Some Possibly Sacrilegious Thoughts About "Investors" and Steemit

in #steemit6 years ago

I might effectively be committing "Steemicide" in a public forum here, but I keep thinking about the ongoing debates about "what's good" for Steemit and the future... and how the discussion inevitably turns to "investors."

I was reading @themarkymark's post asking "What is the Number One Change Needed for Steem" and aside from posting my own answer (you'll have to go THERE and read it!) I was reading through all the comments.

Rainbow
Is there GOLD at the end of the rainbow?

Inevitably, "Investors," Again...

Now don't get me wrong, I believe investors are extremely important to Steem (and Steemit even), but I think a lot of people miss the whole point of "investing" in their attempts to ascertain what's best for Steem.

Poppies
California Poppies

What IS Investing, exactly?

Well, it's putting your resources into "something" with the expectation of realizing a gain. 

That's it, plain and simple.

Which is really not rocket science.

Now, anyone who has been around "investing" for any period of time — stocks, bonds, real estate, precious metals, commodities — will tell you that the bulk of investment returns (with a couple of exceptions like rental real estate and municipal bonds) comes not from "current income" but from "capital gain."

Meaning that you don't "make your millions" because of the cash dividends on your Google shares, you make them because the stock price triples

What the Hell Does that Have to do with Steem?

I hear all these "investor" discussions, and SO MANY of them are all centered on bid bots, and apps and "Investor ROI" referring to curation rewards and posting rewards and...

Heather
Blooming heather

YOU'RE ALL BARKING UP THE WRONG TREE!

Well, at least in part... stay with me here!

The point of getting people to invest is having a vehicle — Steem, the Steem token — that someone can buy for maybe $2 each and hopefully sell for $20. Thereby, you realize what investors would generally call a "ten-bagger."

Putting all this energy and effort into worrying about whether "investors" will get current income from their "investment" and feel good about holding Steem... is massively missing the point. UNLESS, of course, you happen to be your own grandparents, and are dependent on "fixed income." Since most people on this platform are younger than 40, I'm gonna guess NOT.

Granted, Steemit is somewhat unique in that you can be an "active" investor here... as many of us bloggers are, but I would call that "stake holders." 

This is Where it Gets a bit Tricky...

The more I listen to all the discussions, the more I come to think that we have an issue with mixing too many things together, here.

Let us back away for a moment, and consider that maybe "investors" and the various front ends/apps that build on the Steem blockchain are two completely different functions, to a large degree.

Flower
"Red Hot Poker"

Point 1: Investors don't have to "like" or directly "profit from" the apps people are building... they simply have to believe those apps are benefiting and making the Steem blockchain more valuable. Investing is typically a passive activity. Which leads to...

Point 2: Investors typically exist at a "wholesale" level of an organizational structure. Posting to Steemit, or running a bidbot or something else exists at the retail level. 

Point 3: We seem to always talk about investors as someone who invests and wants to start a blog or post kitten videos, but I'd surmise there are also investors who simply buy 500K Steem and "hold" it with the intention of selling it for $1M. No blog, no kitten videos... just buy-and-hold. And yet, this "class" of investor — who are likely the ones with more money to invest — seem almost like a forgotten class of citizen, around here.

You don't entice an investor to toss $500K at Snapchat because there are some cool new features, you entice them because you have a solid business plan that will earn them that 10-bagger in three years.

So when we worry about "Investors" around here, perhaps we should dial back the emphasis on current income for investors, and instead look at the bigger picture of what we need to do to help an investor triple their money, because the price of Steem triples.

And I am going to hazard a guess that such an event is most likely to grow out of a bunch of happy end users being excited about Steemit, and basically "selling" it to all their friends through word-of-mouth, causing a dynamic, rapidly growing community to happen, causing the price of Steem to go up because everyone wants onboard to get a slice of the pie.

Which is why my suggestion on @themarkymark's post was that we need to start by creating a better end user experience.

Of course, it's entirely possible I am just talking out my arse!

What do YOU think? How do YOU think of "investors" on Steemit? What role do you think investors play in the future of the community? Do you think we can attract "passive" investors, or will they all basically be "bloggers with money?" Leave a comment-- share your experiences-- be part of the conversation!


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I talk about this often. I can't call anyone draining a business (if you want to call it that) of money in the first 2 years an investor. That isn't investing, I don't know what to call it, but I laugh every time I hear them talk about their expectations as investors. They certainly don't qualify as angel investors.

I worked in Start-ups that went public. Every investor I knew was active in the fray seeing what they could add to a young business, pulling in contacts, resources and spending time and money building. Not screaming about taking early profits. If you steemicide I go out with you.

