How create value on Steem OR How @sbdpotato (and @burnpost) is hurting Steem more than it is helping


This is the final part of my argument against @sbdpotato initiative. if you want to read the other articles about economy laws and about how SBD peg works


azt49l.png

Now it's time to talk about the most important part of all this debate revolving around @sbdpotato (and also @burnpost): Is it creating value for Steem?

Both initiatives are being sold as something that will improve the price of the SBD and STEEM, and that this will be good for the platform because it will attract more people to the platform. So, let's talk about is.

But first, we need to understand a very important concept:

Price vs Value (Aren't they the same thing?)

No. Price and Value are two different but interconnected concepts, especially when we talk about financial assets.

Here is wikipedia definition of each one:

A price is the quantity of payment or compensation given by one party to another in return for one unit of goods or services.

Economic value is a measure of the benefit provided by a good or service to an economic agent.

This means that the price is what how much money someone is willing to pay to receive something of value.

If the price of "something" is lower than the value, then the "something" is cheap. If the price is higher, then the "something" is overpriced.

Valuation (How market analyst define if a Stock price is cheap or expensive)

When you see the stock price of a company like Apple (APPL) do you think it's already too expensive and not worth buying?

jufysh.png

Looks expensive right? Most people would think that it wouldn't be worth buying Apple Stocks because it was already "too expensive".

Here is the catch: That price is from September 2018. Here is what happened to Apple stock prices until today:

gw0ofp.png

So, whoever bought Apple stock at that price, would have something like 50% of profit today.

Market analysts have a way to find out if the Stock price of a company is cheap or expensive, no matter how much the price have already risen.

The process they use is called Valuation that is about analysing everything that gives value to a company.

This includes Physical assets, financial assets, how many clients the company have, how is the economic sector the company is active, what is the sales expectation, what projects the company have, how much debt and if the company is able to pay it, and a lot of other financial/economical stuff.

Then they divide the company value by the amount of Stock Shares in existence, and the find what the price of a Share should be.

Don't be confused again with what is price and what is value.

But Steem isn't a company, we can't make a valuation analysis.

Yes, you are right. The blockchain isn't a company with stocks on the market (although there is Steem Inc., but that is another story).

But there is another concept that is intrinsic to what Steem is about: the Network Effect.

Definition by wikipedia:

A network effect (also called network externality or demand-side economies of scale) is the effect described in economics and business that an additional user of goods or services has on the value of that product to others. When a network effect is present, the value of a product or service increases according to the number of others using it.

The Steem blockchain (and it's front-ends) is essentially a social media/blogging/content platform, and a big part of it's value comes from how many people is using it, so the network effect have a big impact on how we can understand the value of Steem as a whole.

Let me quote wikipedia again:

The network effect can create a bandwagon effect as the network becomes more valuable and more people join, resulting in a positive feedback loop.

You convice a friend to join Steem, who convince another friend, and so on, and eventually some of them will buy STEEM/SBD because they think the will receive good value in exchange for the price they paid (therefore, creating real demand).

People will join (and buy STEEM/SBD) if they receive value in return

Ask yourselves what kind of value you expect to receive you are part of social media/blogging/content platform?

  • Facebook have social interaction (kind of)
  • Instagram have social interaction and photography related content
  • Reddit have content split in subreddit for whatever taste there is
  • Quora have questions and answers content
  • Youtube have video content
  • Twitter have content for people with Short Attention Span

And what about Steem? What do we have? You might be amazed witht the answer:

We have all of the above!

Yes, we do. But the question is: Where are they?

If you are an old Steem User, you might not even care about the Trending/Hot page, but you should.

You should care about it not as something that you will look for content, because with time, everyone start to be part of smaller communities inside Steem.

But the Trending and Hot pages are what outsiders see that is highlighted on Steem.

The outsider view

The big question here is:

What will an outsider see when they reach Steem? Is it interesting? Will he want to come back another time?

Honestly, i don't think so, if all they see is potatoes and bonfires, along with thousands of articles saying how awesome Steem is, or how the STEEM price will "moon soon!".

I don't think this kind of content attracts a lot of people...

People want to see cat pictures, the funny viral video of the moment, well written articles about an interesting topic they like.

And to add salt to that wound, Steem had a bad reputation since the beginning. Maybe it's time to change that.

What really brings value to Steem

Now Steem is amazing. Better yet, Steem have an amazing potential.

If you look around there is a ton of projects being built on the blockchain that can appeal to many different people:

Steemit itself ad it's communities - A content/social plaform
@steemhunt - Product discovery platform
@splinterlands - a card game that uses the blockchain for the actions
@dlike - a place to share that cool site/news you found
@steempeak - a really good front-end
@esteem - a great mobile front-end
Musing.io - a platform similar to Quora
@dtube and @threespeak - platform for video content
@drugwars, @steemnova, @epicdice, @holybread and a lot others - Games (real games) built on Steem
@engrave - Filter you content to create you own blog separated from the content "noise"

And a lot (really, a lot) more.

