Re: Steem pyramid scheme revealed

Quote from: iamnotback on July 24, 2016, 01:02:13 PM

Btw, I think I have figured out a better way to structure it than Steem did, which retains the concept but is mathematically much more enticing for the outside investors.

I think the structure can be improved so that:

The debasement of investors is much lower and decreases over time, and funding from debasement is gradually replaced by funding from transaction fees. This would be explicit in the protocol.
Bloggers make a more long-term commitment to the site, and in return the site helps them build a long-term community, and the investors are supporting them long-term.
Fixing the voting and ranking system so can diversify into more markets, such as reviews, music distribution, etc..
Signups would not include a free award of tokens, and instead an initial quantity would need to be earned via proof-of-work (which would be done automatically for the user, no technical expertise required). This removes the need for the 80% "pre"-mine. Note this precipitates a need for CPU friendly PoW algorithm.
A superior, scalable microtransaction blockchain design which is my improvement on Satoshi's PoW blockchain (i.e. not proof-of-stake), so as to give a valid use case for transactions that can't be done (nor scaled) with credit cards nor Bitcoin. Note although Graphene (Steem's blockchain) claims 3 seconds per block confirmation speed, this may not be fast enough for real-time gamification transactions (who wants to pause for more than 3 probably 5+ seconds every time they need to access some resource). I also have my doubts about whether DPoS is scalable without being centralized. Also I have my doubts about the reliability of DPoS when pushing for faster transactions, because it depends on only one delegate validator per block (perhaps this could be improved but game theory issues will arise unless it is essentially a centralized, corporate run blockchain and in which case you don't need a blockchain, just run a corporate database?).

Note proof-of-stake would be retained for some aspects such as voting power and rate-limiting.

Quote from: iamnotback on July 24, 2016, 10:17:48 PM

...I have since done more in depth analysis of the math of Steem variables and to me it looks very unattractive for long-term investors to buy STEEM POWER.

It is not yet clear how investors would be rewarded by fast transfers of STEEM between content creators. There is no mechanism to transfer value to the investors, except I guess if demand for STEEM becomes so very great then the ratio of SP to STEEM will drop much below 9, then the SP holders would be earning a compounding interest rate per the recent math I showed. But we are talking about needing $10 billions of transactional demand yearly for STEEM within a few years. There is no mechanism in the Steem protocol to scale back rewards on blogging other than to decrease the price and shrink the market capitalization. So if the rate of transaction growth can't keep up, then the price must drop.

That is a very bad deal for long-term investors. Far too risky. It is a fatal error. Not to mention that the Larimers Incorporated have taken too big of a share of the pie.