Introducing Steem The First Anarchy Mined Coin

in #steem8 years ago

Steem is a pre-mined coin, there is a term that some use for pre-mining, they call it ninja mining. I recall a Reddit thread with Dan Larimer defending how Steem was mined to an angry sounding Redditer.

The thread was particularly interesting to me because, even though my first Bitcoin transaction was getting on for two years ago now. I am still very new to the community, Steem has introduced me to a world of chat threads with people speaking in a technical language that is just beyond my understanding.

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For these last few months, I have been an interested observer, often I have read threads which whilst beyond my technical knowledge, have been fascinating to observe.

This has allowed me to gain an insight into some of the internal and external politics that come as part and parcel of the cryptocommunity. I have also been able to draw more direct conclusions regarding the future of cryptocurrency in general and if we really will get to the day when blockchain produced currency, is King.

Game Theory And The Blockchain

It is getting to the point in the human epoch, where the financial paradigm that has been in place in over large parts of the planet for around half of the last millennium. Is slowly waking people up to the fact that the system is broken.

The 2008 global banking crisis; or as the bankers called it; another day at the office, exposed the blatant, state-sponsored, criminality being perpetuated on a daily basis right in front of our very eyes. Suddenly there was a world-wide realisation, a kind of financial quickening, when ordinary people were made aware of the fact that banks, were the riskiest business of all and their profits were built on promises, dreams and lies. The exact type of business, that most banks would run a mile from.

After we were asked to swallow the scandal of the fraudulent subprime derivatives hoax, and the shockingly criminal, Over The Counter derivatives. We were then asked to sit back and watch as our governments bailed out criminals on a global scale, to the tune of trillions of dollars. And just to rub salt into the wounds, the bailout money would be printed by banks that were part of the whole scam.

But hang on, wait a minute!

There was one hero nation in all of this; the tiny island nation of Iceland broke ranks, their government and more to the point, their citizens, decided that acquiescing to the rotten status quo the bankers had established, was not the only path they could take.

They did what every country should have done, they identified the criminals, and they jailed them; banks were allowed to fail and one was completely taken over. This is what would happen if you or I were to set up a fraudulent business that defrauded millions of people world-wide; why not with a bank?

Jailing the bankers in Iceland wasn't easy, a lot of people suffered, 100 new taxes were introduced to repair the damage reaped on the Icelandic economy.

And Herein lies the problem; in my country, England, the most repeated reason for why Iceland could jail its bankers and the UK could not, was; There are only 300,000 people in Iceland, that wouldn't work in a larger economy.

I find this statement both ridiculous and breathtakingly insulting all at once.

It is ridiculous because of the fact that regardless of GDP, the banks in Iceland had their tentacles as deep into their society as the UK banks have into ours. It was no more or less difficult to jail the bankers their than it would have been here.

The insult implied from the statement, is that our banks are somehow different, or special. But in reality, neither the insult or the patronising tone was never meant meant by the deliverer of this oft repeated statement.

"There are only 300,000 people in Iceland, allowing banks to fail wouldn't work in a larger economy."

Actually means

"That's all fine and good for Iceland, I'm glad they're taking a stand; however allowing banks to fail in this country, may mean I would lose money, which I'm not prepared to do on a point of principle."

This is the crux of game theory; self interest will always outweigh group survival.

Playing The Game

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If I got hold of a Culture displacer, and I could transport 30 Steemians into 30 separate rooms, and in each of those rooms there was a person who told you the following.

  • If you say yes, I will give you $50,000
  • If you say no, you will receive a $1,000,000 equal share in the group prize of $30,000,000
  • If one person says yes, then nobody apart from the person who says yes will get any reward.
  • Your decision is anonymous and will only be known, if everyone says no.

The above is a classic game theory situation; what would you do?

If you say yes, you guarantee a nice juicy $50,000 reward; however if you say no, whilst you could become a millionaire, you have do not know who the other 29 are and cannot communicate with them.

You know that if you were all in a room together, you would all say no, as everyone would want to be a millionaire.

However you're not all in one place, and the fact that you are thinking like this, means that at least one other person has come to the same realisation. Which means that person could well say yes and bag the personal prize.

