@abh12345 put up an interesting post yesterday that stimulated some very good conversation but also got me thinking.
In his post, @abh12345 made the case that for focusing upon one's own account. Essentially, his point is we need more of a middle class on STEEM and too many spent time looking for ways to help smaller accounts before they proved themselves dedicated to this blockchain.
It is hard to argue with the number of inactives and the continual decrease in SP for the Planktons. My guess is these people are either cashing out or going inactive.
Overall, his message was to stop looking at the group behind you, focus upon taking your account to the category ahead of you.
The STEEM blockchain needs that.
Here is the post which is suggested reading:
https://steemit.com/steemit/@abh12345/steem-don-t-forget-to-look-up
This brought a response from @preparedwombat that is also suggested reading. This was a link to a post that goes back a couple months which spelled out the numbers on STEEM.
These two articles got me thinking about the STEEM blockchain.
And then I had another Holy S**t moment.
Every single SP is going to be very very valuable. The numbers simply dictate it.
STEEM POWER IS GOING TO BE VERY VERY RARE.
For the newer people, I will state that Steem Power does not exist. It is something that was made up completely. It is virtual in a virtual world.
The unit of measure that is extremely important is MVests. These are denoted in the wallet on Steemit as SP, but it is really the MVests that truly determine it all.
Going back to @preparedwombat's article, we see this:
9pm 14 May
491.38668637498 Steem per MVests
so 2035.05717132 Vests per Steem.
9pm 15 May
491.41228926227 Steem per MVests
so 2034.95114357 Vest per Steem.
Now for the latest number pulled from steemdb.com :
9pm July 2
492.65279941175 STEEM per MVest.
That means in a little over 6 weeks, each MVest is now worth 1.27 STEEM more. Or to reverse it, each MVest now costs 1.27 more STEEM than it did before.
So what does this mean?
Let us use @ned powering down part of his account as an example. It will take him 13 weeks to power down the full amount. Since that is close to twice the time period between @preparedwombat's numbers and mine, we will use 2.54 (1.27 x 2) as the difference in price.
Hence, after 13 weeks, each MVest will cost 2.54 more STEEM than it did when the process started. This means that if @ned turned around and immediately powered up, he would get 7.23 less MVests than he had before. Another way of putting it is that it those 13 weeks cost him a little more than 3550 STEEM.
The advantage for all that are on here now have is that every single MVest (or portion thereof) in one's account is growing. Whatever the number of vests one has, it will take more STEEM in a year to equal that total.
Which brings up the second most exciting point.
According to steemdb.com, there is a current supply of 270,913,633 STEEM. Of that total supply, 192M is powered up. It is important to note that only STEEM that is powered up has influence on the STEEM blockchain and affects voting power (at least with stake based voting). Thus, the 68M STEEM on the open market have no bearing.
@preparedwombat posted a link that laid out the amount of STEEM that will be issued over a 20 year period. Because of the diminishing inflation rate, we are only going to see about 630M at the end of that time (19 years from now).
In two years, 270M STEEM were issued; over the next two decades, there are going to be roughly 360M more STEEM generated.
This means that almost 43% of all the STEEM created in these two decades is already out.
Now for the zinger. In 3 years, there will be over 350M STEEM issueed, of almost 56% of the total. Picture what it will be like to try to get to Minnow status at that time. It would be tough enough if things remained as they are. What will it be like with 5M people on this blockchain? Or 10M? Or 50M?
@preparedwombat was correct, there will not be enough STEEM down the road for everyone to grow their accounts. This will get even tougher if the price of STEEM is $15 instead of $1.50. At that price to buy @ned's stake and power it up will require $22M as opposed to $2.2M.
The moral of this story is powering down is very costly. It is time for every person reading these words to power up as much as possible. Do whatever you can to get more SP in your account. Failure to do so will only make it tougher, it not impossible, in the future.
There will come a time when Dolphin and Minnow are heralded positions on this blockchain. We are going to see a time when the larger accounts cash out. That is the natural flow of financial systems. There will be a point where the return is simply too great for those who were in early.
As they exit, the lower tiers move up in influence. We noted how it will be harder to achieve the same positions in the future, either via purchasing or earning. Hence, each position achieved today is more exalted than most realize. A few hundred SP might not seem like much until you consider the idea of what it will be like to reach that level with 25M people all fighting over the same reward pool.
The bottom line is that every SP is precious. You might not realize that today but you will in a few years. We are all awaiting HF20, the time that, if I recall, the sign-up process will be automated. This could open the floodgates to people joining this blockchain. STEEM is starting to gain a bit more attention, especially among the anti-establishment crowd. The censorship of Google and FB is making some waves. People are looking for an alternative.
A final point that I want to make is that all the applications that will be creating a SMT will require bandwidth for the users of their sites to operate. This means those apps will need to buy STEEM to cover the necessary bandwidth of their users. We are already starting to see a limited supply, a fact that, based upon these numbers, is not going to change much. In fact, it is only going to get worse.
To me, this means there is only one direction things can go. As more is powered up, there is less on the open market. That means Steemians with their stake in SP will be the major beneficiaries. A simply supply and demand equation leads to this outcome.
As long as the development keeps going, which there is no reason to think it will stop, we will be golden.
We should be, SP might be rarer than gold in a few years.
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