Interesting...
The true purpose and scope of Steem will be revealed in a couple of weeks, but for now it is open for everyone to look at the code.
Perhaps something like a decentralized alternative to threaded discussion forums, e.g. Reddit self posts (though limited to STEEMIT_MAX_COMMENT_DEPTH == 6 nested comments, which I guess is a reasonable number),
except with the distinguishing feature of economic rewards for good comments ("What do you mean internet karma points don't have to be worthless?"
).
Though perhaps that could backfire as well: redditors take karma too seriously as it is even though it currently provide no economic value whatsoever. But it would be fun to see how economic incentives modify social behavior online.
I look forward to hearing more about this project in the future.
Some additional (long) thoughts on the project:The SBD (which seems to be a USD pegged asset with a possible interest rate bonus on top) is interesting. There is a DEX on the network with just a single market STEEM/SBD (plus there are subsidies to liquidity providers which is great addition), but yet it seems pretty clear that SBD is not BitUSD/Smartcoins. Specifically, there is no SBD borrow with collateral mechanism available. It is possible to convert SBD to STEEM but the blockchain just destroys the SBD and prints enough new STEEM to satisfy the conversion at an exchange rate (after a 7 day delay) at the given median price feed provided by the witnesses. Thus, I think it is safe to say that all STEEM holders are effectively forced to take the "short position" against the SBD. By holding STEEM they are betting that its price should outperform the USD plus blockchain-declared interest rate. And this is despite all the other inflation of the STEEM supply to pay for block producers (witnesses and occasional PoW miners), the liquidity provider subsidy, the content/curation rewards, and especially to try to keep the vested STEEM balances deflationary. The one upside is that SBD longs cannot just demand to be issued as much SBD as they want, so the STEEM holders' exposure to losing on the STEEM/SBD price change gamble is somewhat limited. It seems SBD are only issued into existence as a reward for comments (and even then only half of the comment reward is in SBD while the other half is provided through VESTS). And the total amount of annual inflated STEEM funds dedicated to comment rewards is limited to 5% of the total STEEM supply (another 5% of the supply goes toward curator, i.e. comment voter, rewards in the form of VESTS).
It seems to me that STEEM holders will be getting diluted like crazy to pay for all of this. But I guess that is what VESTS are for. You give up your ability to quickly dump/transfer STEEM on demand by vesting your STEEM in order to avoid the extreme dilution of your stake while you hold. And in fact your percentage ownership of the total stake should actually increase as long as less than 90% of the total STEEM is being vested in the network (though apparently more than 80% of the current STEEM supply is already vested, so who knows how likely it actually will be that the network will normally be vesting less than 90% of the total STEEM supply).
It seems like an interesting economic experiment.
I think it is particularly interesting that the nature of VESTS (2 years until you can fully withdraw all of your funds) means that it would be foolish for exchanges to try to vest any STEEM deposited by their customers. This means two things:
1) the exchanges would not have the power to vote for witnesses (sinces only VESTS assets have voting power) which is good for network security; and,
2) it is foolish for the buy-and-hold investors to keep all their stake on exchanges in an attempt to avoid the inconveniences of using the client software because that would force them to keep all of their stake in the highly inflationary STEEM asset rather than the more profitable VESTS asset (thus they have an economic incentive to download and use the client, which is a great thing).
It isn't completely clear to me where the revenue for this DAC would come from. All that inflation needs to be paid for somehow in the long term. The obvious answer is that the revenue could come from transaction fees on posting comments. And that could certainly be a viable business model for the DAC if people are willing to pay per post. But nickel-and-diming people per post is a pretty annoying user experience, so it isn't clear if that business plan could actually work in reality. There is potentially an alternative strategy, which may already be what this DAC is aiming for (I don't know for sure, I wasn't able to tell from my brief review of the code). People might be willing to buy STEEM and turn it into VESTS even if it isn't as profitable of an investment as other altcoins, simply to gain access to the services provided by the DAC. The rate-limited free transaction mechanism being added to BitShares could also let this DAC allows users to submit comments and posts for free, but at a limited rate which is proportional to the amount of VESTS they hold in their account. Effectively, users would be paying for the comments/votes through the lower returns on their "investments" compared to the returns they would have gotten had the comment/vote transaction had a transaction fee. This solves the nickel-and-diming user experience problem, but it is still not clear whether users would find the higher costs (even if hidden and implicit) to be justified for the unique features of decentralization and also profiting from karma, or if they would rather prefer sticking with the existing centralized systems that are cheaper/free (or more precisely: paid for by advertising).
Finally, I find the low-profile/vague announcement strategy used by thereverseflash to be both amusing and perfectly rational.
Creating a new mining algorithm only to highly deemphasize it in favor of DPoS only 1 month after launch,
underselling the potential and ambition of this DAC (it is presented as yet-another-simple-alt-coin and not as an attempt to create a decentralized Reddit),
leaving in technical barriers to joining in on the initial mining; it all makes sense when you read
this blog post by bytemaster and accept it as the guidebook for launching this DAC.
Now the question is will bytemaster's strategy work, or will it cause the Bitcoin community to treat this DAC like a pariah and stubbornly refuse to use it while yelling out words like "instamine." I can't wait to find out.
Topic: [ANN] [STEEM] Introducing Steem, Looking for Witnesses / Miners (Read 131224 times)