If someone is even considering saying yes, then there will be giving it more than just consideration, in fact you realise; you can't trust anyone and you should just say.

Yes! Show me the money!!

OK, maybe your faith in human nature exists on a higher plain than mine and you would say no. But for the record, I would say yes, I would be a fool not to.

Change the situation to say 10 handpicked members of family and friends, then I would say no, because I know and trust them.

So how do we reconcile the need and desire to have a decentralised system of government and currency, with the very real human desire, to out compete fellow humans?

Gaming The Game - The Anarchy Mine

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80% premined crypto that has a central issuing authority. Dead on arrival!

While I was performing my due dilligence on Steemit back before I decided to put every waking moment available to me, into creating content. I came across a Reddit thread, which had a very angry sounding man, telling anyone who would listen that Steemit was a scam.

The OP clearly had bags of technical knowledge, the way he spoke suggested he was a miner, and heseemed to have been a part of the cryptocommunity for a while, so I decided to read the thread.

As I said, the OP had a lot of technical knowledge; so he was using a lot of terms that were completely unfamiliar to me.

At some point in his thread @dan (our very own Daniel Larimer), joined in the discussion, in an attempt to defend Steemit and to assuage the fears of the poster, and anyone reading the thread, that Steemit was a scam.

In fact the way @dan, dealt with this guy, was what convinced me to give Steemit a go. He came across as very balanced and calm, and appeared to answer the OPs original accusations, in a satisfactorily manner. Whilst the other guy, just came across as a complete asshole.

(If @dan is reading this and can remember the thread, I'd love to add it to this article, as I never bookmarked; doh! And can't find it now.)

What I noticed as I read this thread, was that the OP kept on bringing up the fact that Steem is an 80% premined coin. He was like a dog with a bone, he simply wouldn't let go of the point and he kept on using the same phrase, over and over again...

Ninja-Mine

Being a cryptonoob, I didn't really get the significance of that term, I just thought it was just a way to give a cool name to something that was quite boring.

However as I read on, I could tell by the tone of @dan's answers to the OP, that he classed the term as a derogatory one.

I realised that the term ninja-mine, was used to suggest something untoward had happened. I remembered @bleepcoin telling me ages ago that there could be legitimate reasons for pre-mining a coin, but until Steemit, I couldn't think of one.

At some point before the creation of Steemit, when it was just a seed of an idea in the mind of Dan Larimer. He must have considered the following problems:

  • The goal is to build a social media platform based around a blockchain based cryptocurrency.

  • The site has to reward users for voting and posting.

  • The micropayment model has already been proven ineffective, therefore payments have to be significant enough to motivate users to participate, and get a wider audience talking about it.

  • In order to create long term stability, the cryptocurrency created for the site, must be able to withstand large numbers of people cashing out their rewards every day.

  • People have to trust the model.

So the first two goals were achieved through code and innovation, the second two were achieved through the way Steem was mined and distributed.

If the Steemit.com algorithm, had not been given so much Steem to play with, we would be looking at miniscule payments. Steemit would be just another micropayment site, hard to use, impossible to be motivated by.

Then of course came the question of how to use self interest to the advantage of the group; that came in the shape of Steem Power. Having a growing vested interest, whilst still being able to realise liquid funds, is absolutely unique and what gives Steemit its strength. The attribution of Steem Power wouldn't have been possible without the 80% anarchy mine.

With strength comes longevity, a two year power down period in order to realise your vested interest, is the perfect way to keep everyone; well, you know... interested.

The Balance Of Power

It's not anarchy! I hear you say; it's just a microcapitalist model, with the Whales taking the place of the over inflated elite, bougorsie and us the minnow proletariat are left to swim in their wake; nibbling on the crumbs of zooplankton they leave behind.

Not so...

Capitalism was the idea that self interest could be harnessed for the good of the group, there are many examples where healthy competition spurred on innovation and industry. However the self-interest of the lawmakers, often skews the rules of the game in their favour, thus capitalism fails us over and over again.

Communism espoused the notion that everything should be fairly distributed, as there was enough for everyone to go around. The problem was, that once again the fueling drive of self-interest, from those in charge meant that things were much more fair for them, than anyone else.

