Building Steem and the growing long tail

Last night I wrote an update post about the health of the staked users which looks at the numbers across bands and it showed that the Hive account@tenkminnows initiative has made a significant difference on the lower end of the scale. I use the term 'lower' because of the staked amount, I don't really see it as a class system at all but, it is often termed that way, including by myself at times. Perhaps, High, Mid and Low staked users would be a better range of terms.

But, what a lot of people do have confusion with is just how much Steem there is available and perhaps how the pool behaves over time. As I have mentioned before, Steem has a decreasing inflation rate of 0.5% a year of new Steem pouring into the pool. It is currently at 8.5% I think and that means that this year, there will be ~26,000,000 Steem available from the pool which is spread in various ways (post rewards, curation, comment reward, interest, witness rewards)

The current supply of Steem is 305 million and if all SBD was converted now, it would create 20 million more. 325 million Steem seems like a great deal of Steem to well, all of us and it has a current market valuation of 150 million dollars.

But, what would happen if there were 1 million real users? I say real because as we know, there are definitely not a million now even though there are about 1.3 million accounts created on the blockchain. As I said last night, there are 80,000,000+ Steem on the exchanges and if that was distributed equally, it would create 80,000 accounts with 1000 SP or only, 160,000 minnows. That really isn't a great deal is it?

But, many think that the middle class is going to be in the 5000 SP range but, I don't think that is going to be the case at all. At the moment, there are about 1400 accounts with over 10,000 SP and the higher prices climb, the less likely there are going to ever be many more than that as many are not going to pay 100,000 for 10,000 Steem. But, this doesn't matter. There are about 25,000 accounts between the range of 100 and 10,000 SP on the platform and this is going to be the area where most of the growth happens and obviously growth will be in the lower reaches the most heavily. That means the +10k SP accounts are about 5%

This is the thing with the "whales losing their power" as they are percentage wise going to slowly have their stake eaten away, even as it increases in value. This is because that even though a whale might be a great earner, it is an individual account and is well and truly going to be outpaced by all of the smaller accounts that earn less, but much more widely. This means that more accounts come in and get some stake to build a mass of Staked SP in the lower reaches and those accounts are going to care less and less about rubbing whales for votes and instead be actively using their stake in numerous ways on the platform.

In time, while there is currently that 5% of +10k accounts, that is unlikely to grow further but the 100-10,000 will see significant growth meaning that there might be 100,000 accounts in that range with most being in the few hundred Steem power bands. Percentage wise this means that those 10k+ accounts will only represent 1% of the platform. But, let's have a look at some of the numbers.

If there was 100,000 accounts that each had 100 Steem, that would eat 10 million Steem from the supply. But, that range will also have accounts with larger amounts.

For example, there are currently 937 account with 5000-10,000 and if we take a mid-range of 6500, that is 6,559,000 of Steem. There are 5181 accounts with 1000 - 5000 SP and if we take a midrange of 2500, that is 12,900,000 Steem. (Maybe Hive account@abh12345 can tell me how much Steem is held in the 100 - 10,000 SP account range?) These are the current numbers of Steem holders but, these are growing all the time.

The more people that join Steem, the more low staked users there will be and the less impact a high staked user will have on the platform as a whole. Yes, they will be able to deliver massive votes at some point but, those votes will have less impact meaning that it will be like Hive account@smooth and Hive account@abit's Whale voting experiment that led to linear rewards, only on a mass scale. And the more in, the faster the process goes as it builds momentum.

So, there are currently approximately 305 (+ virtual 20) million Steem in the ecosystem and in the next two years, another ~50 million are going to be injected in through the pool. That makes about 375 million total Steem in two years. What happens if there are a million real accounts?

Well, lets say most things remain equal and people in the top don't sell, Steemit Inc hold something like 50 million of those Steem, Freedom owns another 10 million, Blocktrades another 5 million and a few other prominent whales a few million each. That brings the total Steem down to about 300 million again. If distributed evenly across the million active accounts in two years, that means there would be 300 Steem each and as we already know, there are already ~11,000 Accounts above 500 SP now and they reach all the way up to whale status.

So currently, of those future Steem there are around 200 million of them vested which leaves what is to come into the pool (50 million), what is on exchanges (80 million) and the other liquid (24 million) still available in the next two years to Vest. That is 154 million unvested Steem by that point and that is what is up for grabs, either from the 50 million in the pool or, the 104 million unvested currently.

That means that if there were in that time another 900,000 accounts to come into Steem, they have direct access by buying or earning and if spread equally, could have 174 Steem each.

So, where is the mid range stake? Well, if it miraculously happened that all of that Steem went to those 900,000 accounts, it would mean 40% of all vested Stake would be in that group (Remember that this would be with zero on exchanges) but as we know, there are obviously going to be more people who are already here earning, but in comparison to those to come, these numbers are going to be relatively insignificant, even though their stake is going to make a massive impact on the platform.

A Whale account might have a massive vote but with a million active users, they aren't going to be able to spread it far and, they are much more likely to delegate it out or use it in various ways to fund the platform, for example through the SteemDAO that Hive account@blocktrades is currently developing and finishing up. Even the orcas and the larger dolphins are going to have trouble using their stake and will likely do much of the same.

Who will mostly be active is all of the stake below 10,000 as they will be using the platform for a whole range of things that doesn't require large amounts of RCs or Stake itself. All of the social activities, the games, the niche content, the forums and the various other activities yet to be developed. Yes, they will still be able to earn and that earning might be very healthy for some accounts because with so much demand, the value of Steem wil be significant and there will be many more ways to use it than today without needing to take it to fiat.

Well, what happens with 10,000,000 active accounts then??

Everyone here now with some stake is going to be a one percenter in the future of Steem.

Taraz
[ a Steem original ]