After posting a few days back on the distribution of Steem and the control the ‘Top 1%’ currently possess, (@hisnameisolllie/the-top-1-steem-v-the-real-world), a number of users contributed with some amendments that would make my findings a little more accurate. This post is going to be the best reflection of reality, from the information available.
I happened to have a conversation with a large Steem Power holder as a result of my previous article. He proceed to explain that his account was not as it seemed on the surface. Although the blockchain is completely transparent, numbers don’t tell you the true story of the users behind the accounts. His account (for instance) has (amongst other things) 10 users behind it, who trawl through (currently) unloved posts, searching for hidden gems, that deserve more attention. This account achieves very lucrative Curation Rewards, but is also providing an important service to the Steemit platform. The numbers on the surface, to me, suggested it was just one guy, with a very clever bot.
It should also be considered that, Steem is still in distribution mode. In a post I did a few days ago, I showed that the Top 10 Steem Power Holders Control of Steem Power fell by over 8% in the last week. Steem dilution rate is over 340% for the following 365days, and this dilution will, by design, hurt the larger Steem Power holders more than the smaller users. This in turn contributes to Steem being distributed more evenly over time. Please see my previous post for further explanation and discussion on these points.
So, with my disclaimer out of the way. Let’s get down to the numbers.
Steem Dilution
First of all, let’s consider the dilution rate of Steem. We are currently in distribution mode as previously stated, so that means that 800 Steem is being produced per minute. This equates to 343% increase in Steem Circulation within 365 days.
Steem Power holders receive 90% of the newly minted Steem as a reward for committing to the community, where the other 10% gets paid out in Contribution Rewards;
343% x 10% = 34.3%
This number signifies the dilution rate that will be experienced by Steem Power holder who do not Curate, Create or Witness the network over the next 365 days. Most of the larger accounts do however take part in Content Curation…
During Distribution of Steem, 50% of Contributions Rewards go to miners, the other 50% go to Content Creators and Curators (which is split 75% 25% respectively). Discounting Mining, and Content Creation (when thinking about the top Steem Power holders, because their accounts are too large for this to viabliably reduce dilution), let’s assume the ’top 1%’ are average curators…
10% x 50% x 25% = 1.25%
10% - 1.25% = 8.75%
346% x 8.75% = 30.0125% Dilution
Now, many of the larger accounts are above average Curators, because of the power their voted carry. From the research I have done though, not many of these accounts are close to covering the dilution rate currently being experienced. I think we can use this to confidently state that the Top Accounts are redistributing their control as we speak. I can also state that the top 10 accounts have redistributed over 8% of their SP control over the last 7 days.
The Top 1%
What are the real user numbers?
As I am writing this post (yesterday), there are;
Total Accounts: 49,443
Active Last 7days: 13,442
Active Last 24hrs: 4,710
There are some large discrepancies between Total Accounts and the level of activity we are seeing in these account. The truth of the matter is that, we are best place to consider the active accounts as real users. There are a lot of miners who have set up multiple account purely for Steem sign-up rewards, and not for conventional usage.
So, now we see ourselves with 7day Active Users of 13,442;
I have used data from https://steemd.com/richlist and added up the top 134 accounts MV’s. 97% of Steem is held as vesting Steem Power, so looking at anything else will make a trivial difference to the results. By this measure, the Top 1% of Steem Power Holders control 92.11%.
Another consideration is the @steemit account. This account currently controls over 50% of Steem is circulation, and is essentially the website funds, to be allocated to building out this project. I personally think there is good reason to discount this account from the calculation, which when you do, drops the Top 1% of Steem Power Holders control to 83.16%.
There is also an argument to narrow the user base further to 24hr active users. With Steemit in it’s infancy, is it really fair to compare users who are logged in all waking day, every day, with others who log in 1-2 time per week. The 1%, in my experience are logged in everyday…
Doing this brings the 2 previous measures down to 83.68% and 65.61% respectively.
We can summarise from these calculation that, depending on your opinion on, true and fair user base comparison, and whether the @steemit account can be considered to be part of the top 1% user base, the top 1% controls between 92.11% and 65.61% of Steem Power in Circulation. I am personally in the 65.61% camp, due to a number of factors already raised.
When you add in the potential dilution these users are about to experience over the following 12 months, these numbers become very palatable, very quickly..
We could see Steem Distribution pretty close to the USD$ within 12-18 months, with that distribution improving day in day out...
Steem Distribution Comparison
It easy to forget, for the active users like myself, the Steemit platform has only been properly operational for a handful of months. Comparing Steem Distribution to ‘Real World’ wealth distribution is unfair to say the least. If we did, I would state that the top 1% of American’s control (possess) over 40% of the countries wealth, and rising.
The big difference between Steem and the real world is, they are on a reverse trajectory, and both of these trajectories are by design. ‘Real world’ economic systems are designed by wealthy people, to keep their power and wealth rising in real term. The rich literally play to a different rule book to the masses (you only have to look at taxation…).
On Steem(it), it has been conceived and continues to be run by two anarcho-capitalist’s/volutarist’s, on a transparent blockchain where the rules for everyone involved are the same. Because of the high Content Creation rewards, this ensures that ‘the 1%’ cannot keep accumulating wealth at the expense of the masses, in real terms the wealth goes the other way. This is happening as we speak, and will continue to happen as long as Steem(it) exists.
Founders Steem Power Control
I thought I would leave you with a little table to consider when thinking about the distribution of Steem currently. Now, I know that Steem is more than Steem(it), however for now, that is the primary use case we have for Steem, and it’s an interesting comparison nonetheless.
Humour me with these comparisons, and consider that ‘personally’ the founders control 6.33% of Steem Power between themselves at this early stage (with that number set to fall over time). Mark Zuckerberg still find himself with a ~25% stake in Facebook, after hitting a valuation of $360bn+ and being in business for 12 years.
Steemit is already the most democratic Social Media Site in the world, and we will only see this democracy get broader and fairer as we move forward..
Sources:
http://www.freepik.com
https://steemd.com/richlist
https://steemd.com
https://steem.io/SteemWhitePaper.pdf (Pages 35 onwards)
Dilution: @hisnameisolllie/steem-dilution-rate-explained-currently-much-higher-than-you-might-think