The blockchain, whilst offering a decentralised environment in which to operate, doesn't eradicate the odour of self-interest. For every wonderful blockchain innovation, there are dozens of pump and dump scandals, that are driven by self-interest.

However Steemit's anarchy mine answers the problem; the Whales, the users with the highest vested interests in the site, can only realise their fortunes if the group does well. This is in direct opposition to the capitalist society at large, the sentiment is best captured by the words spoken by Ray Liotta's character Henry Hill, in the legendary Scorcese movie Goodfellas:

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But now the guy's gotta come up with Paulie's money every week, no matter what. Business bad? "Fuck you, pay me." Oh, you had a fire? "Fuck you, pay me." Place got hit by lightning, huh? "Fuck you, pay me."

If you're a Whale in the real world, then if the system you have built colapses, you can haul your limited liability ass over the hills and far away, and still come up smelling of money.

You can boil capitalism down to those four little words...

Fuck you, pay me.

...and I guess Communism can be reduced to:

Fuck you, I'm getting paid.

An Impossible Utopia

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image credit: James Christopher Hill

So the Steemit game has been set, the rules have been laid out; it can be argued it's not a level playing field; and it can be counter-argued, that nothing ever is...

As our society grows, it will be fueled by self-interest, but unlike usual, the fortunes of the very rich, are intrinsically tied to the very poor. The Whales need more people to join the Steemit community and to profit, they need the self-interest of others in order to realise their own.

This for me is the only way any anarchocapitalist society can survive, one not without order, yet without orders. One where anyone can join in and play by the same rules as everyone else. There will still be advantage and disadvantage, there may even be inequality. However that will even out over time, as the Whales slowly liquidate their huge interests. As they do, they will be replaced by more, and the system will keep growing, how large, is anybody's guess.

The point is, I, you and everybody who joins Steemit, now knows what the people in the other room are doing, we know that nobody is going to say no and run off with the million dollar prize. We know beyond a shadow of a doubt, that if everyone on Steemit started powering down their SP today, there would still be 50% in the system in 12 months time, locking us together in a self-interest inspired embrace.

The anarchy mine, has set new rules for an old game, that has upset some of the old players whose self-interests have been disrupted. However there is no doubt, it is a model that will be copied again and again in the years to come.

Onward the revolution!

Cryptogee

WHAT DO YOU THINK? WOULD YOU HAVE SET UP THE STEEMIT MODEL DIFFERENTLY? CAN YOU SEE A USE FOR THIS MODEL BEYOND STEEMIT? LET ME KNOW BELOW!

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Is this the link you were looking for? https://bitcointalk.org/index.php?topic=1466593.msg14812610#msg14812610

Also Dan has a very interesting blog post on how to launch a cryptocurrency legally https://bytemaster.github.io/article/2016/03/27/How-to-Launch-a-Crypto-Currency-Legally-while-Raising-Funds/ which is probably related to the steem lauch.

Thanks truthtaco, that did look like thread, but I don't see any of Dan's comments on there

Cg

For clarity sake, Steem has been entirely mined and not a single token was pre allocated (pre mined).

Granted im not a huge crypto guy, but could you clarify for me why this is not a premine. BEcause I have always assumed it was. This is the quote (from you i believe) on which i have based that assumption. (its from the bitshares forum).

We have secured ~80% of the initial STEEM via mining. Our plan is to keep 20%, sell 20% to raise money, and give away 40% to attract users / referrers.

Am i misunderstanding what constitutes a premine? I like to think im a fairly intelligent person and even though i know more about crypto than 90% of the general population, I don't hang out on bitcoin talk or anything.

Im kind of going from context here... but if the argument is that mining actually occurred (albiet in a closed community), as opposed to the coins just existing ex nihilo as a part of the newly created blockchain, the distinction seems kind of meaningless.

Sounds like "insta-mine." Or something like it?

Technically speaking a pre-mine is when coins are allocated prior to mining.

