RE: Steem 2020 - Reducing Inflation To Less Than 2% APR

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RE: Steem 2020 - Reducing Inflation To Less Than 2% APR

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taskmaster4450 in #steem • 6 years ago

One of the biggest turn-offs for people wanting to invest in Steem is the high inflation rate..

I think this is a presumption that is not valid and is far from being proven. The fact that Steem is not well known could have a lot more to do with the lack of investment than the inflation rate.

You are trying to draw conclusions about what markets do which is impossible. They are their own animal. And it is very dangerous for one to initiate fundamental changes in the ecosystem based upon market action.

Would you rather have the majority of your stake in a currency like STEEM, which is losing a guaranteed amount of ~7.5% in 2020? Or, would you rather own BTC, which will have less than 2% inflation in 2020.

Once again, you are saying the barometer people are using in buying these tokens is the inflation rate. It might be in a few instances but most buyers do not know what the inflation rate is. Do you think most Ethereum buyers realize the inflation rate there is potentially unlimited? Yet it is a top 5 token.

In you scenario, if one thought BTC was going to 100X and STEEM 500X, which do you think would be preferred? Do you think the inflation rate would even matter in that instance?

6 years ago in #steem by taskmaster4450

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therealwolf 6 years ago (edited)

I think this is a presumption that is not valid and is far from being proven. The fact that Steem is not well known could have a lot more to do with the lack of investment than the inflation rate.

Steem has been the TOP 3 ranked cryptocurrency at one point. Clearly, Steem should be very well known by now. And I would even argue that most people heard about it. (at least those that were around in that timeframe)

Once again, you are saying the barometer people are using in buying these tokens is the inflation rate. It might be in a few instances but most buyers do not know what the inflation rate is. Do you think most Ethereum buyers realize the inflation rate there is potentially unlimited? Yet it is a top 5 token.

I didn't say that inflation rate is everything that matters, but it's clearly one thing investors look at if a specific coin has investment potential. I could give you the example of BNB, which has a deflationary model. Let me quote:

To achieve scarcity, Binance uses 20% of its quarterly profits to buy back and destroy (“burn”) BNB tokens up until 100 million BNB tokens have been burned. This deflationary supply mechanism naturally increases the value of the token. Source

In you scenario, if one thought BTC was going to 100X and STEEM 500X, which do you think would be preferred? Do you think the inflation rate would even matter in that instance?

What kind of question is that? The chance of STEEM going to 1 cent is far higher than BTC going to 250$. So even if I would think STEEM could go higher, the risk is far bigger to invest in STEEM than in BTC.

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taskmaster4450 6 years ago

Steem has been the TOP 3 ranked cryptocurrency at one point. Clearly, Steem should be very well known by now. And I would even argue that most people heard about it. (at least those that were around in that timeframe)

That is not an inflation problem but a marketing one. That has nothing to do with the inflation rate.

You want to point to that as one of the causes, I think it means little. Perhaps the slow sign up time, Whales acting like children, and a distribution that man consider unfair has more to do with it.

So even if I would think STEEM could go higher, the risk is far bigger to invest in STEEM than in BTC.

Risk is something that certainly investors look at. In fact, it is a more crucial level than the inflation rate.

Of course this is all off topic:

Answer me two thingL

A) Do you think that an inflation rate of 2% would have STEEM in the top 10?
B) Why are you concerned with it?

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therealwolf 6 years ago

Feel free to concern yourself with marketing Steem. This post is about the future of Steem, once SMTs are around.

And it seems you're not getting the point of this post. Reducing the inflation rate to 2% won't be the cause for Steem to get into a better ranking, but actually, the combination of everything combined; SMTs & reduced inflation. And having a base currency, which is handing out tokens, instead of focusing and supporting the sub-tokens (SMTs), isn't effective. There is actually no need to have inflation to non-stakeholders (besides witnesses) on STEEM, once SMTs are there.

If you don't think that, give me reasons & evidence why not.

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chrisrice 6 years ago

I agree with @taskmaster4450 and I personally think the original post offers bad ideas but I will not dig too deep into it since I am spending most of my time on other things.

@taskmaster4450 has done a good job at pointing out the flaws and blinds spots in your arguments @therealwolf.

When I told a serious investor about Steem he barely knew about it and asked his cousin who invested heavily in crypto and ETH about Steem who replied that Steem was bad based on it's inflation rate of 100% 😂 (this coming from a big investor).

You might want to check your sources in regards to the market's perception of Steem @therealwolf.

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accelerator 6 years ago

You have not given any evidence that inflation is not needed. So, how do SMTs fund each dapp? Do a simulation of cause and effect and feedback.

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ackza 6 years ago

Yup, inflation isnt our problem, its just a klack of marketing and onboarding thats all. inflation based rewards is what makes steem fun ... people were buying at $8 and peopel WILl keep buying we just have to have steems users themselves get rewarded to promo

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