Now this is the kind of stuff that make people want to join (and create demand).

It's time that we start to care about VALUE and not PRICE

If there is value being created, the price will follow it!

Now forget about STEEM price, how big is your stake, how much curation reward you are receiving by upvoting and supporting @sbdpotato and @burnpost and as yourself:

Are these projects creating value for Steem?

If your honest answer is no, then please, stop supporting them and direct your stake (in whatever way you want) to any of the really interesting projects being built on this blockchain of ours.

Conclusion (the final one)

I have no doubts that @cryptodrive and @smooth are really smart and savvy, and that they have good intentions running @sbdpotato and @burnpost.

But it is my honest opinion that their focus is totally wrong. They are gathering support and attention from a lot of people (big and small stake holders), directing energy, time and money to something that i think it won't have any effect on the price of STEEM and SBD, and worst of all, aren't creating real value that will make Steem interesting to potential new users.

I still believe that Steem is an amazing platform, and have a huge potential to grow, but if there isn't a change on the culture, specially from the #witness, all this potential will go down the toilet, and Steem will become a ghost town where it's inhabitants are more worried about fighting for coins they find on the ground, than attracting more people to improve the city economy.

The worst sin of the Steem blockchain and most part of the community have commited is resumed in this image:

mspsqt.png

Since the beggining, it was always about how much money you can make on Steem, and not about how much value you can receive. And this is why Steem was seen (and still is in come places) as a Scam than something truly valuable.

In the end, what i am asking everyone that is still supporting @sbdpotato and @burnpost to rethink about it, and consider directing this support to any of the other projects you like. Long term, it is the best way to use your stake.

Give support to something that add value, not about something that care about price.

Or, you can follow @whatsup advice and join the #milkandtators campaing, and contribute with real engagement around here.


That's all i have to talk about on this subject, and it will probably take a long time before i write about Steem related content.

But if you like what i wrote, but the post passed the 7-day payout, please consider watching this ad for 5 seconds.


Comments 24


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27.01.2020 14:00
0

Thanks for mentioning eSteem app. Kindly join our Discord or Telegram channels to learn more about eSteem, don't miss our amazing updates.
Follow @esteemapp as well!

27.01.2020 14:01
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Lol @steemhunt. When they actually discover products, let me know.

@dlike lives below its potential. It’s plagued by people submitting links for votes.

@musing is pretty much dead last time I checked. The team literally had no plans besides hoping for generous delegation.

The platform needs more social applications that can sustain itself without mooching STINC delegation.

Free delegations only create mediocre products that go nowhere except for voting on people planning on cashing everything out.

27.01.2020 15:23
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I found some interesting stuff posted on @steemhunt that i doubt i would find another way. So it kind of fill an interesting role as a social platform.

about @dlike, yes, i agree. People still abuse the system as always (and there will always be people doing it), but, it is a good concept that revolves around sharing content instead of creating, wich is another important layer social platforms.

@musing i agree. i don't use much, i mentioned it mostly because i like the concept.

Anyway, i just mentioned projects i know and use more, but the point is that there is a lot of better ways for "whales" and witness use their stake than vote in project that don't add anything of value.

Free delegations from Stinc can be a way to jump start some project, but the way it is being done, yeah... it sucks.

Stinc should have better criteria on selecting projects, and creating some kind of commitment contract, maybe even a smart contract that will remove funds from the project if they don't meet some defined objectives.

27.01.2020 15:33
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Yeah there's @delegationtrust, but they haven't been doing much lately.

So, status quo I guess.

27.01.2020 15:35
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great post! I also find that the posts aren't actually effective either. SBD at 1$ will happen with the next upward swing in crypto with or without these burn posts.

Directing these funds to contributors would be a much better decision. Let's go for it :)

27.01.2020 15:36
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The SBD system is already designed to self regulate itself. A better way to make the system work in favor of bringing SBD price back to 1 USD is to let people know when it is profitable to use the convert function. (basically, when the blockchain is paying more STEEM per SBD than the market)

Even if these initiative had any real effect, it would be so small that it wont matter when there is a price movement in one direction or another.

27.01.2020 15:49
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Agreed.

27.01.2020 22:42
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oh and...
@tipu curate

27.01.2020 15:36
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I hope these burnt spud projects are not trying to take credit for the prices going up recently. That is due to market forces. There have to be good reasons to buy Steem apart from pure speculation. You can get a reasonable return by powering up and curating, but that may be too long term for some.

27.01.2020 20:02
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The Steem blockchain (and its front-ends) is essentially a social media/blogging/content platform

Well that’s certainly the case now, but it could well be a very different situation a few years down the road.