Steem had no coins allocated in such a manner. What it had was mining that was theoretically open to anyone, but deliberately made obscure and technically challenging so relatively few ended up mining it. That setup allowed Steemit to mine 80% of the initial supply at relatively low cost.

What Dan wrote in his blog here is for all practical purposes exactly what happened during the Steem launch.

Fair enough.

though if I were a founder, id be thinking real hard about getting a place in antigua or costa rica or something and just chilling there.

Because "it was 'theoretically' open nudge nudge wink wink" doesn't really play that well with certain government types.

and id also be thinking real hard about taking that blog down.

It was not mined by a closed community in any way. It launched for everyone to mine. However there are MANY coins that are mined into existence. Steem obviously wasnt considered valuable enough by many people. It is their fault and now they are jelly?

Do you really think that if you started a chain and people chose not to mine it (after you post the announcement and started mining)...is this a premine?

The only thing people didnt know the day of launch was that bytemaster (dan larimer...aka one of the most brilliant crypto devs in the space) was the dev behind it.

What makes a coin a "premine" is that others can mine at the same time you are. *Premine = you mine before you tell the world THEY CAN

@Biophil, it is not an instamine either. That is when you automatically alot yourself a % of the supply before mining even starts.

Hope this helps.

This is not the case... please consider changing it to reflect facts. ;)

Do you really think that if you started a chain and people chose not to mine it (after you post the announcement and started mining)...is this a premine?

No, i don't think that.

Steem obviously wasnt considered valuable enough by many people. It is their fault and now they are jelly?

Well, they may be, but im not. I was just misinformed. Then again, if a (i like to think pretty smart) guy with a couple of advanced degrees gets the impression when hes looking into a potential investment that the coin was premined perhaps there might be a larger problem.

What makes a coin a "premine" is that others can mine at the same time you are. *Premine = you mine before you tell the world THEY CAN

I assume that you meant to say "others can't mine", but i see. This is what i assumed a premine was. My impression reading that thread (and another one on i think bitcointalk)was that this was the case: IE that the 80% was mined, then an announcement was made. I am glad to hear the real story.

incidentally, im not sure if its the same thread referenced by CG, but this is the thread where that led me to believe it was a premine.

https://bitsharestalk.org/index.php?topic=22125.0

the above said, here is a quote from dan on bitcointalk

After we launched a new term was introduced 'ninja-mine' which I presume means "sneeky"... but we admitted at launch that that was our intention. ...

im going to research a little now because im curious, but i have to say that quote and youre below seem at least a little at odds with each other. theres a difference between complete openness and ninjas, wouldnt you agree?

It was not mined by a closed community in any way. It launched for everyone to mine. However there are MANY coins that are mined into existence. Steem obviously wasnt considered valuable enough by many people. It is their fault and now they are jelly?

also this

We didn't announce this on BitShares earlier because we figured this community would better understand the value of what we are doing and make it
difficult execute the strategy bytemaster recently blogged about:
^ (thats from ned aka thereverseflash)

the blog in question was basically how the best way to raise money for a startup crypto without getting into compliance trouble was to mine that currency with little competition. Basically the strategy it reccomends making a low key, UTR announcement then basically mining in secret so theres no computational competition.

So at the absolute very least, the founders went out of their way to keep this "open" mine of yours a secret from those they believed would compete with them to mine early coins. Good bad or indiffernt, thats a far cry from

It was not mined by a closed community in any way. It launched for everyone to mine. However there are MANY coins that are mined into existence. Steem obviously wasnt considered valuable enough by many people. It is their fault and now they are jelly?

I don't think its a terrible strategy, and like i said im not a huge crypto guy i actually agree with dan that the BTC talk ppl are kind of shooting themselves in the foot with a bunch of arbitrary rules that don't make sound business sense.

But glastnost it was not. And trying to rewrite history to make it seem like it was is ultimately worse than just being honest about what happened.

one more point, then ill STFU.

This is actually a pretty interesting compliance issue, because what it really boils down to is what consitiutes a "public announcement". Traditionally, such things involve taking out an ad in a newspaper or trade journal, or going through the preliminaries of listing a company on an excghange.

In the "real world" what makes a public announcemen a public announcement t is that people who had an intrest in the matter or the industry either knew, or ought to have known. But its way tougher to judge that standard in crypto.

