Steem.DAO and the potential after the developers
I should really go to bed but my Steem addiction got the better of me and I have to write a quick post with some thoughts on the newly named Steem.DAO progress update from @blocktrades not long ago. The decision is to build the system on a donation basis and then use the system to decide how it will be funded. Steemit Inc should be donating enough to the startup in order to get to that point at least.
This is a good compromise to go this way and @blocktrades is right that he shouldn't be the one making the decision so leveraging the Steem.DAO seems like a good use case for it. Having said that, I think that the donation system isn't going to provide anywhere close to what is needed in the long run and even in the short-term, it would likely have to rely on some very generous benefactors who believe a lot in Steem.
For the Steem.DAO to be of use it is going to require a steady stream of Steem and through donations, I don't see that happening as it would require people paying with what they already hold and would therefore feel it as an immediate loss, a cost incurred. If it came out of the inflation pool (from any of the source options) it would never pass first into hand and therefore, never out of hand.
It is much like the success of a savings plan that takes an automatic percentage out on payment instead of whatever is left at the end of the month. For most, never seeing that percentage as disposable income means that it has an out of sight, out of mind effect and gets forgotten to accumulate in a savings plan. For those who are trained savers, which path would you recommend to someone getting into savings, struggling to have some left at the end or, putting some away at the start?
The steady stream of Steem needed can't be financed by a few people, it requires a steady stream of donations by a consistent community and as we know, this is highly unlikely to happen in a community that has decided that self-voting and delegation to bidbots is great for the community as a whole. So, who is actually going to donate and, of you aren't why should I? See the problem already?
I do think it will come out of the inflation pool in one way or another pretty soon and likely, a fair bit of it will come from rewards. While content producers might complain now, there are other things that they aren't factoring in with this system that is highly important in my opinion.
Before that, the idea is that the Steem.DAO is going to encourage and finance developers to build various parts for the Steem blockchain. People want diversity of use and availability of development and improvement and this is the way to get it - pay for it. Now, if this all goes to plan, the Steem blockchain will become increasingly valuable as more and more users and consumers will find a home to create and earn as well as content to entertain and learn. Everyone should understand by now that, development is needed.
Next though is that people don't want to pay for that development even though they want to be the ones to benefit from it whether it be through increases in their Steem holdings or access to more interesting and compelling applications and ways to interact. Development benefits all users at all levels, no matter whether contributor, investor, developer or consumer. I think we can agree on that, even if we can't agree on who is funding it. Well technically, we all would be anyway.
But the more important thing that should be considered isn't the funding of the development but, what happens if the development is successful as that is what we are actually aiming for. The point of the entire proposal system is to make Steem more valuable by increasing its ability to satisfy the needs of an expanding community.
Let's pretend for a moment that it does work and Steem is highly valuable, what then?
At some point, it the amounts of value that is being pulled from the chain to fund the development of the chain will no longer be reasonable which would mean that we could lower the draw from the pool to the point that perhaps, it isn't needed at all. But what if we didn't? I tend to look long on crypto and I tend to think that it is more than a way to get rich.
In my last post I wrote about how we are trading what we have of value for worthless fiat. About a year ago I wrote a post that mentioned funding that had been secured for AI research from crypto gains about four months ago I wrote about funding research through Steem and eleven months ago again something related. There are several more at least and the search function sucks on Steem, but do you see where my head is at?
While at some point the Steem.DAO might not be needed that heavily for the development of the blockchain itself, the same system could then be leveraged to fund all kinds of other development funding. Essentially, rather than selling into fiat, we are investing the blockchain into a buyback system of the real world through using a percentage of the inflation to fund research into various sciences or, the building of schools in developing nations. It doesn't really matter what the development is, the community itself would be the driver of the decision making, development through demand.
This is where I see the future strength of Steem as it is able to not only increase in value through community growth and use case but, real-world needs could be met by the community itself through all kinds of funded initiatives that puts highly utilized and valued Steem to work in the exact places the community chooses to place it. That is empowering the community to take responsibility and power the real world which in turn, feeds back into the social use case of Steem loop to improve usage and transactions to increase the ability of the next round of funding.
Steem becomes a true economy and, it includes a mechanism that allows the community to create and support developments that reach out into the real world to solve more and more issues in ways and with reach that no government or centralized company can. Does that have value?
This is the issue through because in order to get to that level of usage, the blockchain and the community has to develop a lot in both technicality and maturity to have the kind of value and values that enable such a thing to happen. That isn't going to be triggered through donations at this point in time because for the most part, if the community could afford to donate Steem to development, there wouldn't be 76,288,412 STEEM sitting on the exchanges.
As I see it, the donation mechanism will fail and soon enough there will be a draw from the inflation pool. This isn't a loss to anyone on the blockchain as it comes from unallocated Steem at that point but, it will lower potential earning for some people. If it works as hoped however, it will make those earnings not only much more valuable, it will provide numerous other opportunities and incentives for the very people who lost out to make more gains. It is about timing, right now code developers are needed to build apps and improve the blockchain but as it improves, they will take a back seat to other kinds of developer. Community developers, education developers, art developers, sports developers, social developers... you know, the contributors.
The infrastructure required to organise and carry them all needs to be created first though. I isn't a loss, but it could be among the most important gains any community has ever attempted to undertake. But hey, I am an idealist - though still not to the point that I believe donations will be enough.
Maybe you are here for the moon - aim a little higher.
[ a Steem original ]
Damn it, that wasn't a quick post.