Source : Steem
A lot of drama has happened, a lot of things have been said. People burying one's head in the sand, and people leaving like all hell broke loose. These last weeks were a bit chaotic. And all this chaos was fueled by the decrease in STEEM price. That shows (at least for me) how all this is still fragile, and ready to collapse anytime.
As I'm no one here, I'm gonna allow myself to give my opinion, and a few solutions that for me seem evident, but might not to someone who has been here longer, maybe more implicated, maybe with more stake. Maybe I'm also just plain wrong, that's a strong possibility. I might get some hate from this, but please read this with an open mind. My words have no value and my opinion has been asked by nobody, so my ideas will remain only ideas. I just want to say them as it could give ideas to some and I think they need to be pointed out.
The observations
Whatever we say, STEEM price has decreased. I'm not speaking about the free fall of the crypto market, I'm speaking about the intrinsic price of STEEM. It went from the top places in market capitalization (it was even it the TOP 3 at some time, 2016 if my memories are correct) to 52 now. And it's losing a place or two every few days.
Source : CoinMarketCap
Independently of the overall price decrease in crypto markets, this decline in relative place in market capitalization is a strong indicator that STEEM is losing its core value little by little.
The causes
All that means that structurally, STEEM is losing value. Why does a token, or any good, lose value ? Because the supply is superior than the demand on the open markets. And we don't need to look further, that's exactly what's happening with STEEM.
So the cause of this is pretty evident. But how does this translate into the Steem economy ? It just means that more people want to "get rid of" their STEEM tokens they just got (essentially through inflation via the reward pool - also called mining via the Proof-Of-Brain protocol) than there are people ready to buy them. So the next question is : why is that ?
All that follows is my analysis of the problem, it's most certainly wrong, but it surely can be debated. I will make generalizations, there are of course exceptions, but for the sake of argument, it is needed.
The focus on SMTs : For me, the prioritization of SMTs is prematured. Everybody seems to want SMTs as fast as possible, when we have no application at all there to give a real value to these tokens. It seems like, from an external point of view, that we're trying to push these tokens into the "real world" as fast as possible, to fuel a speculative bubble and bring interest back to Steem, with a myriad of tokens the one more useless than the next. The focus should be, for applications, to find a real business model which is sustainable and that brings fresh capital into the Steem ecosystem. That is the only way these tokens will have any value. I won't speak about the current distribution of these tokens, that is opaque to say the least. It's the race to attracting delegators, that are blinded by these promises of grandeur, and if everything stays as it is, a sure way to a real financial bloodbath for anyone touching these things (except maybe the ones currently emitting them).
Bid-bots and vote-selling services. They are another major reason why STEEM is losing its value. Most of their delegations come from people who got their STEEM mining (not criticizing that), but that's blocking a lot of the available capital in services that are not providing any value. You can look at it like real estate investment compared to buying stocks (investing in applications, in curation initiatives, in fact anything that aims at increasing the value of Steem, not just becoming a Steem-reward-pool-sponsored annuitant). A lot of the reward pool is going to these bots (in payments people acquired via blogging, in curation rewards), and the owners are selling these newly emmitted tokens, increasing the supply on the markets.
The Steemit delegations. These are for me the best tool for Steemit to bring value to the blockchain. But in fact they are currently doing a lot more harm than good. The applications benefiting from these delegations are making STEEM pour into the open markets, making the supply of STEEM explode, while bringing no capital into the ecosystem. They are only money-dispensing machines, and everyone want to grab their part of it as fast as possible. This is the first problem they cause. The second problem is that these delegations are completely blocking innovation, as no developer (even if capable of creating something much better) will try to enter a market where a steemit-sponsored app is already operating. That would be a waste of time as users will spontaneously go to the better-paying app.
That's the three most evident things that for me are causing this decline in the STEEM price. SMTs might not be something that is currently contributing, but that will be the thing that puts the nail in the coffin.
The solutions
First I will speak about the solutions corresponding to the three main causes that were identified as contributing to STEEM's low price. After that, I will speak about technical solutions that could be easily implemented to boost STEEM demand and hence increase its intrinsic value in the short term, without needing to change the whole system.
