There is a lot of talk about people powering down. There are many seeing it as a signal that there is something wrong with STEEM. Some see it as a reason to get out of STEEM. Since the prices have tanked again, this kind of thinking is easy to buy into. The prices are down. People are powering down. This really should be a negative sign.... right?

Always dig deep. Read the whitepapers. Check out GitHub. Read their official blog and try the Reddit community. Maybe join Discord or Telegram. You can actually get o the bottom of things simply by spending 30 minutes. I don't think that is a big enough time to make a decision that could have a significant impact o your life.

Economic Status

I'm still not an expert on the STEEM blockchain. So feel free to correct these numbers in the comments if theyy are inaccurate.

• Whale: 500,000+ SP
• Orca/Shark: 50,000+ SP
• Dolphin: 5000+ SP
• Minnow: 500+ SP
• Red Fish/Plankton: Below 500 SP

The real numbers should be based on VESTS. But these numbers are close to the actual numbers.

The Ninja Mine

A large portion of the STEEM supply was mined before most of us got here. When I joined a year ago I was the 258,740th account. The PoW phase had ended a long while ago and I assume there were only few thousand accounts that were mining STEEM. Most of this mined coins went to Steemit,Inc @dan @ned and few others. This is a terrible initial distribution of a coin.

This must be fixed and the only way to do it is through powering down large accounts. @grumpycat and @madpuppy accounts claimed to have bought their massive stake and after some arbitrary policing failed, The accounts have mostly powered down and left. @transisto who tried less severe arbitrary policing has also stopped and if I remember correctly @promobot is owned by him.

I think having to purchase the stake had an impact on these decisions. When the stake was simply mined, the cost of acquiring it was very low. Therefore it is less likely to be used thoughtfully and intelligently. It is good to have people who bought their stake, It's best to have people who earned their stake.

It All Leads To More Decentralization

Maybe some of that funds are going into alternative accounts. But it's fair to assume that at least half of it is going to be sold on the market. Take a look at the Top 10 largest power downs going on at the moment.

These are some huge accounts. The median household wealth of USSA generally gets to be reported around 60,000 USD. It's fair to assume that these people are fairly well off to have this kind of money as an investment. The 500th highest SP account has 26,114 SP and 1,837 SBD

The accounts with over 26,114 SP are collectively powering down 652,239 SP which small time investors can buy. Can you really tell me that that isn't great. let's look even deeper with the help of @arcange who post regular statistics.__

Keep looking up and down. A little over 2000 accounts practically owns STEEM blockchain. There is nothing inherently wrong with this kind of inequality. I'm all for inequality. But do not have the nerve to tell me that any of these big accounts powering down is a bad thing.

The Benefits of Upper Middle Class (Dolphins)

Think of the IRL Upper Middle Class. You have doctors, engineers, lawyers, managers, models, B-list celebrities etc. Great countries have more of these kinds of people. that's not because there is anything good about wealth redistribution. It's more of a matter of rewarding those who are part of the economy. No matter how rich you are, there is only so much food yo can eat and clothes you can wear and celebrations you can do without being an idiot who waste capital. Upper Middle Class consume lots of luxuries and this have an economic impact.

Now let's go for a company with strong middle management. The company can interview and hire more people into the system more efficiently. If the CEO has to do all the recruiting, things are going to kind of lag behind and suck. At the current rate a bottom tier dolphin can give about a 50 cent upvote. 10 of these is 5 bucks which is a nice amount especially for a newcomer. A whale could give 50 USD upvote but a whale can consume only so much content. So the dolphin population makes STEEM a more vibrant place. The rewards they can give isn't large. But they are more frequent.

In my Dlike Improvement Proposal I talked about the ways their reward structure could be improved. Having more whales or at least higher level minnows allows the content creators to be better rewarded.

No More SBD (For A While)

You've probably even noticed that by now. That's because STEEM marketcap is less than 20 times the SBD supply. The printing rate would start when the marketcap is back at 312 million USD and get to the 100% SBD rewards when the marketcap is over 780 million USD which is close to $3 STEEM price. But there is some additional hope if the prices don't get back up soon.

In Hardfork 14, rules were added to reduce the SBD print rate when the “debt ratio” (amount of SBD tokens in existence / the STEEM market cap) was above a certain percent.

Under the new rules, SBD tokens will continue to be printed unless/until the debt ratio reaches 9% of the STEEM market cap. Between 9% and 10%, liquid payouts will shift linearly from paying 100% SBD and 0% STEEM at 9%, to paying 0% SBD and 100% STEEM at 10%. This works the same as the shift that occurs today between 2% and 5%.

Happy Steeming! Invest Smart!