Why I Am So Optimistic About The STEEM Blockchain
It is no secret that I believe STEEM is going to be one of the leading blockchains going forward. There is some fundamental reasoning for this.
When looking at blockchians and what is taking place, it is important, in my view, to understand some of the capabilities that will make it attractive to users. This can often be hard to see initially because users are satisfied in a round about way.
I think it important to use a bottom up approach when analyzing this.
Blockchain
We start by realizing this is a Graphene based blockchain developed by @dan Larimer. This provides tremendous capabilities over the previous versions of blockchain, most notably, the number of transactions per second that can be handled. We see extreme scaling problems with Bitcoin and Ethereum at the moment. No such problems exist with STEEM, at least at the blockchain level.
It is crucial to have a solid foundation and this is what STEEM has. Hence, this is not a dirt road with potholes but the Autobahn.
Infrastructure
Having the greatest blockchain in the world would mean little if it is being run in conjunction with a bunch of 486s.
The Steemit development team is dedicating a lot of attention to making sure the infrastructure matches the abilities of the blockchain. There are a lot of variables that go into this including how memory is used and how particular software loads. I will not go into most of is since, quite honestly, I don't understand the Xs and Os. However, with the different posts the development team put out, I was able to garner enough feedback to realize they are on the right path.
Hivemind
This is something we do not have today but it in the works. It is going to be a very important component for STEEM.
WIthout going into too many details., it is a layer that is being added which will tie into the communities feature. This allows for developers to determine the level of decentralization they want to embrace. For example, with communities, adding and deleting moderators is something that will be possible. It is Hivemind which will allow that. Information such as this will not be posted to the blockchain yet there will be syncing between the two.
Hivemind will also extend outside STEEM. From what I understand, this layer will blanket the entire Internet meaning that any site can take advantage of this.
Applications
At the end of the day, the average users cares nothing about what I wrote so far. His or her interest lies simply in the applications being used. That is what attracts people and retains them.
Think about it, do you care about the technical basics when you go to a website? Most of us do not. We log on with the expectation the site will work. If it is flawless, we notice nothing. It is only when something goes wrong that people start to question.
STEEM is not being designed, at this point, with the user in mind. They are not on the radar of the development team. Instead, their focus is upon developers. That is what they are wanting to attract. Having a blockchain that is friendly to the developers mean more will start hacking away at code and hanging applications on here. The Ruby project is an example of this.
Over a 6 week period, we went from 350 applications listed on the app page to over 400. I have not looked recently but that is quite a jump. This is the real value of what is taking place.
We all get excited about the prospects of some of the applications that are evolving before our eyes. @dtube just had a major update. @dlive is streaming ahead (pun intended). @steemhunt came online like a house on fire and hasn't let up. @busy.org is seeking to become a multi-chain application that takes on Whatsapp or Snapchat. @actifit is seeking to become the largest fitness tracker that pays people for moving around.
Ultimately, we are seeing the beginning stages of Web 3.0. For this to evolve, it is going to require the users onboard. That will take some time but it is the applications developed that will attract people. We are seeing the foundation placed with STEEM.
This is why I am so optimistic about STEEM. It did not lose it early adopter advantage. In many ways, STEEM is ahead of the pack. A lot of time and effort went into us getting where we are. From my perspective, things seem to be snowballing. We are seeing production of applications increasing.
Try to keep this in mind when you find the FUD is getting a bit much. Look at what is taking place instead of the conjecture of the media or the pricing action of the casino. This is what will, ultimately, tell the true story. Too many people are looking for the house when the concrete foundation is being poured. Obviously, when doing this, the house is not seen.
This is what people do with STEEM. They are looking for the end product when the foundation is not in place yet.
I guess you could say we are not even to the point of being a ground-floor opportunity.
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How can you explain the diluting action(the dilution of coin) done by steem blockchain
So every currency has an inflation. When they print more US dollars, where does it go? To the bankers! To the richest bankers so that they can loan it out and make/create even more money.
On steem, most of this inflation rate is distributed, through the reward pool, by consensus. This is a revolutionary new system where we choose where to distribute the inflation rate dynamically.