SMTs : Here it is simple. Just stop the development. Postpone it. Wait it out a bit. It will allow to sort out applications with a real business model, that are here to stay, and the ones that are just waiting for SMTs to take the loot and leave. It will also encourage delegators to assess their investment and think more long term.
Bid-bots : Here the solution is also rather simple. Someone needs to take action, create a bot (sorry for the contradiction), that systematicly downvotes everyone trying to use these services. Everyone could delegate to it, and slowly but surely, the demand for these services will disappear, making the game less rigged and approach this Proof-Of-Brain ideal. This common funds should also be actively maintained to counter any intiative to replace the current system by something else. It should also target circle-voting and other abuses. This might of course, cause a little bit of panic, with all big-stake holders, losing their golden-eggs goose, powering down and selling their STEEM. But that's a necessary step. I'm also sure a lot of them won't leave but instead redirect their investment into projects with a high potential added value.
Steemit delegations. The solution is also pretty simple. Steemit should revoke all current delegations and oblige the new applicants to prove that a Return On Delegation will be in place : meaning their business model is sustainable, will bring more money into the ecosystem than out, and that this delegation will be able to be replaced (no more curation-rewards- or beneficairy-fees- -based illusional and harmful business models - I have no other term, but we can not consider them being that)
Of course all these solutions might seem a bit exterme, so I will give 2 that are easy to implement, and without being so harsh:
Make the value of an upvote given to a same account decreasing over time. For example A votes B for X rshares, if the next vote happens two minutes later (I will not consider VP here), apply a penalty in the rshares calculations. Make this time-decay progressive so that, for example, a week later there's no more penalty. And the more votes there is in that window of time, the bigger the penalty applied, and the longer the time needed to go back to the "no-penalty" zone. This would stop bid-bots, vote-selling services, self-voting and circle voting at the same time.
Make delegations like the power-down system. When I delegate to someone, every week, 1/13 of the delegation is automatically undelegated and returned back to me (with no period with the delegation bearing no fruits). Like this, I need to constantly renew my delegations, also allowing me to review my choices every time. That will allow the dormant wallets to stay dormant, so more Steem Power blocked and more relative stake for everyone else.
If you read it, thanks !
See you in the comments if you want to debate this.
I am not that worried. There are so many coins now and steem is still in the upper 5%. Other coins will get the same price issue once the key people are wanting to sell or the blockchain is not used at all. By that time steem will already have a large middleclass.
I'm quite guilty myself for using the bid bots. It's hard making a lot of Steem organically
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I totally understand and I have nothing against the users, I'm against the "system". But when you say making a lot of Steem organically, by using bid-bots you don't make any Steem, you spend some to gain some (and in fact you're losing money with the 25% curation rewards that are going to curators - the bid-bots). The only ones making Steem with these services are the owners themselves.
The problem is that the whole economic system resolves around them so everybody is just thinking : "I need to get some rewards, I'm gonna use some bid-bots", and in fact this is blocking all "normal" activity of people voting each other, interacting with eath other and so on... Everyone focuses on the rewards in $ under their posts (or next to depending on your front-end) instead of focusing on interaction. And the illusory trending page (which is only in fact a leaderboard of who gave the most money to the bid-bots owners) is encouraging that behavior.
The ones with the means to buy enough votes get on trending and get some attention, for all the others, using bid-bots doesn't bring anything organic, just the illusion of having rewards on your posts (hence upvotes by people who deemed your content worthy of getting their upvote).
At this stage, I just think the problem is the systematic use of these services, who are destroying all the Steem economic system, which is distributing rewards to content creators, depending on the upvotes received by the community.
Although my experience level is 50+ I'm slowly learning about Steem as i go. Yes, that 25% curation is unfair and now I just realised we profit little using those bid-bots.
It's also quite unfair when new users get to upvote with ≤0.001 and it means a post could have 100+ upvotes but barely any reward!
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The system is really complex, and even people that are here since the start still learn new things everyday. The curation is, for me, fair, as it rewards you for upvoting other people posts (hence reading, interacting, finding good content, etc.). In the case of the bid-bots it's different, as they profit from this curation system without bringing the "good things" (interactions, as they're are automated bot paid for voting) that are expected from this system.
And yes for the little upvotes, that's unfair as Steem is 100% based on stake (your Steem Power, hence your wealth) and they should be other criterias taken into account (interaction for example, engagement in the community, etc.).
