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RE: Announcing Steem 0.14.4 . Shared DB Preview Release by snowflake

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Viewing a response to: @nextgencrypto/re-steemitblog-announcing-steem-0-14-4-shared-db-preview-release-20161028t220118908z

· @snowflake · (edited)
My take is that Dan and Ned want to let the 19 witnesses decide out of fear of being pointed fingers at personally. They most likely want change too otherwise they wouldn't have proposed a vote in the first place.
I get your point though but I don't think that every member of the community should be able to vote on these decisions. Many people have no idea how the system actually works, 90% of people I have interacted with think that steem power gives you interest( crazy I know) I much prefer witnesses which are technically knowledgable about steem to make these decisions.
I encourage witnesses to have a look at my recent posts 
https://steemit.com/saving/@bobsunday/price-will-continue-downward-unless-we-make-a-simple-change#@snowflake/re-charlieshrem-re-bobsunday-price-will-continue-downward-unless-we-make-a-simple-change-20161024t234409300z
https://steemit.com/saving/@bobsunday/round-2-community-organized-rescue-mission#@snowflake/re-timcliff-re-snowflake-re-timcliff-re-bobsunday-re-bobsunday-round-2-community-organized-rescue-mission-20161026t190225800z
https://steemit.com/steemit/@timcliff/attention-sharks-there-is-blood-in-the-water-are-you-ready-to-invest#@snowflake/re-luminousvisions-re-snowflake-re-luminousvisions-re-timcliff-attention-sharks-there-is-blood-in-the-water-are-you-ready-to-invest-20161026t210446700z

I explained in details why I think reducing inflation rate to the lowest possible is important,why reducing the vesting withdraw period to a minimum is also very important and why the current high inflation rate and vesting withdraw period serve no real purpose other than undermining the system as a whole.
I also explained why the more coins is being issued the more difficult it will be for the price of steem to increase in the future which means the more difficult for the rewards on the platform to increase hence why the steem inflation rate should be reduced at the lowest possible.




__Here is why only reducing slighly the inflation rate and the vesting withdraw period would make absolutely no difference.__

- There would still be unnecessary and exponential downward pressure on the price of steem
- The reverse- split would still have to occur
- Users would still have the illusion that they receive VESTs for being powered up ( this is bad for many different reasons, for example users think that their influence grows naturally without doing anything nor buying any steem, so they buy less and curate less.)
- If the inflation is say 40% speculators would still be wary and reluctant to enter the market
- Users participation would still be restrained by an inconvenient lock time period.
- The steem power distribution wouldn't be much faster as there would still be few buyers if the inflation is say 40%.
- The platform would still be confusing for most people to understand ( especially investors) .
- Steemit would still have this reputation of being this inflationnary ponzi currency and people would still want to sell it instead of holding it.


What steemit needs right now is interest from the crypto sphere, especially traders and investors. Speculation is everything in crypto, it's what gets a project like ETH to go from a few millions market cap to a billion, it's what gets you big investors pay attention. For this you need a currency with the lowest inflation possible and you need a very short time lock period so that volume can increase, more people can participate and distribution can happen faster.. Today if an investors want to buy say  1 000 000$ worth of steem he won't be able to do so without sending the price  sky high which means he would pay a premium all the way up. Volume is key if you want big investors to enter the market. Volume creates confidence, there is a reason John McAfee made a remark early on about the lack of volume. Steem should aim at reducing it supply long term not increasing it. When the supply goes down the price goes up, if bitcoin was using graphene it would be perfectly suited for such a platform because it would allow the price to grow organically which means rewards would grow as more users use it.
Steem would have to burn more coins that it creates to pay for rewards ( promoted features and more) but it is totally possible to have a decreasing supply long term and that's what steem should aim for, certainely not increasing it crazy like they do know, this is insane.
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@craig-grant ·
would you consider only changing or stopping the inflation rate for accounts that are powering down, if that's possible
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@bacchist ·
It's not possible at the moment. As the system is currently designed, powering down removes a constant amount of vests from an account, determined by the vest balance at the time of power down. There is **one** conversion rate for Steem and VESTs.... it is used when you power up and when you power down. Inflation of SP balances is really just due to the change in the conversion rate over time... It would require a complete overhaul to basically tax people for powering down.

And honestly, that's not what we need to be doing... If people want to power down, that's great. SP balances get the highest interest. The more Steem held in SP balances, the faster the money supply grows. That's dilution... even for SP. For SP to hold its ground against dilution, the vested level needs to reach 90%
👍  
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@snowflake · (edited)
> Inflation of SP balances is really just due to the change in the conversion rate over time

Inflation of steem is completely unnecessary and it's not a consequence of anything.


>SP balances get the highest interest

SP balances get zero interest, you actually lose VESTs every year when powered up

>The more Steem held in SP balances, the faster the money supply grows. That's dilution... even for SP

The money supply is already shedulded in the code, the number of coins issued doesn't change when people are powering up or down.

