RE: Is Burning the Best Way to Save Steem from Inflation?
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Good morning @dses and everyone else reading my comment
 | I brought some of you to this publication, simply because I wanted to know your opinion on discussed topic and I'm wondering if you agree with mine. |
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Burning is something trendy right now. And I'm fully aware that many people consider burning tokens as a way of bringing value (by reducing inflation) to token and somehow it supposely (by magic) should increase price of such a token.
In theory maybe that explanation make some sense, however this believe is fundamentally flawed.
Behind selling pressure are always those users/investors who care about profiting/cashing out their rewards. Those people obviously will not burn their tokens. Why would they.
The very only group of users promoting idea of burning part of their rewards are the same ones (believers), who would otherwise most likely power up those tokens.
So let's ask ourselfs a question: does it change ANYTHING at all if part of newly received STEEM would be burned or powered up? Not really. Impact would be close to non-existing. Plus it wouldn't create new demand for STEEM/PAL/LEO etc.
The only reasonable way of burning tokens is by creating some ulitily that has a value (existing example: promoting post to trending page on PALnet/SteemLeo) and burning tokens. That would make sense.
To illustrate what I mean, I would use steemword.org as an example:
it's very useful took, and if monthly membership would be introduced, which would require buying 10 steem and burning them (sending to @null) then it would both: reduce REAL inflation and also bring demand for STEEM token.
Yours, Piotr
@dses, I hope you don't mind that I will share this publication with wider audience as Im interested with other users opinion on this topic
Not at all @crypto.piotr we need many voices and ideas and let's get out brains cracking outside the box.
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Burning is a way to combat inflation.. But ultimately it's those with large stake that receive the most of it... and therefore decide our fate.
Yes everyone has been hearing that stupid ass theory for a long time and its still bullshit.
The path to creating value is mass adoption.
The path to to mass adoption is o create the ability for free account to earn rewards through curation at least at the level shown on Steemworld and stop all the bullshit flagging.
Then the door to small investors is open and we are laughing.
Promoting content by burning SBD is not just burning token for nothing!
It's an advertisement system that enables outsiders to use a built-in system and promote their products.
why the fuck do you believe that burning tokens will make then attractive as an investment LOL
that is the most stupid fucked up thinking. But its good have a laugh first thing in the morning
I do appreciate your opinion, @joe.public, but in my post, you don't need to curse to show your frustration 🙂
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And I do not appreciate being flagged for stating the obvious !
Its the height of ignorance in my book
I expect you to remove the flag
and I am not kidding
I am not kidding either. 🙂
As I mentioned before, I appreciate your opinion, but I also mention you do not need to project it in such an angry manner (added with language) which is very much unnecessary.
I flag your angry emotion, not your facts.
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The anger is only in your projection.
My original comment had none. Some sadness maybe.
The anger is only in your projection.
My original comment had none. Some sadness maybe.
Edit
Do you think anger is a bad thing?
Or do you just think the expression of anger is bad?
Anger projected in a manner people can understand is good. Perhaps this is a cultural problem.
Wise choice of words, even with dissatisfaction, can go across miles and bring understanding to hearers.
As you have clearly pointed out.
It is my preference that I did not like the way you address it with your choice of words.
Since you have removed your down votes I will remove mine.
But don't except people to accept your frustration and sadness when you choose to present it to others with unwise choice (unnecessary) of rude words since it is freedom of speech
You shouldn't have been alarmed with that at the first place haha. ☺️
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Actually this place makes me laugh a lot as well.
Like what is going on between you and I, it is very enjoyable experience for me.
I believe if I can remember to connect with the person I have a disagreement with, we can sort things out.
Much better than flags for heart and for business.
as stated before, I think the community underestimates the market forces. Steem's price is just not going to head anywhere until the bear market for steem is over (which might be in the next couple of months):
https://steempeak.com/steem/@tobetada/what-drives-the-price-of-steem
Thank you for your feedback and for sharing this link with us @tobetada
Going to check it out right away,
Piotr
I think the word is out about the violent and corrupt practices here.
We cant even organise one person 20 votes for witnesses! its one account 20 votes and we all know some people here have thousands of accounts .
How could anyone in their right mind trust the self proclaimed largest stakeholder, an ignorant psychopath who is incapable of seeing beyond his own narrow self interest ?
The path to mass adoption is by making it possible for everyone to build their stake in the platform without resorting to the scamy shit the whales here get up to.
If we can get democratic witness leadership, we can enforce the reduction of Steem power held on the platform by the @nextgencrypto group of accounts. Then we can start distributing Steem far and wide
Hello, my friend.
Correct me if I'm wrong, but the term "burn" means to destroy the STEEMs (?). In this way, the price of STEEM rises. Right?