$rewarding 14min 100%
Interesting solution with the automatic undelegation. I think it can also be implemented. The problem is that everyone seem to wan't different thinks. It's hard to find a consens that will lead to changes...
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Yes, that is clearly a problem, everyone has its own idea of what is good / bad and it depends a lot of each person's situation and perception.
As I have nor the stake, nor the skills to make anything I spoke about, this post is more about trying to create a debate, we never know, maybe the thousandth time's the charm and we will reach consensus :D
There are other community projects similar to SMTs which will work sooner.
I think steem should move further away from Steemit Inc, but have a good relationship, to depend less on one company.
Decentralization!
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Yes, I saw some of them pass through, great initiatives ! We need the "people" to take control of what will be made and how it will be made. Not someone forcing changes on everybody.
Totally agree. Good relationship is necessary as Steemit Inc. is still the best way of promoting the Steem Blockchain. Just need to take matters into our own hands a little bit more.
I was writing this because you said
..in your solution list.
But that's not so easy.. there are already many dev teams working on steem. Bear market is already hard enough..
Steemit Inc is basically a core dev team of the blockchain, not more. And as company stinc was pretty bad at advertising.. They advertised like 0, which is also a often told critic..
For me (and that's my opinion), SMTs (at least for now), will be bad and have the opposite effect of what is expected.
SMTs for now have no value except the value given by the fact they are issued by applications that are built on the Steem Blockchain, depending on the fees they take from posts that get their rewards from the reward pool. And as STEEM intrinsic price is continuously declining (as said), the tokens are in fact of no value, and that no-value is itself decreasing.
The apps (like any company) need a business model before issuing tokens. If not, this will just be another bloodbath and the positive attention Steem could get from the launch of SMTs will be destroyed by the vast majority of the tokens seeing their value diving fast to zero.
I was speaking about the development initiatives, more than what they are developing. I think it's nice to have alternatives to what Steemit Inc. will try to enforce, even if I'm totally (for now, not in principle) against the fats release of SMTs.
And for the promotion side, I was speaking about steemit.com , even with no real advertising, it's that website that made Steem what it is now. If we speak about the future, yes I would prefer them (and that's the direction it's taking) to only focus on blockchain developement, and let the advertising to the applications.
Sorry but I have to hardly disagree.
SMTs ans similar tokens are not as you mentioned.
For example:
I heard many ideas about Token bidding by burning sbd (sending to @null) which will decrease debt and increase value.
As explained tokens do not have to be bound to the Reward Pool.
SMTs and similar technic is just another basic infrastructure element for building dapps or other things. :)
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In this case, I'm all for reviewing my position. I'm just describing what I think I'm seeing now. An emission of tokens by "companies" (applications) that bring no fresh capital and have no source of revenue except the one based on the reward pool. If effectively, token emission is bind to burning SBD, that's really great and I want to see that applied.
I'm not against the ideas of SMTs, and I'm sure technical possibilities will be great. I just think that if when releasing SMTs, 99% of them have almost no to no value, that can do more harm than good. That's the only reason (that I explained) that I'm in no hurry to see SMTs being released.
I would prefer to take the time, as you just mentioned, to see this kind of mechanisms applied, have guarantees that tokens currenlty being "promised" by the big emittors have a way to guarantee a minimum value (like you said by burning SBD for example).
Yea well.. Bringing value is another chapter..
We saw the same problem with blockchain and all the new coins and then all the icos..
But I think steem and smt, infrastructure is also already worth much, because people can build things upon it. Which then brings value, because it can be used.
And in fact steem is yet already used and many would miss it.
It is a great blockchain which is capable of yet unimaginable.
(f.e. Ethereum is less capable)
Anyways great discussion. :) going to vote you and myself to increase visibility :)
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Articles like this give value to the steem project :)
Thanks for your kind words !
I hope this can provoke a nice, calm and constructive exchange of ideas :D
Good mindset :)
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Hi @algo.coder!
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Hi algo.coder ! You just received an upvote from @share2steem !
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Whoa I didn’t know we had to post through the dapp tho 😣
Yes, you have to post through the app (in fact you post on Instagram, Twitter, etc.) and it's automatically cross-posted to Steem. You don't post "through" the app itself.