>That's dilution... even for SP

Dilution is a result of inflation, it's basically a devaluation of a currency. 

>the vested level needs to reach 90%

Not sure exactly what you mean.  When you power up you are automatically protected by the inflation. The inflation right now is a lot higher than 100%. Another great way to protect people from inflation is to not create it in the first place.
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@snowflake · (edited)
This wouldn't solve the problems created by the hyper inflation because it will still be there. It will probably mitigate the price drop temporarily but it's not a sustainable model. Also what this will do is that it will disincentivize people to power up in the first place. It would also create an environement where people are not equally treated which to me sets a pretty bad precedent.

I understand your mind set craig, you really like your steem power number increasing. And you are not the only one. But you need to understand that the inflation created to give people this fake illusionary feeling of having growing power/share is undermining the system as a whole, as it creates exponential downward pressure on the price of steem.

Actually if I remember correctly you very much understand the importance of VESTS. 
So Im going to try to explain to you how the numbers growing in your account is just an illusion. When your steem power numbers grows your VESTS don't grow, because this steem power is distributed equally to everyone so you are not gaining VESTS when you see those numbers grows. The only way to make more VESTS is to curate or posts content or buy more steem on the market.
When people power down and you stay powered up it doesn't give you more VESTS unless you buy it on the market, all it does is that it reduces the VESTS of people selling their steem power. In other words, powering up doesn't give you any financial benefit other than being able to vote and earn curation rewards.
So if you remove the unnecessary inflation completely, your steem power balance would only grow if you curate or post content or buy more steem. You would be given a much more honest interpretation of the growth of  your shares in the platform ( when your steem power grows your VESTS /share grows) and most importantly your account value is much more likely to grow in value because we wouldn't have this crazy useless printing going which scares away pretty much every investors/traders and kills the price of steem.

Many people think that if users's steem power wouldn't grow there would be no incentives to power up. This is a false misconception as already today the only real financial benefit from powering up is the curation rewards, a growing number of steem power gives you zero benefits. The only people buying steem power for this reason don't understand how the system works and you can be sure that  investors won't invest on steem based on this illusion. 
As I have said in one of my previous post, the 2 years vesting withdraw period's only purpose is to prevent people from selling the highly inflated steem but it's not even clear why steem is inflated in the first place. Here we have a complexe system trying to fix problems that don't exist. Btw I'm not criticizing only I also offered solutions.
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@craig-grant · (edited)
I am aware of how vests work, as I pay more attention to my vests than I do the steem power, and I pay close attention to the conversion rate of steem to vests, like how it goes up everyday, so in August it cost about 250 steem to get 1 MV, and now it costs 407 steem, I don't know if that rate can go down, from the time I started seeing it in July, it has always went up. I curate and blog everyday, since I started posting on steemit in June I have posted everyday except when hurricane Mathew shut the electricity off for 24 hours. I do not want the inflation rate to go down, and I do not want the steem price to go up anytime soon, it would be nice to see 1 cent steem so I can power up $5000 worth of steem.
👍  , ,
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@craig-grant · (edited)
in regards to the highs of July, I don't see steem ever getting back that high, I think the perfect price for steem is $1, and a good buy price is 25 cents, it can go to $2 or more but wont stay at that price for long. With 2000 active users now, steemit is just a fetus,  with more users the the price can go up without any changes the current inflation rate. Improvements in user experience plus better distribution of voting power with curation guilds.. that's all steemit needs to see happen for the next 3 months
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@the.masses ·
I completely disagree but not with the facts that you have listed, rather the truth you have failed to mention... I follow you because you are more knowledged than I in certain areas of life mainly caused by the growth rate at which we matured. So if Steemit matures then it will be like we will be. This we will call the new brain of all mankind finally connecting the c/entire universe. Cmd+enter

 Here's the issue that I see  though.... Everybody has a subconscious-willpower. Will power has a positive and negative influx of design creating the same outcome, always! 

 *  **subconscious**- Origin of meaning also known as.... [Light](http://lingua.ly/)
 *  **Perfection** - Beginning, birth- eternal truth

Why call it what it isn't.. It is a measure in which we trust because of the algorithm has given us. So back to **Vests** and **Steem Power**, they should be considered as neurons reaching higher levels of transmit for a deeper understanding. Too much knowledge has only so much wisdom before he understands. It's like fishing without lures or bobbers... It's schools of fish.
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@the.masses ·
Bam! To be or not to be~
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@the.masses ·
I agree with most of what you said besides the fact that inflation rates are an interest only to those who want to rule the world from steempower. Personally, I would give anybody on steem anything as long as I had access to it. This means creating "coins" attached to "assets" and leaving a trail along the way for people to discover. I could go more into depth but I don't want to get to far off topic as I tend to usually do.
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