But originally there wasn't a finite amount of STEEM created, like all blockchain projects? To avoid inflation?
I have an idea, I don't know if it's crazy, but what would happen if they paid to burn the STEEMs?
This way, the price is increased, isn't it? I guess if there is less STEEM, the price will have to go up, because of supply and demand. These are just conjectures.
Good to see you :D
Stay in touch
Rather than an incensitive to burn the tokens, I'd rather see an incensitive to buy & stake the token, like a page specially giving visibility to those of the same "level" of staked token than you, which would give you more chance to interact with the people who are in the same staking group as you, encouraging you to network with them & so on...
As for the burn, it may be flawed for steem itself, but it's a very good way for the steem tokens, who works on a different type of economics than steem itself.
👍🏼This is one way, yes.
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I agree. Burning tokens doesn't increase the value of a coin. Price of a token doesn't depend on its quantity. Bitcoin is not valuable just because it is rare. But, it is valuable because people see value in it. On the other hand price of steem is not declining because of increasing numbers of Steem and SBD. In fact, no SBD is being printed these days but, its price is also declining. The price of Steem is going down because of faulty strategies of Stinc and top witnesses who are eager to kill the goose which lays golden eggs. Too much greed is the main reason behind the fall of STeem.
Yes you are seeing as what I am seeing. 👍🏼
People got to see beyond the social media, content creation, upvote or down vote hedge, then it can work to make steem valuable.
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Burning just seems to make the little guy be a sucker at the expense of the big whale.
Steem needs to figure out how to reward users from using and steem and being active here.
That is the core issue that is always ignored
I agree with you
That is within the real of the blockchain. Time to think outside of the box.
Burning steem or sidechain tokens doesn't make any difference when there isn't much demand for them anyway. Whales control steem's price. Instead of burning, everyone should always power up and help decide token distribution. That... Or just sell.
Don't just sell.
If there're business entity outlets that allows you to use instead of just sell your tokens, would you consider it?
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There are almost none of those, which is why the two options I've mentioned are pretty much all there is to it.
That's because they are waiting for someone else to do that for them.
But that being said, IF there was that option, would you use it instead of just selling it?
When that finally happens, steem price is finally going to go up. So yes, I would hold it, use it, delegate it, whatever. But it's just not going to happen anytime soon.
Nothing takes instant.
But it is always good to look out of any initiative. It could just be right around the corner about to happen.
🙂
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Nah. Not anytime soon. Unfortunately.
This is your opinion. Burning steem wont increase demand for it in the short term, but should demand actually increase as everyone hopes, there will be less supply to go around. Are there other better ways to burn up the supply by creating outside demand for it first? Sure there is. But what difference does it make to you, if I want to send 4% of my rewards to @null, or somebody else wants to create a burnpost? This seems like a pointless argument to make because it's a voluntary exercise, and at the end of the day, it still creates less supply. If you actually coupled that with people needing to purchase and burn steem to perform various operations such as promotion, it's even better.
Do companies buy back their own stock in order to increase the demand for it? No, they do so in order to decrease the supply. So that if there is demand for it in future, there is less available on the market, and you have more price appreciation. It's a long game not a short game.
Steem supply is already gigantic due to whales' sp and their potential power downs.
We have a trending tab. If they used it as the default tab instead of trending, people would use it. They don't do it. They don't care.
You know, I paid @smitop to develop TWO THINGS that could help with this. But no witness or steem app developer cares. (except for SBI's joesavage)
I absolutely share your views. We need to create utility for token burning.
I think burning could be helpful but I also think reducing inflation could help increase the value of the tokens without having to just waste the tokens already in circulation.
Steem supply is already gigantic thanks to whales stocking up and controlling reward distribution while the price doesn't increase. No matter how much we burn, there will always be too much supply thanks to them.
I see burning tokens as pathetic.
Even vesting it to new account holders would create more demand for Steem.
We are being led by fucking morons.
If we don't take control and enforce democratically elected witnesses, being one person 20 votes as opposed to one account 20 votes this place is crashing and it deserves to crash
This is not something new in the crypto world. However, it's usually used when the token value is high and the owners maintain stability. But I also know when tokens burned (Iconomi is the example, from last year) it had no effect on price. The price of token has fallen sharply regardless of burning.
Just my five cents, I'm not a professional in this crypto economy...
Steem supply is already gigantic thanks to whales stocking up and controlling reward distribution while the price doesn't increase. No matter how much we burn, there will always be too much supply thanks to them.
I like my answers to be as summarized and clear as possible.
From my point of view, what makes STEEM have a market value is the fact of rewarding for the publications and the votes they produce, generating profit.
I think the best way would be for that STEEM to become STEEM POWER, Tokens and even trade on serious platforms.