Let that sink in! This changes everything, and is one of my favorite parts of steem, the revolutionary currency that also happens to be a technological powerhouse.
Not ever to be a naysayer, but since reward pool distribution is stake-weighted, it is still going to the richest to distribute as they see fit... Hopefully the current richest will see fit to distribute it more broadly so that it becomes a more equal potential distribution. We'll see! I'm certainly not naysaying the potential.
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You are absolutely correct here. But this still beats the current system by orders of magnitude. First, they do not lend it (to us) into creation, they are strictly using stake for a consensus based distribution. And second, the richest can only distrubute based on their stake.
Now, this is a little different from what you said, and again, revolutionary.
Currently, those with the most power distrubute 100%. Because they have the most power, and they defend those rights with laws and armies and treaties and spaceships. On steem, every single user, down to 1 sp, gets to voice their vote and have an actual say about how that small percentage of the reward pool gets distributed. It is not just up to the richest, every SP counts. Unlike in some other voting systems we may know about ;p
Yes, better. Though not revolutionary, I'd say, unfortunately, but better within the confines of digital capitalism.
Also, because of the dust rule, tiny sp holders don't get as much freedom of choice if they want their vote to count for anything.
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Good point on the dust rule. That is an aspect that was new to me, and is now changing with the next HardFork, if it goes through. There will now be a threshhold for the vote to count for anything (I am unclear if that will be at 5 SP x 100 VP or another number) above which 100% will pay out and below which it will be a zero value vote.
And won't count against voting power? Also, will it still count on a larger value post?
I am not sure about voting power, but I'm not sure what use voting power (which seems like they are renaming to voting mana) is for a zero value vote.
My understanding of the HF20 post was that it will have zero value until you get a certain amount of steem. So it will be a 'smoother' experience, letting you vote like on facebook when you are under the threshold, and thus only users with more SP will think about value and voting 'mana' and whatnot. Not sure what the cut off is, I think its pretty low (~5sp x 100%) but need to confirm.
I couldnt agree more.
Under the present system, inflation goes to the banks and is issued out to the public as debt.
On STEEM the inflation goes in the hands of the public from the get go.
the one problem I see, is that central banks print more money in times when the general inflation is low and they stop printing money (increase interest rates) when the price inflation is high. With STEEM, we have huge price inflation (steem currency weakening) and the system is still printing money, while a reasonable system would instead burn money at such time.
Well, I do have a couple of thoughts. First, inflation is set to lower every year. Now, the crypto markets move so fast that you might think that yearly is not enough. The thing is you can't mess with inflation on any faster basis, since that is the reward pool, so...burning.
There is a lot of burning! Promoting your post requires sending payment to @null, who burns the payment! But very few use that....
Currently the HF20 has some new burning invoked! Each new account will have their account creation fee (.1 steem) burnt! They will still get bandwidth credit for it, but they will burn steem for every new account created. This is very exciting, especially because of what you said! This is a very strong sign for the price in the future, as long as we can continue to onboard new users, which should get much easier with HF20.
What do you think?
I am not sure what you mean
Do you mean the inflation with the creation of Steem? (About 8 percent per annum, I think, and slowly decreasing.) Or is there a dilution effect with the new applications developers create?
No, the new apps are filling in slack now, and as we get more and more the whole system will expand with rising prices (to the benefit of everyone) to fit any number of projects. I expand a bit on this in my answer to your other comment.
I believe he was referring to the inflation rate, and I share my thoughts in a direct answer to his comment.
I'm certainly hoping you're right.. I just invested a bunch in STEEM
Steem's price below a dollar is a bargain!
Can it get any lower than this? :)
There is strong historical resistance at 89c, let's wait and see!
Holy cow 90 cent Steem, yes please!
WE are close! It seems sticky in the low nineties!
This might be the last time we see steem at this price levels.
Hey I really think so. All the cryptos are in the final crash before mass adoption. In 2000 we had the same dot.com crash and people actually said that that internet fad was dead!
Dont know about you but i am buying this dip.
Yes! I wish I could buy more, but I am putting in what I can and am happy to do it at these prices!