Frankly, it's getting old listening to it anyway. Tides are changing, competition is coming and I think they are going to get a big wake up call.

In general, buying and hodling crypto is not investing.

Yeah, that, right there.

But hey, day traders have been clamoring for respect as "investors" since the days of trading "pink sheet" OTC penny stocks.

It's not INVESTING! It's SPECULATING!

It's speculators all the way down.

Yeah, you're right, it's getting old. And I'm getting old, listening to it.

The closest we have to "investors" here are the people who put in $500K of their own money to develop some kind of app/program/bidbot in order to profit. But even that is more like "working capital management" than anything. Somebody like @blocktrades, perhaps. But it's still more brokerage and arbitrage than it is investing.

Part of the problem that sometimes makes me feel like I'm going prematurely gray is the incredibly "Steem centric" thinking about here. Everything is about "the magic of Steem" and nobody's looking at how the psychology of the outside world functions and nobody's taking much of a look at the massive fuckups that led to other companies' demise.

"Yeah, but Steem/Steemit is special and different!"

Yeah, you're "special and different," alright... because you drank a particular brand of Kool-Aid that suddenly rendered you exempt from the quirks of human nature and psychology...

Sorry, that was a bit snarky, but still...

I think your point is very valid my friend, but like I've been trying to convey to my fellow Steemians, the challenge with cryptocurrencies comes from the fact that we lack some of the other financial products that facilitate such types of investments.

At the risk of boring those who don't care much about this I will share a couple of important bits of information.

Normally when a real investor, I do mean INVESTOR (all caps) takes a big bite into a particular stock, he does and sets up his strategy with covered calls. This way he can "hedge his bet" sort of speak, and protect himself from a miscalculation.

So, What's a covered Call?

Writing covered calls is a solid income-producing strategy for any investor. ... Covered calls, an income-producing strategy, are a good option for investors seeking to produce income, while maintaining some flexibility in short / long-term capital gains, while at the same time providing a hedge against stock depreciation.

Because we are still dealing with a very early market, one that does not offer these type of financial tools. Early investors need to hedge their bets with different ways of securing ROI.

In other words, we know that Risk = Reward but the name of the game is mitigating Risk as much as possible. Professional investment is as many know management of risk and the result of that is capital gains.

But!! - I completely understand your point my friend.

Good points @meno, and yes... we are definitely dealing with an investment industry that is still in its infancy. And more than a few times I have heard people refer to cryptos and their markets as "the wild, will west" which is really not all that far from the truth.

As the years roll by, I am sure we will "come of age" here, as well. And I have to remind myself that until the middle of 2017 (when things really "took off"), the majority of crypto trading revolved around maybe a dozen coins.

Appreciate the thoughtful comment!

I don't think Steem has many investors; they are mostly speculators, but then again, they have bought or buy Steem too.

The best way of making the speculators happy is probably simply this: a higher Steem price.

The best way of attaining a high Steem price is getting the currency accepted as a payment method or at least used and mentioned on one of the larger existing retail or content sites, outside of the Steem blockchain application landscape dome, instead of trying to replicate said sites, compete with them, and getting no traction whatsoever.

A better user experience would be welcome; it may even attract more users and make existing users happier, but I am unconvinced that alone will take the Steem price to great heights as long as the economic model used is what it is and all development and marketing is focused inwards instead of outwards.

You bring up several good points here @ocrdu:

It all has to work together; "synergy."

I have long been pitching the idea of the importance of a Steem-based Economy as part of what we do here. The underlying structure is actually near-perfect for it.

Develop (first) an "internal marketplace" based on Steem... a cross between eBay, craigslist and a freelancing site. Make it so we can all trade 'real goods and services" with each other, using the "local" currency.

That would address the trickiness of what "small accounts" can do with their 20 Steem... because getting it from "here" to their bank accounts via an exchange and going to BTC to fiat is an exercise in futility and fees. Plus, it keeps the money INSIDE the system.

Once THAT thrives and works, Steem suddenly has "differentiation," which is massively important to setting itself aside (and being attractive to REAL investors) in this ocean of mostly shitcoins. And once people see "an alt. economy" working here... "outsiders" might want to join it! How about THAT?

And I see that as the point where your suggestion of Steem as part of external retail/market sites comes into play.

"Yeah, those people on Steemit are rolling in their local currency, we want to be PART of that" now comes into play.

Now, because the Steem token has a somewhat finite supply (even with "inflation") price appreciation suddenly comes into play. The ONLY way the Steem economy can become a "muli-billion dollar marketplace" is for the price of the token to go up, up, UP.

Of course, now we get back to that being a "longer term play."