Also projects like @steemmonsters do can generate wealth if that benefit is transformed into SP.
Hence @olimiesma
After the rewards of generating profit, you have steem in your hands; what's next?
That would be in every person's mind.
Would it just be selling off for fiat and be done with it?
Burning steem to increase value does not sound right to me
It will not be of major importance to the stock exchanges for it is the market that decides the prices of buying and selling. When someone with large accounts is still willing to dump quantities of steem on the stock exchange, the price will not rise
But there are those who make big money (TRADING) on the stock exchange that are profitable because the prices are low. I will not elaborate on this, but it is also a contributing factor to the low price.
Other measures are needed to increase the price of STEEM over time.
Marketing costs a lot, but we should start with massive marketing to our own who are part of the community.
Without starting with our own members first, it will be useless to make progress. Big Investors come when they see that there is a substance to what we do and that society is growing and solid
Too many people complain about screaming wolves when the price is low without even doing anything about it. Yes, because we have some blame ourselves here.
@streetstyle has come up with a great action #SPUD
"SPUD 6" STEEM POWER UP DAY October 1, 2019 is now running for the sixth time and SPUD is increasing in scope each time.
Many people here become familiar with what SPUD is and join.
There is also a competition with good prizes
I believe SPUD will be one of the bigger events here at Steemit
Why is SPUD good?
What we see is that small accounts now stop taking out their profits and they build their Steempower and have gained an understanding to keep the SP
Many small accounts that turn down their power to sell their Steem on the stock exchange make a large amount each week and have an impact on price
What is also happening now is that several of those who join SPUD have started to buy Steem to increase their strength in SP.
The more people who see that benefit, our economy will be healthier in Steemit
IMHO there is no need to burn any crypto at all. The code was desined in such way that any entity getting the reward should USE it. The only cancer here is the need to transform that crypto into fiat. If every network participant can BUIDL something on that network that would be useful for others, then there will be no need to transform it into fiat or even burn the tokens. The total supply of one coin is not the integer number. Burning 10^4 coins from a network with scalability of 10^-8 and a total supply of 10^12 (ex) will have no action on the whole network. The best thing to do is to make sure the members of the network can USE the coin as a form of payment for many products and services.
You hit the jackpot @concorde. That's what I am thinking too.
And that's one of the reason I am going to Steemfest, to see if there're any projects heading that direction.
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@concorde has stated it very well - value comes with demand, and that will drive apparent scarcity. When you have more buyers than sellers in the market, the price will go up.
Exactly, @jdkennedy
How about buying local business vouchers (from F&B, to grocery) that are on-board with steem blockchain so that they can spend for lesser amount and at the same time the business entity would be able to stake on their account to help the community later, @crypto.piotr?
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For the most part I agree with you @crypto.piotr. I think something like what LEO is doing, burning the rewards earned from bat browser makes sense as it takes care of that supply and does not put the leo team in a position to decided to sell, powerup or hold liquid. It's a sure thing with the burn.
And like you mentioned in the steemworld example, that is a win-win. I like that cus it creates demand and helps cut inflation.
Burning make sense if you have a certain amount of coins reserved for special tasks and you know you don't need then anymore. But these are coins that are not issued so far or at an escrow account.
To burn tokens in circulation does not change anything. Less coins - higher value, more coins - lower value, the product stays the same. You need to generate more demand. If the demand is not there an (just optical) higher price for a coin does not help.
Think in practical terms.
How does this work in the real world?
Consumer side inflation is a function of LIQUIDITY and DEMAND not "total dollars in existence".
Have you ever heard a government or central bank advocate BURNING MONEY?
No.
When QE1 and QE2 and QE3 were executed, trillions of new bills were printed, but inflation barely rippled, WHY IS THAT? LINK
Spoiler Alert! - Because the new bills were SEQUESTERED in VAULTS.
Powering-up your STEEM has almost the same effect as BURNING IT.
Powering-up your STEEM is like putting it in a VAULT.
YOU ARE RIGHT!!
That is only one way, because powering up actually still create new steem.
I may be wrong, but when new notes are created they are yes still in the vault but it is still creating a lot more volume even though it is not being used.
The main thing is that we have something being created yet to be widely used, that creates the demand for it.
Your idea is a good one but only having the same amount of "citizens of steem" to keep powering up and holding doesn’t truly solve the inflation on a long term basis.
The most important question right now is what else can we do with liquidated steem (to increase its value of usefulness) besides trading off for fiat to put food on the table / spend off for something tangible, yes?
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LIQUIDITY and DEMAND.
Sure, I understand you (and many others) believe there is a LIQUIDITY problem (too much STEEM), BUT all that does is drive the price (value) down (which isn't necessarily a bad thing).