OK, thanks Ned, so can I ask about the 40% allocation figure mentioned in the white paper? I'm clearly misunderstanding that. :-)

Thanks

Cg

Sure, let me know page reference and I will clarify

OK, I think this is what I have been talking about, though maybe a case of Chinese Whispers? I have heard the 80% mined 40% given to Steem and so on, quite a few times now; anyway here it is..

Steemit, Inc mined about 60% of the available STEEM the first day and then continued to mine until it had mined over 80% of all available STEEM the first week. This representes over 320,000 STEEM mined by Steemit, Inc. Steemit then transferred 53,000 STEEM to 6 founders as VESTS. VESTS is STEEM that has been locked up for an average of 1 year, it can only be converted back to STEEM via 104 equal weekly payments. Steemit then converted its remaining STEEM into VESTS. One week after launch less than 20% of STEEM (80,0000 STEEM) was liquid and almost all of it held by anonymous miners.

Cg

I think it basically means, while steem mining was open to other miners (Because it was open to other miners, it was not a pre-mine), Steemit, Inc mined 80% of the total steem mined in the first week. Which after that was distrubuted to the founders as Steem power. Steemit, inc then powered up almost all its steem. There was 20% remaining STEEM (liquid), which was mostly held by independant miners who mined in said first week.

Good discussion point. Good to see I'm not the only one that is thinking about this. Buy low, sell high, it seems so simple but most investors still don't seem to get it :-) Does anyone know about: https://www.coincheckup.com They seem to give this complete indepth analysis of all cryptocoins. On: https://www.coincheckup.com/coins/Steem#analysis To see the: Steem Analysis

Cool, thanks for the info :-)

Cgee

Outstanding observations CG

Granted, but terrible syntax/punctuation. Very annoying.

I look forward to reading your wonderfully punctuated, posts, give me a shout when you do.

Cg

@cryptogee There always has to be at least one troll in every comment thread... Unpublished and highly critical, yup that guy's going places for sure.

Nice work CG, I'm sure your article will do a lot to help those new to the world of Crypto and Steemit. I did a bit of research back in the early days of Steem as well so see exactly what the plan was but it was kept pretty close to the vest up until release. You did a great job explaining the concepts behind Steemit and the reasons for many of the decisions made during it's inception.

Upvoted, and added you to my followed list. :-)

WHAT DO YOU THINK? WOULD YOU HAVE SET UP THE STEEMIT MODEL DIFFERENTLY? CAN YOU SEE A USE FOR THIS MODEL BEYOND STEEMIT? LET ME KNOW BELOW!

Say you create 2 currencies for something like our use-case:

Currency A) 1 million people getting 10 coins each = 10mn coins

Currency B) 100 people getting 9.5mn coins and another 100 getting the rest 500k coins = 10mn coins

Starting from different ends, what will happen in case (A) is that wealth will start to consolidate in a few hands over time while in case (B) wealth will start to be distributed to more hands.

So (B) is initially worse, but because coins are spreading, it actually works as a model for distributing wealth, while (A) because it is constantly getting consolidated, isn't working to spread the wealth.

Nice way to put it, and you're dead right, the first way leads to a micropayment situation, whereby nobody is prepared to give away more than they're earning, and the system stagnates before it has even begun. The second path leads to the top 1% having to share the wealth around in order to keep the system alive, they care, whereas the masses won't, not without anything to hold their interest.

Cg

Yep... in a sense if you start with a perfect distribution it will only get worse (so users will have an ever-worsening experience). If you start with a bad distribution like steem had at the start, it was so bad that it could only get better (and thus it started trickling down to the users who came onboard). The system wouldn't work without this trickling down because there would be no incentives.

Kind of like matter in the early universe, there had to be inequality so that hydrogen could start clumping together, a perfect spread would have meant that nothing ever happened, as everything would have had an equal and opposite attraction to everything else.

Cg

Very insightful article. Thank-you for writing it.

When new users join there is the initial shock of dealing with a system, a set of social rules, that differ greatly to other social networks. Combine this with frustration when they don't write posts that return high rewards, while seeing others consistently "win", they leave.

