First things first. This is far from at attack on @sigmajin. @sigmajin has been an active member of the community, commenting on many of my post. Whether agreeing, or disagreeing, I appreciate their contributions.
The post I am rebutting can be found here.
It’s generally a claim that my maths here and here is ill thought out, and wrong. In this post I am going to ignore theoretical calculations and drill down into what has happening (and why it has happened) over the last week..
Problem
The biggest problem for both of us is that, as user base swells (in the last 3 days Week Active Users has increased 13.6%) each new user is starting at pretty much ZERO (well $7…), and synthetically pushes a number of large account into the 'top 1%’.
As you can see from this Screen Shot 87% of accounts have ‘Newbie’ Status, that is, account value between $4-$40.
@sigmajin point referring to,
’Top 1%’ of accounts makes a poor centralisation statistic
is correct. However there is not a fair way of representing Distribution at this juncture. It couldn’t be anything but top heavy. I started using Steemit 2 months ago when there was 300-400 daily active users, now there is almost 7,000. Generally, my Steem Power Holding are going to be bigger than someone who started after me, because my contribution will have been that much bigger, to date… It is too early, however what matters is the trajectory we are on…
For this reason, in my Weekly Statistics Post I have decided to add a measure which follows the Top 100 Accounts Control of Steem Power. Emphasis being on Control. Because Contribution rewards for Curation and Holding Steem Power are weighted to users gross Steem Power Holdings, they are of coarse going to get the ’Lions Share’ of new Steem created in Gross terms, however what is important is whether the Top 100 accounts ownership in net terms is decreasing?… If it is, this will lend credence to the claim (made by myself, and many other users) that Steem will become distributed away from the Top holders, over time..
I glossed over the outcome of this Statistic in this weeks edition, so I thought I would drill down into detail a little further;
Number don’t lie…ONLY time will tell…
Top 100 Accounts Million Vests (MV) Control
WEEK 1
A bit of background to these numbers. I pulled these numbers off Steemd Richlist one week apart, and will continue to do so in my Weekly Statistics Post. I have made 2 Calculations, The first calculation is for the Top 100 Accounts, the Second is for the Top 100 Accounts less @steemit account. The reason I have made this distinction is that, the @steemit account is the developers account which controls over half the Steem Supply, and as far as I am aware will be used to develop the Steem(it) concept moving forward. This account will thus, be distributed slowly over time.
Depending on which calculation you prefer, the Top 100 accounts controlled either 90.09% or 78.84% of the Steem Power (LAST week) in existence.
WEEK 2
As you can see, over the coarse of my first week recording this Statistic, The Top 100 Accounts Control of Steem Power has fallen by between 0.35% or 0.52% depending on which calculation you prefer.
Why has SP Control of Top 100 Accounts Fallen….?
The @steemit Example
Now, a very interesting account to look at individually is the @steemit account, which is essential a non functioning account in terms of Curation and Creation.
This shows a net fall of 0.85% in Steem Power Control over one single week. This account is in Power Down mode, and does not contribute to the Steemit platform, which is why we see it's fall in Steem Power Control much greater than the average Top 100 account... This represents the costs of being a passive Steem Power Holder...
Powering Up/Powering Down:
There are a number of users across Steemit both Powering Up, and Powering Down. This week, the numbers have been weighted to Powering Down. This has resulted in the number of MV reducing by 2,338MV over the past week from 407,773 to 405,435. Because MV represent as share in the 'pot' of Steem making up Steem Power, if many users are powering down, everyone who is not Powering Down is gaining control of Steem Power.
This is another area that aids in the Distribution of Steem. Users Powering Down and selling, distribute Steem naturally. The fact that 14 out of the top 25 accounts were Powered Down last week, lends further to the claim that Steem is being Distributed away from the top down.
Inactive Top 100 Accounts:
When you go to Steem Whales it’s interesting to see how many of the accounts are completely in-active on a Curation and Creation measure;
Around 35% of the Top 100 accounts are not Curating or Creating meaningfully.
Around 58% of the Top 100 accounts are not Creating Content.
These accounts are all donation their dilution back into the Steemit Ecosystem, which has resulted in Steem Power distribution weighted between 0.35% and 0.52% away for the Top 100 in the last 7 days. This is the penalty for being an inactive user, the penalty of being a passive Steem Power holder.
The Creation Problem for the Top 100 Accounts:
Let’s hypothetical say that there is a users in the Top 100 with an account worth $1,000,000 in Steem. IF the price of Steem Remains Constant;
Rough Numbers
Account Value: $1,000,000
Current Dilution Rate: ~0.9% per day
Dilution Per Day: $9,000
Steem Power Rewards: 90% of Dilution
Steem Power Rewards: $8,100
Rewards Needed Per Day to Keep % Control of SP: $900
Rewards Weighting to Creation: $675 (75%)
Rewards Weighting to Curation $225 (25%)
So, If a user with a $1m account is of average ability on a Curation basis (which is relative to your voting power), They would earn ~$225 per day from this activity. In order to not be diluted, and thus give away some of their Steem Power Control, they would need to post, and earn a payout of around $675 per day on average. Because Creation is not relative to your voting power, this is where the difficulty for the larger account holders come in.
When you add in the fact that 58 out of the Top 100 have not earned any significant Post Rewards since Steemit’s inception, I can conclude that, I expect the dilution to continue amongst the Top 100 accounts moving forward.
Summary
Overall, there are a lot of variables to consider for the Steem Distribution model. Much of it is predicated on the level of contribution the Top accounts makes to the Steemit. Luckily, the top user accounts are filled with individuals who understand the importance of Distribution, both for the community and for the Value of Their Steem Power holdings.
When we see changes in the Contribution Rewards Splits from 50:50 to 75:25 in favour of Creating Content, I believe this is a sign that the developers are monitoring this situation closely, and are prepared to make decisions that distribute power away from themselves and back to the community at large.
All we can do is wait and see how things unfold. This week, the numbers suggest to me that the distribution is happening in a significant way.. If there is one think I have learnt over the last 8 years being a Futures Trader, the past is a suggestion of the future, but not a reflection…
When addressing the sensationalist ‘Cooking the Books’ claim aimed at myself…
You might be able to ‘Cook Books’, but you can’t ‘Cook Reality’
Sources
http://www.freepik.com
https://steemd.com
https://steemd.com/distribution
https://steemd.com/richlist
Steemit Statistics Week 1
Steemit Statistics Week 2
Steemit Statistics Week 3
Steemit Distribution Revisited