If a country wants to make their goods and services more attractive in the global marketplace, they devalue their money by printing more! Lowering the value of STEEM makes STEEMIAN WORK more affordable and thus more attractive in the global marketplace!
The "problem" of MICROPAYMENTS has been a difficult one for many years and I believe a low STEEM valuation actually makes MICROPAYMENTS a feasible reality!
If people could join STEEMIT and easily hire workers to write articles, advertise products and services, create computer programs and websites, and produce videos, in exchange for STEEM, that would translate into REAL VALUE and a REAL (STEEM) ECONOMY.
The real potential for growth comes from GLOBAL participation. We need more participation from Venezuela, India, China, and the African and middle eastern nations! Most people around the world do hard manual labor for less that $1 USD a day! Just imagine if these people (with smartphones or computers) figured out that they could get (ad-hoc) work by participating in STEEMIT to supplement their income (perhaps doubling or tripling their current take home pay).
Here's an example that helped me understand the economics of value.
Back in 2014 I read an article about the "value" of Bitcoin that made a use-case for a $10,000.00+ Bitcoin valuation (the current value at the time was about $300.00). The article made the compelling case that The Baltic Shipping Exchange LINK spends a lot of money exchanging currencies between different denominations. The total value of the Baltic Shipping Exchange was, at the time, roughly ten times the total MARKET CAP of Bitcoin.
They laid out a case, and pointed out that this is just one of many possible cases, that IFF The Baltic Shipping Exchange converted to 100% Bitcoin, they would save a lot of money currently lost in currency exchanges (roughly 10% or more per conversion). And as a consequence of that, the MARKET CAP of Bitcoin would grow by 10X, and consequently, the effective value of Bitcoin would grow by 10X.
The value of your currency is directly proportional to the current total number of users and the $ value (MARKET CAP) currently invested.
And as for your "STEEM POWER still earns interest" proviso, #1, it's still not in circulation, so it doesn't contribute to LIQUIDITY. And #2, it attracts investors (just like bank-deposit interest payments), which increases MARKET CAP.
AND if you really really really want to BURN STEEM, why not BURN the STEEM lost from DOWNVOTES?
Currently, DOWNVOTES boost the income of TOP EARNERS, which incentives them to DOWNVOTE EARLY AND OFTEN. If it was really just about "bad content", why not just BURN DOWNVOTES?
Thanks for your thoughtful response and please let me know if you have any questions.
You have many good points there @logiczombie
And yes, GLOBAL participation is the key.
Don't forget when BTC first started, local commodities are already participating, in a way to try out this easy transition that saves a lot of money
So now, what I am trying to point out from the very beginning of the post, is we are missing that piece of the puzzle, when advertisers are easily investing into steem and pay off writers to produce content in Steem, there is still the missing element of exchange from steem to practical needs (especially for the countries you just mentioned) from their local commodities.
The missing piece of the other side that absorbs steem for other use is yet booming.
And when that day comes, burning is not necessary at all.
Wouldn't you agree?
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In order to buy and sell items IRL you must have some sort of private chat feature.
Also, vendors will inevitably dump (liquidate) their STEEM on the open market, (when selling their wares) further driving down the valuation relative to fiat.
The current major use-case for STEEM (value) is ADVERTISING.
However, it looks like the banner ads are denominated in $USD.
https://staticfiles.steemit.com/SteemitMediaKit.pdf
The big G and the big F make zillions of dollars on advertising. If STEEMIT could get just a small slice of that juicy ad money converted to STEEM, it would do wonders for the MARKET CAP.
If a major advertiser wants to drop millions of dollars of ads on STEEMIT, their best option at the moment, is to buy banner ads (which do absolutely nothing for the price of STEEM).
Also, wouldn't it be nice to be able to upvote ads that you like and get curation rewards? It seems like the "promoted" feature should be the gateway to the banner ads.
Burning can perhaps create scarcity and drive up demand and price however burning should not be an answer. I agree with @knircky, if there was a clear cut reward for active users everything would look up for steem. Investing more into what and who is already invested makes more plausible sense. Trying to burn and neglecting what is already, may be greedy and neglectful. I don’t believe burning will increase value it may increase scarcity but if the people that believe in the project no longer hold it as valuable it won't matter how much of it there is, if they all decide to abandon the project. I believe in building from within rather than trying to make things look good from the outside i.e burning coins to increase demand. How about increasing interest and thus increasing demand. Steem has to have a niche; a use, a project, a reward, something that pulls in interest and users and demand. IMO
This goes for anyone reading this post, not necessarily you OP..
Instead of burning it, send your STEEM to me with the memo 'burn' and I will put it to great use powering it up and curating authors for c-squared and helpiecake.. I'd love more SP to both earn more reward AND to be able to reward more to others.