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I upvoted your contribution because to my mind your post is at least 6 SBD worth and should receive 161 votes. It's now up to the lovely Steemit community to make this come true.
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TrufflePigNods to algo, many have been saying this for a long time and yet not much action but we have seen people take steps to do some of these. It’s a slow road ... losing the golden egg for manybas you mention and also those re mining ...
The only thing I have the skills to make is the bot that would automatically downvotes everyone who tries to use bid-bots and vote-selling services.
I might do it just to see the reactions and if it gets some support... Could be fun ! :D
A few people tried this a few months back and were swiftly destroyed. It could be fun, and it could also be the last thing you ever do on Steemit. I would advise you to tread very carefully here.
There are bid-bots like Smartsteem that filter out the abusers and spammers, and I see absolutely nothing wrong those types of services. Bid bots emerged as a result of Steemit's faulty curation algo, so as far as I'm concerned, these services are filling a need.
Clearly you're right and this is coming from faulty developement.
What I was saying is, as long as the fault isn't corrected, could it be "manually" corrected ? By suppressing the demand on these services...
Anyway, I don't plan on doing something like that, I don't have the means, and downvoting with no SP would have no impact at all.
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STOPExcellent articles ; these are all issues which need to be addressed. I think there are applications (such as APPICS) which are waiting for the SMT's and have already done their ICOs and will drive demand for steem holding STEEM to obtain blockchain bandwith . You could argue that we should encourage Steem social apps directly on the blockchain but I think these problems you mention are too vested in the establishment to change and this will see ultimately STEEM becoming a blockchain bandwidth provision service (pay to play - ie hold steem to get RC's) with the social side of it implemented in layers on top using SMT's which have different rules. Is this all bad? Not really. It will drive apps to hold steem to obtain RC's for their users. They can run their own business models on their SMT's which will succeed or fail based on their ability to draw money into the system.
I would love to get your take on what it happening with Share2Steem at the moment also?
Thanks for posting your thoughts @algo.coder I appreciate your presence on the Steem blockchain 😊
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STOPWow, that's the best argument against bid bots that I've seen. An appeal to economics and good business sense.
Interesting ideas I just disagree with downvoting the bid bot users, in the real world we have advertising and marketing expenses and if someone wants to pay for exposure we should have an ecosystem in place to have a use for everyone. I understand it takes from the reward pool of deserving creators yet I agree with flagging for disagreement of rewards, so if trash is being bid bot'd or circle jerked it can be flagged for gaming our reward pool. To punish investors would push a large portion of STEEM holders away from the platform. With that small edit to flag those undeserving of the rewards to get all abusers not just those paying for marketing I think you could run for President of STEEM! Not sure why I was not following you yet I am now, looking forward to some @share2steem updates! (you see my sneak peak @steem-horizon? I want your opinion and money if you want to help lol)
Great ideas! (I missed this post)
One other thing is that when the price of Steem is rising the whole mood changes, but like all cryptos, Steem has been dropping for nearly all of 2018 - three months of rising cryptos and this may be a much happier place.
With no bots people get stuck on a reputaion and can't go up - which is discouraging - apply your genius to that problem too!
For example, in my first 18 months as @sift666 I went from 25 rep up to 64 rep, but stayed on 64 for six months. So I started this new account, used bots, and went from 25 to 66 in six months in spite of the fact that Steemit was running like a bag of shit (Hardfuck 20)
Anyway, Happy Xmas and all the best for the New Year
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STOPDo not miss the last post from @steemitboard:
Dear @algo.coder
Just decided to see how have you been doing, since I didn't hear from you in a while. I noticed that you didnt post anything in a while.
Did you give up on Steemit? :(
Yours,
Piotr
Thanks for cerating @share2steem man please please posts something new just so i can resteem it , its important u posts ome short quick updates just anything really just one image or a few sentencesd abouts hare to steem etc
Ooooh innovative, thats gonna be nice
yeah man thats crazy i mnever thoiught of delegation having that power down system too! They make you wait but yeah why not have it power down too?
@mughat also thought of why not reverse it and make it easy to instantly powerr down but hard to actually power Up and make it take a WHILE to fully STAKE... so only serious stakers get ina nd anyone can get out fast so more peopel would have an easier idea getting in
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