I recently came across an article written by someone interested in looking at the Bitcoin Energy Value vs the Price and using it to plot some graphs based on the amount of energy expended to mine and secure the Bitcoin network, vs the price.
I've long hypothesised that Bitcoin is effectively just a derivative of energy since it's creation involves the expenditure of it to not only mine the Bitcoin but also secure it.
I wonder if we can find some equivalence for Steem, specifically with Steemit.com.
The argument for Bitcoin Energy Value (the amount of energy spent on mining, maintaining the network) having a symbiotic relationship to the Price(Bitcoin) makes a lot of sense when we think about opportunity cost of energy spent for other value creation and production. Clearly, people are more and more willing to pay for energy directed towards mining Bitcoin as the value of a decentralised, self sovereign, immutable store of value, and medium of exchange is worth -atleast- as much as the energy they used to mine and secure the Bitcoin network.
Can we make a comparative argument for "Brain Energy time" spent?
We could posit that the more "Brain energy time" spent, the more valuable the currency should be. Price and energy are also mean reverting such that if/when price appreciates significantly but the amount of "Brain Energy Expended" fails to rise proportionately and in tandem, it should result in the price reverting back to the mean of the two metrics.
So, if this exercise were to happen, this is a crude way that I think we could begin to go about it.
First, we'd need to find the equivalent to "Bitcoin Energy Value" for Steem.
Time spent would be one of the arguments for the "fiat factor constant" because any amount of work done in producing an article has a fiat opportunity cost for doing work elsewhere.
Other assumptions I can think of "off the cuff" for dynamics with respect to just Steemit.com are:
"Quality" of the posts have some kind of relationship to the time spent. The longer the time spent, the better the "quality."
To measure quality, we could choose some basic tests for metrics which generally hold true for quality articles. One such test is the "English Level" test where by an article can be scanned to return a level of English comparable to various levels of education - Middle School, High School, Undergraduate, Post Graduate, PhD etc.
The "English level" along side other inputs such as the number of words and number of pictures can then be weighted accordingly and a crude "quality" number can be measured on each and every post.
We then find an average "quality of content" across all posts on the platform each day, and plot them.
Since we have a good history of pre bubble, to post bubble price action. This can serve as the reference point for the "Brain Energy(Platform wide)" showing where the brain energy exerted begins to level off and where that corresponds with price action.
What do you guys think? I think it's worth a deep dive empirical study for a Big Data analyst.
My expectations are that if we were able to find a relationship between Brain Energy Expended and Price of Steem, we would find that it would actually follow (along with other on chain metrics) that when price declines, the amount of brain energy expended on average would be lower. People are obviously going to spend less time producing their posts if the expectation of rewards is low. On the contrary, if the price is higher, then an arms race for higher quality posts will ensue and the Brain Energy Expended would rise.