My understanding is that you think (reasonably so) that Steem is primarily about audiences financially supporting content producers. The case I have recently been trying to make both in this post: Steem is not Facebook, It's LinkedIn! and in this comment area is that if you think carefully, Steem is not really capable of doing that.
The reason I feel this way is not because I want it to not be able to do it, I just think, pragmatically, that it can't work.
If I have somehow confused you, perhaps in some way I got confused about what you are saying. Please forgive for any error on my part if so. I suppose I should have put your comments in quotes and addressed then directly so that you understood what I was getting at.
Allow me to summarize key points of our conversation:
Me: "I believe it is much more suited to professional content producers, artists and niche communities"
You: "No point if there are no content consumers. ... 15-30 SP is more than enough to get readers started."
Me: "it seems like the obvious design is for content consumers to upvote quality content. The problem with that is inadequate incentives to buy a ton of STEEM, ... However, when you take a look at everything Steem offers to professional content producers, you realize that there are big incentives for these content producers to power up their SP a lot. Improved SEO, a reward system for their audiences and delegation-based subscriptions for VIP audiences.
At this point in the conversation it is my understanding that you believe small SP holders can cumulatively support (financially via upvotes) content producers. The logic being that 2000-10,000 15 SP holders upvoting on a daily basis leads to a sustainable income for content producers.
My argument there was that it cannot do it unless you are at true celebrity status, like Jennifer Lopez level. Also, I claim that the incentive is just not there for content consumers. Anything on the Steem blockchain is readily accessible to the online community, so they don't need to spend money to consume, just to upvote and comment. The curation reward is essentially worthless to a 15-30 SP holder.
You: "I disagree that is a problem in itself. A content producer usually monetizes off thousands of readers, not 10 or 20. If you get thousands of 15SP upvotes, it will be meaningul"
Here you disagree with my point and off I go to find my calculator...
You again: "Take a few different projects for readers and partner them up to share their content consumers between themseves, offer rewards for commenting through the chain, list comments through the api but skipping blacklisted accounts (i.e. spam and bots) and offer rewards for engaging, like upvotes or lotteries. Bam."
This is actually really good ideas and I feel bad that my reply did not take the time to acknowledge them. Sometimes, people just steamroll over good ideas to keep making their point. My bad.
This is valuable and good strategies for business. However, it kind of is the same thing I said. You're talking about a top-down approach, which is the point I was making. Rewarding content consumers by upvoting them, having lotteries and the like is the top-down value add I mentioned for content producers and incentivizes them to buy and hold SP. However, where is the content consumer's incentive to hold large sums of SP? Getting upvotes and potential lottery rewards from content producers?
The problem is that it still suggests the content producer needs to have a lot more SP than his average consumer. Who cares about $0.01 rewards? $5 though, now that's worthwhile to visit a content producer daily. So, again, Steem's investors need to realize that content producers are still their key customer in order to spread adoption. Also, in this model, the content producer makes a little money off their 15-30ish SP consumers, and they make a little money off curation when upvoting comments, but they still need to make the majority of their income from selling something.
continuing with convo-summary:
Me: "... when you calculate STEEM value, inflation rate/reward pool and compare it to 3650 upvotes per person per year, you still don't get a 15 SP upvote worth $0.01 even if STEEM was worth $10. The price of STEEM would have to be around $35, assuming a 360,000,000 supply and a 7.5% inflation rate for that year. So, until STEEM gets up there in the $35+ range any account with 15 SP is just upvoting with dust."
Because my understanding was that you were making the case that the average content consumer would have 15-30 SP or so, that it would be worth it to them to hold that much SP, and they would care to upvote content producers regularly, I jumped into the math to point out that I believe it can't work.
My first argument was that as the price of STEEM goes up, yes, that 15 SP becomes stronger too and gains in the monetary value it adds to both the content producer and the content consumer. However, there are two issues here, one being that STEEM price has gone up, making it more expensive to become a 15 SP holder and thus reducing of the incentive to be one for many people.
The second point I was trying to make is that as more people power up SP the less valuable that individual's 15 SP becomes. Its like this, in a democratic republic of 500,000 people, 15 votes is more significant than it is in a population of 50,000,000. This becomes extremely true and obvious in a profit sharing environment such as Steem or MakerDAO. The correlation this has to our conversation is that incentive minus point #1 & point #2 = 0.
Now, to finish the mathematical equation we add Youtube likes vs. views statistics and we get to into the negative. There are usually far more viewers than their are active participants liking or disliking the content. This is bad news for Steem users, because we have finite upvotes per day, which means not only are we likely to imitate Youtubers in being lazy, but also stingy.
*You: "You lost me somewhere. It looks like we're on different conversation topics. I've been talking about unexplored business models"
I'm not sure how I lost you. I believe the issue is that you did not feel strongly on the 15 SP point and were just throwing it out there. I would like to counter that we still have an incentive model issue regardless. If we raise the rate from 15 SP to 100 SP, content producers, in the future, will profit more for sure. The issue is the incentive for content consumers remains not there, because of price vs. reward. A $10 STEEM price means $1000 investment, which is a hard sell for a content producer to pitch to a content consumer.
I think we might actually agree to some degree, because I've seen some stuff from you that suggests you do. For example, you're talking about businesses incentivizing consumers to buy and hold SP. Well, that's essentially what I am saying too, but that Steem's current hodlers need to realize that our true clientele are content producers. They are the ones with the incentive to buy $1000 worth of STEEM or more.
Content producers, online shops and other businesses over time will on-board content consumers, but they will have to provide enough value to drive the content consumers to join. Curation rewards are just not enough, and the content is free to view. So, delegation-based VIP access is one way, promising free stuff like upvotes to great comments is another. Its still a top-down distribution model, all beginning with businesses first, not consumers and socializers.
Top-down is viable. Content producers can reward engagement with $0.02+ upvotes. Combined with ease of spending, this can be very attractive. I.e. gamers + gaming blog + dgameland. Producers also get 25% back through curation rewards. This is just an example.
Honestly, I don't think STEEM will ever be worth this much. The only time this happened was because of a pump & dump manipulation exploit abused by a whale that thas since been fixed.
Well, I definitely believe STEEM is going to be worth a lot. The only danger is something else will come to rival it, like Facebook did with MySpace. Otherwise, I think Steem will eventually hit $500-$1000. Big numbers, I know, but all we need for that to happen is the wordpress community to embrace it. 5,000,000+ downloads of Steempress and then big corporations will embrace it, a Steem ad market will grow and the whole thing will explode.
What sold me on Steem was its SEO value. I realized its poised for rapid growth on the web. I believe in Ethereum's Web 3, but its going to take time and be a struggle to transfer the whole web over to Ethereum's blockchain, and I bet some of the web will never convert. But Steem on the other hand, it can easily spread throughout the web like a fire.
I can't agree with you. If it is ever worth this much, everyone's existing steem power will also upvote for a lot. They're going to sell and the price is going to drop back down. I believe STEEM will become somewhat stable, and that it won't ever go past $1 for long.