A Few Observations on the Falling Price of Steem

As Steem continues to lose value, Steemit users change their habits.

I'm preparing an article on the reasons why the price of our currency keeps falling. In the mean time, I'd like to share a couple of observations, which I will be grateful if you comment on.

Articles are paid in SBD. Which means that the weaker the exchange rate is, the more Steem (and Steem Power) we will receive. This is the perfect time to invest in SP, if you both expect Steem to recover its value and want a bigger share of the Steemit pie (SP is like shares in our network).

The above stated means that the weakest our currency, the more incentives for optimistic authors to keep posting original content. However, there's a point at which no one will be willing to post for (almost) free. This moment will probably coincide with an "insane" exchange rate between SBD and Steem - something the founders of the network will do everything to evade. It's a form of hyperinflation, which devaluates Steemit at huge rates.

Optimistic whales want to remain whales (as compared to those powering down and preparing to abandon ship), hence a weak Steem is not something they really enjoy at the moment. They can influence the price positively by creating demand for our currency. There are two options - invest more money in Steem or try to keep Steem as SP in users' wallets (there's also the third option of offering a unique product or service, in exchange for Steem, but this is outside the scope of the current article).

Image courtesy of its respective (excellent cartoonist) author.

There's a non-conclusive experiment I've been running for the last two weeks. The first week I've posted all articles with 100% SP payout, while in the second week, I've opted to receive SP, SBD and Steem. I had several times better income in the first week, with whales and their bots almost consistently upvoting my articles. In the second week I had only two well paying articles, despite posting similar content, at similar hours.

Although non-conclusive, it wouldn't be surprising that whales and their bots would favor upvoting 100% SP articles, in the hopes of increasing or at least keeping the price of Steem up.

If whales prefer to keep all user earnings as SP in their wallets, this effectively turns authors into slaves ("working pro bono"; we now even have the option to "Decline payout".) for Hive account@dan, Hive account@ned and anyone seriously invested in the network, with the promise that if Steem eventually goes up, Steemians will be rich and influential on a multi billion dollar social network. Alternatively, the time of several hundred thousand people will be wasted on an interesting cryptocurrency experiment, while the authors can sell the domain for a couple of million, to cover any expenses accrued.

I'll be glad to hear what you have to say or add to the above list. As I said, I'm also working on an article on the reasons for the falling price of Steem, which I will post later on.

Check out my previous articles!

I offer Professional Translation and Editing Services in exchange for Steem.