the mailing list where Bitcoin was announced, confirms that DPoS is not decentralized (DPoS is the blockchain technology of Bitshares, Steem, EOS, Lisk, Ark, and any Steem clones).
There is no possible way to design a voting system that pays rewards by debasing the collective money supply, which will be fair. I had written a blog explaining this mathematically:
https://steemit.com/steem/@anonymint/blog-rewards-can-t-be-widely-distributed
In my analysis, it is the economics of Steem as it pertains to incentivizing others to make apps for it, and the way that users are incentivized that does not correlate well to viral onboarding and app development. However, compared to all the other altcoins, it is the one with probably the most widespread use by people other than just speculators. So it does seem to be undervalued.
So although conceptually it is interesting, you are really going to need my project which will correct these flaws.
Re: Who is paying for Steemit?
Hi Guys, I am trying to do some fundamental research on Steem but there is one thing I don't understand and that i'm not finding the answer on. Who does actually pay for this whole project.
Hi Guys, I am trying to do some fundamental research on Steem but there is one thing I don't understand and that i'm not finding the answer on. Who does actually pay for this whole project.
Answer is here.
In short, everyone who owns the STEEM token pays for the rewards which are created by minting new STEEM tokens out-of-thin-air, but this burden is disproportionate because whales are able to redirect most of the money supply dilution to themselves via their numerous sockpuppet bloggers.
It is analogous to a masternode or proof-of-stake coin, where the whales siphon off most of the transaction fees and any minting of coins disproportionately.
To add, STEEM has a cetain reputation to each members, the higher the reputation the more likely you can upvote a certain topic there.
Incorrect. Steem Power (how many STEEM tokens you have locked up for 13 week holding period) determines your power in the voting and curation rewards.
The reputation thing is just a number which has no real impact other than readers see the number on all your comments. I have a high reputation at Steemit because I joined in July 2016, but my Steem Power is low because I sold most of my STEEM.