It would take probably 18 months to two years to establish a serious internal economy, and then another 2-3 years to hone the external attractiveness. So now we're right back to looking at our original "issue," namely that we're looking at a 4-5 year INVESTMENT horizon in an environment where everyone if getting their shorts in a knot over next week's pizza money...

It would require a long-term vision, yes; I don't think that is in the cards, though.

That is one of the reasons I would prefer to see the marketing of Steem-as-a-currency for external parties happen at the same time, or even before, focussing on the application landscape and making an internal market for buying stuff which is unlikely to detract people away from the established players anyway. I think.

I don't think we have five years either; the first cryptocurrencies to get a real foothold in the world outside their respective bubbles/domes will win. Getting anywhere will require both push and pull marketing, not just working on expanding what we have for whom we have and then hoping for interest from outside. I think 8-).

But I'm afraid it's all moot (in the USA sense of the word) anyway.

I might effectively be committing "Steemicide" in a public forum here

Of course, it's entirely possible I am just talking out my arse!

Highly eloquent and, above all, coherent words talked out of 'lucid arses', will never achieve to penetrate those ears plugged with purulent earwax filled profusely with huge balls of FOMO on those "investors" with deep pockets but immature dead brains under the effect voodoo of an easy and quick ROI.

They'll only manage to perceive the exclusive hallucination of their own greed. Trying to milk without respite until they exhaust till the last drop of as many tits as the insatiable rapacity of their voracious claws manage to nail their nails upon to empty them pumping from up and down as soon as possible.

So, why bother explaining things rationally to these hasty and incurable im-patients? }:)

Thanks!

I suppose part of the "problem" we have here isn't just Steemit/Steem-related, it is also crypto-related.

For the longest time, people did "invest" in cryptos and there were just a handful to choose from and you bought them because you believed in the long term potential of blockchain technology.

Then — sometime in 2017 — everything went haywire, and we suddenly got this whole new paradigm that "investing" in cryptos was this FOMO day-trading speculation where people flocked around from one "flavor of the day" to another... and labelled themselves investors in the process.

Now those "chickens" have come back to Steemit to roost and everyone is so damn concerned about how to double their money next week that they have completely grown blind to the actual nature of investing... which tends to have a pretty long-term horizon.

I DO see the potential long term potential of Steem, so I will probably continue pissing into the wind until I just can't bring myself to do it, anymore!

I haven't seen @themarkymark's OP, so I don't know how your stance differs from his, but this makes sense to me.

Actually, he was asking for people's input... and my comment "forked" and became about two topics; so one I left as a comment there, and the other became a post, here...

I did link through and read it after yours.

After nearly two years on Steemit I always wonder why so little is done to make the user experience simpler and easier - this place is so geek driven...

...have you seen steampeak yet?...Much nicer...

I saw some kind of announcement maybe a month ago, but forgot about it... I guess they are not promoting it much. I'll have to go check it out.

Thanks for the heads-up!

It all came as a bit of s shock - I'd forgotten what a well presented website looked like! lol

It's very cool, and I want to start using it - BUT - it makes the images so frigging huge it's almost unusable - it there a way to change that?, having only one image on screen at a time and doing endless scrolling is not good

image.png

On Grid mode it doesn't have the text - either way it's a big step backward from Steemit I think. Which is a real shame because if they sort this display issue it could be great.

Night mode finally gets away from white - good to have the option - but really it's just an upgrade from the hopeless Busy - maybe people with cell phones like that layout - but active users mostly seem to use the original site:

http://steemreports.com/sincerity-most-used-apps/

OK here I am straight back on Steemit - Steempeak runs really slow because it's always loading the full size images that make the site unusable.

And some stuff is not obvious to a bozo like me - how do you edit your comments?

Great potential, but so far I wouldn't want to use it.

Thanks - I'm going to try it out today

It actually reminds me a little of the early Internet... VERY geeky, and the nerds secretly "wanting to keep it that way" because they felt passive-aggressively proprietary about their new "toy" and didn't really want "children and housewives" to be part of the picture.

Ever notice how "male-dominated" Steemit is?

Going on the way they never sort out even the most basic user interface issues I think you are dead right there.

I'm going to try Steempeak today -hope it's good, I hated Busy.

I've never thought about male domination because I seem to spend all my time here interacting with geek goddesses :)

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The problem seems to me to be the big guys either vote mainly for themselves and/or a tight circle of friends. Now that is totally their prerogative of course, however what it does is leaves the smaller accounts with very little rewards that are simply not worth the effort expended. This starts a system where for every one person that joins through the front door, three quit through the back door. The simple cure is to follow the lead set by @fulltimegeek where he has used his considerable SP to support and motivate a multitude of folks that he feels provide good for the site.

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