How does this fit into the prisoner's dilemma scenario you described? Either players trust one another, work together as a group and benefit, or they cash out because of self-interest. But where do those who join and fail to produce rewarding content fit into this?

Good question, you have to adjust the analogy to fit them in; there has to be an extra caveat, that is the guy says you won't get the $50,000 for 12 months, and the million won't be till 3 years, however all rules still apply.

The people who give up after a few weeks, are the ones who said "fuck it, I can't be bothered to wait, and walked out of the room.

Those people, are life's quitters, and they will be quitting something else after they quit Steemit; I know because I was like them, always giving up when things didn't go my way, then I stopped doing that and things started going my way.

If someone leaves here after a few weeks, that's their loss, but I highlighted in the Spotlight last week, a lady who did 27 posts for a total value of about $0.85 and then she struck gold. Each time that happens it spreads the wealth, slowly but surely; I have more money than some, less than others, that's life. Though this is a fairer model than life; that will become more apparent over time.

Cg

@cryptogee Great article. I am very new to Steemit, total of four days now, and have been very confused with every step , but have learned a lot quickly, and your article wrapped up the idea of Steemit and the scope of what Steemit is nicely for me. Thanks!

As for your question at the end. I do not know right now but am excited to find out. Take how flags are handled and how they affect possible monetary value (I do not fully understand the full process). If someone is targeted by a group of whales, would people consider that a violation of someone's rights and would the market be able to correct itself by taking out this group? If Steemit can self correct these "monopolies" then to me I say it succeeded. All models can be approved upon and adapted to depending on a given situation, so I bet there will be various takes on this model to fit in other industries in the future.

Nice one Jeffrey, welcome to Steemit! :-D

The thing is, as I point out in my article, there is no point in targeting someone because you don't like them, that will simply harm your reputation, and on here rep is everything. A bad rep would be disastorous for a Whale, they wouldn't just be able to start operating from a new account, because everyone would see them transferring their SP to the new account.

You will only get targeted on Steemit, if you plaigarise and/or spam, which is fair enough. I have seen people on here, copy and paste the same comment with a link to their article, on 20 or more posts. There was one where I lost count after about 75 posts, he got flagged, and rightly so.

The point is, the Whales get to influence behaviour, they reward good behaviour; which basically amounts to, post good articles, not copy and pasting without attributing, and not spamming.

The system will evolve and change as time goes on, and there will always be people who will be moderating content, some will have power, some won't.

We're all in this together :-)

Cg

This is an excellent post @cryptogee. However I feel compelled to correct you on one small point. Your article confused ninja mining and premining. Let me clarify, ninja mining is when the dev or insiders quickly mine the first blocks secretly without notifying other miners ahead of the launch, so only they can mine. Very shady!

Pre mine on the other hand is about intentionally designing a larger number of the coins to be generated in either the genisis block or the first few blocks.

Both result in devs with large % of total coins. It should be clear that ninja mining is shady always. Steemit, did NOT ninja mine. Premine on the other hand can be done for honest valid reasons, ala ripple or steemit.

I know, I was just quoting the irate OP, as I said, I didn't really understand the term, and then realise the guy was completely misrepresenting Steem.

Cg

However Steemit's anarchy mine answers the problem; the Whales, the users with the highest vested interests in the site, can only realise their fortunes if the group does well. This is in direct opposition to the capitalist society at large

Im not an anarchist. Im a capitalist and i don't believe the two philosophies are compatible. But for an anarchist, this seems like a pretty hypocritical take on things.

After all, whats the difference between a steem whale and an IRL whale? Your take is that a steem whale has his steem stuck in vesting, so he has incentive not to cut and run. But the same could be said of any business owner with a large capital investment. Im sure iun the early days of facebook, mark zuckerberg had a large portion of his personal assets stuck in the company. IM sure in the early days of most large corporations, the founders had most of their assets stuck in capital investments.

If anything, whales here have more liquidity than a typical investor in a large corp. After all, just the founders they have about $3 million in steem that they could sell if they wished. not to mention the ability to power down what about 1 million or two a week?