28.01.2020 00:55
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The Social Layer is the foundation of Steem blockchain, and will always be around, no matter how it will evolve in the future.

28.01.2020 01:44
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Milkandtators? Check out this automated account @ecoinstats and learn what is Steem milking. I noticed that most of sbi jerks is downvoting sbdpotato, very funny. Are you one of them?

28.01.2020 04:34
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@mmmmkkkk311 is attempting to use his flags to intimidate Steemians into abandoning their support for @steembasicincome.

He baselessly claims it is a "ponzi scheme" which just shows that either he doesn't understand how it works or (more likely) he just doesn't understand what a ponzi scheme even is! And the blatant hypocrisy in him trying to fight "vote selling" when that is exactly what he did with his bidbot! As as bidbot owner with over a dozen alt accounts he is in no place to judge what is right or wrong here on Steem. Now he is mad that his scam has ended. So like an upset child, he has decided to take out his anger (caused only by his own failures) on other innocent people. Making him nothing more than a big bully!

MK admits to running a bidbot

[Actual account who was "wrecked by @mmmmkkkk311 (for holding sbi shares)"](https://steemit.com/@yapcat)

bully.png

I am here to counter @mmmmkkkk311's bullying. I will upvote every post/comment that he downvotes. You can support my anti bullying upvotes by delegating (links below) Steem Power to @ilovemk311. And you can help keep this message visible by upvoting this comment or by purchasing SBI shares for @mk311isabully which will help to counter the downvotes that @mmmmkkkk311 will surely send my way. Which I highly encourage him to do as the more downvoting power he wastes on me the less he can use to downvote the real content creators here on Steem that would otherwise become his victims!

Choose a delegation amount

5 | 10 | 20 | 50 | 100 | 500 | 1000

external-content.duckduckgo-1.jpg

I ask YOU my fellow Steemians to help me take a stand for our Steem community.

With this jerk bullying innocent people we are seeing many great content creators leave due to the drama and negativity that @mmmmkkkk311's downvote campaign brings to the blockchain. While he claims he is trying to defend his investment he is actually unwittingly destroying it.

SBI is an initiative that has done nothing but help promote onboarding and community building here on the Steem blockchain. Let us not turn our back on it out of fear for getting downvoted. Instead lets stand up for this great initiative that has helped so many people and helped the Steem community to grow and thrive!

Thank you.

28.01.2020 07:35
0

@mmmmkkkk311, what value have you brought to the platform? What do you produce that brings value to the platform? I've seen nothing from you since you started your crusade. You're empty, man, nothing but a fragile shell.

28.01.2020 23:35
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Hi @phgomo thanks for taking the time to write this, I want to preface my reply with a suggestion that if you do further posts on this topic that you make them decline payout posts if indeed your intention is for the good of the community and not for rewards and making a name for yourself on the back of these initiatives. That is something of concern ofcourse and not meant to offend in any way.

Firstly @sbdpotato has nothing to do with price or value, it is purely to reduce the oversupply of SBD so the debt ratio can be reduced below 10% and safe for other members of the community to do conversions without suffering the haircut loss.

If you look at the @sbdpotato api https://sbdpotato.herokuapp.com/conversions it shows that about 5500 sbd are being converted every 3.5 days and growing each day, this averages down to 1571 SBD converted per day.

Just recently sbdpotato reached a milestone that it is pretty much neutralising inflation, if you see https://steemd.com/@steem.dao around 66 SBD are printed per hour which is around 1593 SBD per day, as the @sbdpotato fund grows it will actually be reducing SBD inflation instead of just keeping it at bay. I don’t agree that either @burnpost or @sbdpotato are deterring investors, just recently there was a massive 10 mil steem deposit that pushed the price up to 20 cents temporarily.

This account here https://steemd.com/@cherrytomato2 is also recently stacking STEEM and a increased holding to 3 mil, all this is happening while potato and burnpost are allegedly chasing away investors due to the trending page posts. I would argue that investors see these posts and realise there are people trying to fix the Steem economy and feel more comfortable to invest.

I myself feel more comfortable holding my stake now that the @sbdpotato initiative is in place.

I agree with you that stakeholders should support Steem based projects, I don’t however agree that such support needs to be mutually exclusive, they can and should support all worthy initiatives including @burnpost and @sbdpotato. We have reduced trending page pollution down to one potato post per day capped at $20, if the trending page can’t absorb one such post per day then I fear we are already at the stage where we are “fighting for pennies” to borrow a phrase from your post.

Potato needs to convert circa 1 million sbd to restore the debt ratio, the Steem price rises this value required becomes less, when steem pumped to 20 cents, less than 300k SBD needed to be converted to fix the debt ratio. After 3 months when potato has accumulated 25k sbd as per the proposal, it will be converting SBD at a rate of 25k every 3.5 days. The posts help get there faster.

