Conversely, passive investors contribute little to the actual ecosystem and perhaps shouldn't be rewarded. In fact, perhaps passive investors and holders of the currency should simply sell off now.
I mean right now might be the best chance they get to secure a relatively respectable ROI if the price continues to decline. Certainly they aren't really helping to make the ecosystem a better place. The activity level seems more correlated with the price than ever before.
One of the benefits of a massive selloff and crash would allow for the redistribution of wealth to new individuals and potentially folks that actually care about the ecosystem than people that want to milk it.
Looking to cater to those seeking riches simply degrades the quality of product. I want Steem to become less profitable so the investors and wannabe entrepreneurs look somewhere else to make their quick buck and advertise because that's simply garbage content and my list of interesting authors is shrinking rather quickly.
Those people are leaving and this place will be a barren wasteland without them to prop up the value proposition of the platform. Banks and financial institutions won't really mean anything on a blockchain filled with spam and other unappealing ugliness.
I would like for you to imagine what I'm writing as if I'm doing so with a smile, because everyone who knows me, knows I'm a friendly guy. But I suspect you may have not thought about what a passive investor is in its entirety.
This worries me, it worries me because it seems to imply that passive investors have never been a part of an economic system. This, is very far from the way markets work and I'm not exclusively talking about cryptocurrencies at the moment.
I apologize for the length of what I'm about to write, but I hope that it reaches you, I seriously do.
Here we are, enjoying a technology built on the backs of "passive investors"
Example.-
I'm a brand new company, I have this idea to create a new cell phone that is going to revolutionize the way cellphones operate in the world. I have everything I need except for funding.
I've incorporated myself, I got a team ready to make things happen but lack the funds - What do I do?
Solution! - GO PUBLIC!
That's right, we go public and create 1000 Shares of the company (unrealistic numbers aside, this is just an example) - I hire a company to come evaluate my idea and determine what the initial price to market would be. Its decided it will be $5 USD per share, making my potential capitalization $5000 USD.
I release to public sale half the shares, keeping 500 shares for my company. The 500 shares enter the market, investors and speculators (different types) buy my Stock and the speculators raise the price of the stock thru simple market dynamics to $10 dollars a share.
As a company I still have 500 shares, but my shares have all of the sudden doubled in value as it would be simple for me to sell them to the speculative market and cash them out. Thus giving me the money I need for R&D.
Pooooof - money from thin air
A system of trust is established, the shares are only worth anything because there are investors who are willing to hold passively (not sell easily) in wait for a higher valuation and the speculative market is reacting to the scarcity of the resource.
Do you see how both elements must exist in order for the market dynamics to fully work?
In other words, the iphone or android phone you have in your pocket was built, came into existence because passive investors exist.
Steem is no different
We don't like to think of cryptos as stock because we are refugees of an economy that failed us (add violin sounds) but the dynamics of the market play within the same dynamics.
So, if the whole market is speculators and no investors, there is no floor valuation, the price plummets. If there is no speculators, then the price does not rise. Both are needed, both need to operate.
Regarding content
I think people conflate two things.
If that was the case, we would have facebook whales too.
What content is supposed to do, its supposed to encourage interaction, its supposed to create an environment that is desirable. Hence the reason why spam is toxic, because it does the complete opposite.
So yes, I grant you this much.
Terrible content does hurt the value of the blockchain, but only in the sense that it will reduce the amount of participants and this would indicate investors this is not a good place in invest in.
But it most follow that logical order.
I agree about the statement about content, and the role investors play, but I believe @greer184 is talking about one specific difference:
(emphasis on "shouldn't be rewarded"). Passive investors should care about fundamentals of long term holds, and not on what equate to dividends (and insane dividends, if we're talking about the amount of STEEM that trickles back out to them). I don't have the numbers, but I believe there's nothing like it, and one should be very skeptical about whether the platform holds enough value to justify what is being given to the current passive investors, who either self vote optimally or delegate to bid bots instead of allocating their stake for platform-benefitting initiatives. (Yeah okay, bid bots provide some value, but what it pays out is simply not justified compared to what value it brings-- my opinion of course).
Frustration with this point I believe led to the second comment about "they should just get the hell out". Viewed from this lens, passive investors are freeloading off those that are building true value into the platform. But not just from token value (which is normal), but from what I am calling "double dipping" into returns that are not justified.
The main point I need to bring up in your analogy with companies going public is precisely this separation of token investing and platform participation. Sure, they can do both, but they should be treated separately.
Good Point Eon, I guess the reason why It's probably a little different in the cryptosphere is because they are currently unregulated markets of high risk.
So you can't cover your position. You can buy into Steem and buy an option to leverage in case it fails.
However, maybe that's just because its still early in the game, and nothing more.
In terms of economics, the necessity of passive investors to hold up the price and potentially increase is true. I don't disagree with that. Your market dynamics are correct, but I'm not sure if Steem is built in such a way that it can sustain long-term success or sustainability.
But that being said, I've stopped caring about the money aspect for a while and have looking at different representational values (non-monetary) that the token holds and I'm interested in how this whole thing turns out. I can't say I'm terribly confident in the long-term monetary value of token given the lack of attention and passion towards content I see (on average).
But as mentioned above, I don't mind the bear market. It gives an opportunity to reflect and try out some new ideas and perhaps pivot to an ecosystem that cares about content and community over money and ROI. Granted people will always care about the latter, but maybe we can find a better balance when Steem isn't worth anything at all.