A really well thought out article. The main issue is that the majority of whales are free riders who rarely vote and are powering down. Some whales are really active and doing their best to promote a diverse set of content and actively grow Steemit.
But really most of the mining whales made several hundred thousand dollars over the course of a couple of months... why wouldn't they power down?
This has the potential to spiral down into a tragedy of the commons scenario.
Alternatively the price shouldn't have spiked as high as it did and it will reach a bottom at some point where the parties involved have a longer term 'vested' interest and the power is distributed to more active stakeholders.
The issue you describe with free riding whales who are powering down is only a short term issue in my opinion. In the long term, if speculation on the value of the currency is the only reason people spend USD to get Steem, then the whole thing will come crumbling down because of the free riding whales you describe. If on the other hand there is real business value in buying Steem and powering up, then the platform should be highly successful.
It comes down to the mechanics of powering down, when you power down, you power down vests not steem power. As we're in a distribution phase the amount of steem power will approximately triple in the next 12 months. So liquid steem released will increase after each power down.
I think we're on the same page with regard to the future though . https://steemit.com/steemit/@wingz/building-the-economic-system-digging-deeper-into-steem-part-2
I can only hope that the debt to equity ratio doesn't get out of control before demand for the steem dollar is increased externally.
What do you mean that "you power down vests not steem power?" Steem Power is denominated in steem. When someone powers down, that steem goes into the liquid market, right? Am I missing something?
I'm adding your article to my reading list.
Check out your Vests on www.steemd.com
When you initiate a power down you get your vests in 104 weekly payments. During this time due to the allocation of 9/10 SP to holders the weekly payment you receive in Steem will go up.
Where do I go on www.steemd.com to look up my vests?
Also, what exactly is a vest? This definition doesn't make sense to me with what you are saying...
"Steem Power: This is also known as “vesting steem” (or VESTS), 50% of all content and curation rewards are paid out as Steem Power. This is an illiquid balance that can only be converted into STEEM over a 104 week period after you power it down. Steem power is important, because it gives you the “voting weight” of your up and down votes. It isn’t easy to earn, and is expensive to buy in large quantity. This is why many people let this balance grow (with vests) over time.
Every day new STEEM is created. Up to 90% of newly created STEEM gets distributed to accounts who already hold Steem Power. Think of it like compounded interest. The system especially rewards those who vest in the system over the long term."
https://steemit.com/steemit/@intelliguy/steemit-glossary-quick-reference-to-important-words-and-resources
to see your profile on steemd just change steemit in your profile link to steemd.
https://steemit.com/@nathanbrown
https://steemd.com/@nathanbrown
Thank you, I just checked out my profile on Steemd.com:
https://steemd.com/@nathanbrown
I'm still not understanding the difference between vests and Steem Power, and I'm actually more confused now. My profile shows I have .23m vests (what is the m?) and that I have 0 Steem. This makes no sense to me as I know I have some Steem as Steem Power. Is this referring to liquid Steem?
I'll admit that I don't have a strong understanding of the infrastructure here. From what I've gleaned in reading various posts, it would seem to me that the free riders have created an inflated view of the platform. Once they have powered down and are out of the picture, then the true platform will be revealed?