What would help get there even faster is if a majority of trending page authors would set @sbdpotato as a 5 or 10% beneficiary and stakeholders were to change their voting habits to vote for posts that give back to economic initiatives such as @sbdpotato and @burnpost rather than 100% lining the pockets of the post creator, if the support is great enough we could see the debt ratio and peg fixed in as little as 3 months or less.

28.01.2020 08:19
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@xpilar thanks for your memo, see above for my reply

28.01.2020 08:23
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Hi @thecryptodrive

It's good that you provide the explanation so that others who read @phgnomo's post can understand why we are doing this. They only see this from one side and not the whole of it

28.01.2020 12:36
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Actually i am providing the other side.

@sbdpotato and @burnpost have been running for a lot of time now, and i haven't seen any discussion being brought up about how effective or good it is.

Now people have two sides of arguments to decide for themselves.

28.01.2020 13:52
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Yes @phgnomo that is correct. people have to make their own choices.
But also need to spend some time on info given earlier about this project.Posted with ![](https://cdn.steemitimages.com/DQmbroYujK9LNd2s8zDKPUCADmseyJDuNbhwBPrrF7xM8FL/logo-comment.png)

28.01.2020 20:20
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Thanks for coming by and joining the discussion @thecryptodrive!

if you do further posts on this topic that you make them decline payout posts if indeed your intention is for the good of the community and not for rewards and making a name for yourself on the back of these initiatives.

Sorry, but i don't agree. You are a witness right? And processing blocks is done to the good of community right? So, why don't you send your witness rewards to @null if your intentions in being a witness is for the good of the community?

You have costs, you might answer. I also have costs. I spent my time, energy, computerlifetime, and my brain to research and write about something that i think should be discussed more widely.

If the community think i should be rewarded for that effort, well, that is proof-of-brain working as intended.

And no, writing about the projects doesn't mean i am trying to "gain fame" on top of them. I just means i want to write about them.

Here is an idea for @sbdpotato: Why don't you decline payout from the posts and use them as advertisement to encourage people to send funds to the project instead of using the reward pool or the SPS fund? That way the rewards could go to people and projects that are building value.

Firstly @sbdpotato has nothing to do with price or value,

I also disgree here. @sbdpotato is working to try to move the prices on the market, therefore it have everything to do with price.

And the haircut rule exists to protect the STEEM price. So in a way, doing conversions at a loss is kind of hurting the STEEM price even more.

This account here https://steemd.com/@cherrytomato2 is also recently stacking STEEM and a increased holding to 3 mil, all this is happening while potato and burnpost are allegedly chasing away investors due to the trending page posts.

Well, if i had the money i would also buy a lot of random coins that might benefit from the probable bull run that is building up on the whole cryptocurrency market.

How is he investing? All his STEEM is liquid, so he is just speculating. A 10% rise in price would be enought for someone like him to drop all this STEEM on the market and make a huge profit.

Tell me, where is the value in that?

Nothing wrong with speculating on prices. It's part of the game, but you can't use it as an example of growth of value.

I would argue that investors see these posts and realise there are people trying to fix the Steem economy and feel more comfortable to invest.

Smart money see these posts and realize they might cause some short-term price surge. That is why it is called speculation.

I agree with you that stakeholders should support Steem based projects, I don’t however agree that such support needs to be mutually exclusive, they can and should support all worthy initiatives including @burnpost and @sbdpotato.

I also agree. But the whole problem here is that both projects are using the reward pool to fund themselves, not their own stake. The reward pool is supposed to go to people adding value, not trying to manipulate the price.

I agree with you that stakeholders should support Steem based projects, I don’t however agree that such support needs to be mutually exclusive, they can and should support all worthy initiatives including @burnpost and @sbdpotato.

Sure, fine. It's their rewards, and they can do whatever they want. But the posts and comments are still taking away a chunk of the reward pool.


Don't worry, this was my last post regarding this subject, my whole objective here is to provide anyone looking at these project another side of the story, instead of following big voters around like headless chickens looking for spare corn.

I really hope that you and @smooth reconsider the validity of these projects, and direct the efforts to more valuable projects.

Thanks again for the attention.

28.01.2020 12:24
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Dear @phgnomo

Thank you again for sharing link to your post and for your latest supportive comment.

Is it creating value for Steem

Perhaps I could DM you? Do you use discord? I would like to share some details about @project.hope (something I'm managing) and about ideas of bringing value into steem. I would like to hear your feedback.

And perhaps you would like to become part of our little (however quite strong) community.

Yours
Piotr

28.01.2020 22:13
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Sure! We are probably on the same channels, palner, steemua. Hit me up on discord and we talk!

28.01.2020 22:15
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Wow. That was fast @phgnomo

Find me on discord: crypto.piotr#3426 or telegram: crypto_piotr

cheers :)

28.01.2020 22:23
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