Below picture shows the growth of market cap of Steem (the base currency of steem blockchain) over the last one year period. A fantastic 10 times growth.
Steem is inflation based currency with 10% for first year, 9.5% for second year, 9% for third year and so on. And Steem is designed to support development of social media on blockchain - its user base also has increased now to 1 mn.
Below is my explaination for this dramatic growth of steem and what lies ahead.
What is Inflation
Inflation is defined as a sustained increase in the general level of prices for goods and services in a county, and is measured as an annual percentage change.
Read more: Inflation: What Is Inflation?
Actually what really happens is more fiat currency is printed so that the value of goods against currency increases causing a decrease of purchasing power of the currency.
It is done to motivate the currency holders/savers to exchange their currency for some other product or to engage in some economic activity so that they can grow their purchasing power over time. Anybody who simply holds their worth in fiat currency will over time lose most of their purchasing power/wealth.
Therefore, inflation actually a tool that helps force motivate the people to engage in doing some economic activity. Now depending upon the quality/type of economic activity a person undertakes will dictate whether his/her purchasing power will increase more or less in comparison to its fellow competitors. It is this choice of economic activity that a person, tribe, society, or country undertakes will make them wealthy or poor over time.
So in nutshell - inflation is a tool to redistribute the wealth/resources.
What is Network Effect
It is simple that more people join the network - more valuable it becomes.
Above picture shows how steemit (only one website out of many that offers services of steemblockchain) rank on alexa, which is a measure of how network strength, has grown over a year period for steem blockchain. A remarkable achievement.
Another direct measure is from @arcange report about users growth on steem blockchain, as shown below, is approaching now 1 mn.
Conclusion
Steem is a perfect blockchain that combines the powers of inflation and network effect to grow the economic value of itself and of those who have their stake in it by means of holding steems. Obviously the value of those steem holders, who take part in some activity that helps the steem blockchain e.g. witnesses, authors, and curators, will increase much more than those who simply hold the steem.
Having said that it is also important that large steem holders should stay away from taking rewards through authoring and curation so that more and more people join in to compete for those rewards and thereby generating necessary network effect. Because of that network effect the value of steem will go up which will reward large steem holders indirectly but handsomely.
Your comments will be much appreciated.
Actually, steem strategy in holding their coin is simply awesome. Everyone of us steemians were holding steem coin or better say forced to hold steem coins simply because it needs 13 weeks for us to withdraw it all.
Steem development further from here need investment. So all holders are investors. we all are in it together.
Very good post.
Well said "The value of those steem holders, who take part in some activity that helps the steem blockchain e.g. witnesses, authors, and curators, will increase much more than those who simply hold the steem"
I wish it was easier to spend steem. I think the problem is that it is on so few exchanges (and the wallet on Poloniex gets regularly disabled).
That is true but I am sure going forward situation will be better
excellent
Thank u bro. Steem taught me all this. I am grateful to steem.
@prameshtyagi - This is really great post with short read and easy to understand the inflation and how it reflects Steem. Million thanks for great article. :-)
Much appreciated your encouraging comments. thnx
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Weldon
thhnx bro
THANKS FOR GIVING SUCH INFORMATION
thnx bro
Nice job.....
thnk u
hooo thanks for the info Sir!
thnk u
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thank u bro to notify me of my achievements. all the best to u as well
Great post ,I am interesting bro.
Thnk u
Sometimes I hate this inflation thing as I have seen it abused by financial institutions as a way of robbing uneducated people off their hard earned money.
Your view is almost same as mine. Decentralization in cryptoworld is meant for distribution of wealth over wider range of receipients. It is vital therefore that more people join in the network for a wider distribution. Again, the power of steem in the economic world depends on the demand and if more people get their hands on it then the more powerful it gets and thus those who have it in their investments gain more.
I back you 100%
Thnk u for yr helpful and insightful comment
1 million Steem holders/users. That's really small!
yup but increasing
Thnxxxx fr ur innovative post & ur thinking.....Exactly i also agree with u bro. just awsome nothing to say...😃😃☺☺😜😜👌✌
thnx
9-10hrs normal phasing
Mt. Kitanglad-Mt. Dulang
9-10hrs normal phasing
Mt. Dulang-Mt. Langkayugan
6-8 hrs normal phasing
Mt. Langkayugan- Mt. Maagnaw
1-2hrs normal phasing
Mt. Maagnaw -Drop off
5-6hrs normal phasing
Welcome, Very good and extremely well-written article. I will accept as true with you that Steam blockchain is (though I would not say perfect) superb and quite well thought through a system that "combines the powers of inflation and network impact to grow the amount of itself and of these World Health Organization have their stake."
But I am unable to accept as true with you concerning another thing as they're merely not the particular facts.
For instance, "Steam is" NOT "inflation based mostly currency with99% for 1st year, 9.5% for the second year, September 12 for the third year then on."
Although Steam is inflation based mostly currency the inflation rates don't seem to be determined by the number of years passed however by the quantity of latest blocks incidence (or being produced).
In alternative words, and beginning with the arduous fork sixteen in Dec 2016 (as before that the rate of inflation was one hundred and sixtieth per annum - vast difference) yearly rate of inflation has been set to beginning nine.000% that variety is reduced by zero.000% once every 000%%% new blocks being created (created).