Somebody can tell me please how this modifies the rewards pool? Or how the new applications are influencing the distribution of Steem? Or link me a post about it? Thanks
Hi deathcross, I touched a bit on your other comment before I saw this one. Let me try to explain, feel free to turn this into a conversation.
Currently there is a lot of slack in the system, but basically all the steem power can be used, by voting, to help distribute the reward pool through consensus.
New apps that get delegations are just moving the same sp around, helping to decide who should get what part of the rewards pool.
As more users and more apps demand steem to increase their stake, a constant but more valuable rewards pool will continue to be distributed by the same mechanism, consensus (through voting).
Have I made sense here? Perhaps a followup question from you will help me :)
Does that mean that new apps do need always delegated steem power to reward users?
Slack means unused Steem Power? The reward pool is totally distributed everytime, I suppose.
Offer and demand, bid and ask. If more people changes fiat (or other cryptos) to Steem, price goes up. If more people are selling Steem, Steem price goes down. (Supposing near-constant Steem amount, in short term.)
Other question is if I ll become the same amount of Steem (Steem power/SBD/Vest) for the same post in future, as reward, or less.
Hey these are great questions, lets take them one at a time.
Yes, no, maybe! These projects should also be powering up, and if new projects get investors or other supporters, funds should be used to 'stake' a place on the blockchain, by buying steem and powering it up! Currently the slack, which we will talk about in a bit, is held by certain early investors and Steemit inc, so they delegate it out to support these projects. But as we start snowballing they will do that relatively less and less and start slowly selling it into the market (just my thoughts/opinions)
Unused steem power, yes! So over the last years, through these delegations, we have gradually seen more steem power voting. This goes to distribute a (ceterus paribus, supposing all else being equal) constant rewards pool, as you said.
There are a whole bunch of variables! But, ceterus paribus, you will get the same reward, in steem at the new evaluation based on market price. So that is assuming that the amount of steem power voting, and the rewards pool being distributed is the same, and only the market price has changed. In reality, the rewards pool fluctuates (inflation rate is falling, though stock is increasing due to inflation) and the amount of SP voting at any one time fluctuates as well.
The entire rewards pool is distributed, right? It's just that some of the sp isn't being used to distribute it, so everyone else's sp is more influential, right?
I had no idea you were so well versed in the nitty gritty of steem!
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That's exactly right. When they don't vote with it, we become relatively more powerful in regards to distribution of the 'constant' rewards pool.
Like punning, I find that with dedication and practice I keep learning more each day! I also like sharing what I've learned openly, so that anyone can correct mistakes I may make, which has happened before and also helps me learn that much faster. These types of posts are good for that.
Very important, though, be careful listening to people who correct you. More than once, I have discovered people confidently asserting things that weren't correct. Math can confuse people into confidence.
Oh man that is so true, it makes me make many faces. I try to cross reference though, and pass on my studies to others who maybe don't get a chance to read as much.
People, new investers and newcomers to crypto should really grasp that you wont be buying parts of a socialmedia platrom, you are not buying steemit, your are buying STEEM!
Im still never ending learning in what this means, its taking time to sink in. Just like eos and most likely bitshares in the future.. Its all mastermind stuff, and so well though out. Is @dan a humanoid with some kind of quantum brain ?!
What can you buy for 1 usd that will be worth at least 5 usd at Christmas, not to mention a generous interest rate for leasing it out until then !?!
Just think of Steemit as your wallet ,where you can interact with freaks and freethinkers, and read crazy shit that wouldn't ever make the 6'oclock news on your TV (for now) :)
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Very interesting @taskmaster4450 I feel totally lost sometimes trying to understand what's happening behind the scenes (I'm not even remotely close to being a coder) so thanks for breaking it down a bit. I too believe we are on the cusp of something huge and am excited to see where this crazy thing goes
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Hoping your right! We all just gotta keep posting and using as usual!
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Very interesting post, I feel the same way.. And for that reason, although starting from today I'm on vacation, I'm continuing to post and comment rather than do what some other authors do, I mean ease up on the reins a bit and wait for better times.
Your post deserve a resteem!