At the end of the day, youre depending on the wisdom and good intentions of a central authority. Which I thought was kind of the cardinal sin for you people.

Hi Sigmajin, thanks for your reply, I'll try and answer you in order.

First of all, anarchy and capitalism are a perfect marriage, all anarchy means is a society run without centralised orders. Capitalism is one that attempts to manipulate self interest for the greater good of the community.

Anarchy gives a truly free market, so for instance I can go and sell anything anywhere without punitive taxes which favour locals. So by marrying the two philosophies together (anarcho-capitalism) we have a society encouraged to endeavour, without being restricted.

The difference between a whale in this case and a whale who is a major offline company is that they can cut and run by selling. You mention Zuckerberg in the early days of Facebook; you have to remember that Facebook was worth nothing in the early days.

If Facebook had the kind of meteoric rise that Steemit has had, going from $2000 to roughly a $300 million market cap in a couple of months, there would have been nothing stopping Zuckerberg selling all or part of his stake to an interest individual or company.

Plus of course limited liability (an instrument of capitalism) allows major investors to walk away should the business fail whilst in debt, with the company owing millions. So in this case it is the government saying that it will give you instant liquidity, regardless of the state of the company, Ned and Dan do not have that luxury.

Lastly we talk about the founders and their $3 million of Steem I'm not sure where you get these figures; maybe you're talking about their SP?

You can only power down in 104 equal payments; so if they started powering down today, in 12 months time, 50% of their money would still be in the system. They could of course sell their stake to someone, by selling their accounts, however that person would still be tied to the system in the same long term way.

So 1 million a week cannot be powered down, that would imply that the founders had $104 million, which they don't, if they did, I would be a lot richer :-)

Cg

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Revolution indeed , keep spreading the word

Great post dude, i like how you define capitalism&Communism
"Capitalism:Fuck you, pay me.
Communism:Fuck you, I'm getting paid" in both systems somebody gets fucked.

Yup, just different ways to do it :-)

Cg

the whales rule

Thanks for the excellent article! It definitely helped clarify a few questions I've had about how things work here.

Without the ability to immediately dump ones steem power, the "whales" have every incentive to actually help the platform rather than using it to pump and dump assets as is seen so commonly all over the place.

This is the primary reason that I think steemit has serious potential in the long run. Everyone who uses the platform has motivation to see it do well and it becomes hard for anyone (or small wealthy group) to artificially manipulate the price and then pull out immediately for huge profit at everyone elses expense.

That's right, it's a great alternative to the usual scenario where you have to have a lot of trust for a lot of strangers, who can display self interest and ruin the whole system, at the stroke of a key.

Cg

Great post! I was in a very similar Facebook conversation recently and the negative language used against me was surprising.

My summary of this post: Down with the banksters! :)

Excellent post, as always. I love this point:

There will still be advantage and disadvantage, there may even be inequality.

I look at the vast array of varied human ambition and realize there will always be differences between individuals and groups. We can fight this or embrace it and do our best to increase well-being across the board. Our different desires is what allows us to specialize and become experts in our favorite fields. Our differences should be celebrated, IMO. I'm perfectly okay with being "unequal" as long as we're all improving the lives of those around us to create the world we want to live in.

People are often embarrassed of their own self-interest.

Cg

You can say: Capitalism economic model is fine, it's the political model screwed. Yes, in real world democracy is a big fiasco.

You can't separate politics from Capitalism, it is the driving force; without politics you have a model like Steemit, a genuinely free market.

Capitalism is fueled by self-interest, and at once ruined by it; Steem is the answer to that conundrum.

Cg

I totally agree. Economics and politics are complementary of each other. Different from communism (which is a term of both political and economic system), there is a way to disconnect capitalism from the so-called real life democracy and bring the direct democracy, that's Steemit.
I am sorry if my previous comment sounded like a disagreement, in contrary.

The cow anology
Capitalism: "You have two cows. You sell one and buy a bull. Your herd multiplies and the economy grows. You sell them and retire with benefits".
Communism: "You have two cows. The state takes both and gives you some milk".

exactly. and communism is also associated with tyranny, dictatorship and massive oppression of speech rights (among others). I live in a former communist country, I know better the consequences.

Hmm, yes for Communism though I would say you missed out on Capitalism, I would put it more like this:

Capitalism: "You have two cows. You sell one and buy a bull. Your herd multiplies and the economy grows. However the value of your money shrinks, and the amount you need to survive after retirement grows exponentially. You sell them and after punitive taxes retire without benefits, wondering how you were sold such a massive lie".

Not quite as snappy, but you get the point :-)

Cg

No don't worry, I don't mind if you disagree, that is good debate! I just feel that Steemit's vested model of SP gives a much more even playing field.

Cg

I totally agree, again. It's is much more than a social media platform to make some money. You realize this only if you read the posts of @dantheman and the white paper.

TBP :P

this model can be used to completely change advertising forever. I wrote about the theory here and fired the first shot across the bow here.

People who are skeptical of Crypto like to argue by having one set of currency rules for Bitcoin and another for national governments. It's so fucking annoying.

build it and let's spread the news.

Wow, you saw right through this cryptoworld. You realize the "hidden motives", the essence of the new system.

For me this game- steemit-, I call it a game because it's surreal actually (or it feels like an alternate reality), yes, this game is the first solution to an AMAZING paradigm (for games, economics and life). It's called Nash Equilibrium. Briefly, every player maximize his gain without altering the outcome to other players. It's the perfect cooperative solution when everybody wins.

It's utopic, right ?
That's why I call it a game.

Very good post. Thanks.

You made me lose control of my mind man, so much information, just wow and I do appreciate your great work.

☆ The 2008 global banking crisis; or as the bankers called it; another day at the office, ☆
Great line!

Lolz :-)

Cg

Muy Buen Material, Ne gusta su entusiasmo, Ha Provocado lo que Ud. Quería, Como vera existen diferentes tipos de opiniones, que es lo que se busca cuando uno hace una pregunta abierta. Creo que es posible el uso de la criptmoneda Mas alla de los Muros de Steemit.

equality doesn't exist. -Dave

This was a really good article. I enjoyed learning about the backstory.

YES!
This is my FAVORITE article I have yet read in my couple long days of pouring through Steemit!
Thank you so much for writing it as I totally agree and have been pondering this similar conclusion in my own way.
I LOVE the transparency of this platform and even though there IS inequality it a very FAIR inequality of which provides the OPPORTUNITY to progress, evolve, or GAIN STEEM as we might say!
I am so thrilled to have found this community and to be a part of it. I have invested the vast majority of my time over the last couple days learning and integrating my self as much as possible.
The truth is that in life there will always be disagreement, there will always be people with more "money" or "power". This is just the game of life, this is what makes it interesting and challenging and thus provides what we experience as fulfillment or success!
What is so fantastic is that the "rules" of which this platform is built upon provide a truly voluntarist and accountable opportunity for us all to interface with and ultimately the results will be "fair" to what we put in. Meaning we will be compensated for our contributions in a transparent way giving everyone the opportunity to succeed if competently engaged.
I could write so much more but mostly wanted to say how much I agree and thanks for all you have contributed to make Steemit what it is. If you want to read the article I wrote on why I think Steemit is REVOLUTIONARY I would be honored!
Best Regards~
https://steemit.com/revolution/@quinneaker/why-steemit-is-so-important-and-even-revolutionary

Wonderful peace Crypto! Thanks for contributing, I'll definitely be sharing it with people.

Speechless... :D

dam man this article be like whoaaa . great read thank you :) definitely agree with you

Perhaps you can't call it anarchy, but in my mind it's the closest we've managed in setting up a true anarchistic system. The DAO tried, but without human emotion, it won't succeed in that; something else perhaps...

The ultimate connection with anarchy is that, the pre-mine allowed the distribution of coin via the website, in a meaningful way, without heavily biasing the most powerful.

It may feel like they have lots of power, however their power is locked into the system, this gives us a closer model to anarchocapitalism, whereby the market truly is free.

Cg

It would be biased towards the miners who have the technical knowledge needed to mine cryptocurrency, steemit lets the average person 'mine' by blogging .