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Why Do People Think That Steem's Distribution Is Unique?


3 months ago5 min read

This is a legitimate question. For the past 18 months, I have gone back and forth with many people complaining about how the distribution of Steem is. They believe that it is somehow unfair that some people have a lot of SP while others have so little.

What is most fascinating is that these same people launch attacks against Steem while justifying it by pointing to other blockchains. In fact, one who is launching missiles at Steem is really guilty of it.

There was an article posted the other day that stated the Weiss group was downgrading EOS. The reason? It is too centralized.

Isn't this a kick in the pants?

For all the heat that Steem takes for Steemit Inc having too much control and the token distribution in the hands of too few, EOS is far worse. Many will remember when it was released a year ago, the top 10 wallets accounted for almost 50% of the tokens.

Over the past year, I took a look at Ethereum, Bitcoin, and Litecoin and reached the same conclusion. In those ecosystems, the top few wallets own the vast majority of the tokens.

Thus, it is time to admit that what we see on Steem is not unique. In the early stages, token distribution is overwhelmingly in the hands of a few. The question is what happens as time passes.

What is interesting is that Steem goes counter to what is taking place in Bitcoin. It is being reported that the top Bitcoin wallets added to their holdings when the price dropped. Hence we see a situation where the bear actually made the larger accounts more powerful.

On Steem, it is the exact opposite. The bear market enabled smaller accounts to add to their holdings. Steem offers something different in the sense that one's holdings offer more opportunities than just a speculative investment. Holding more SP enhances the stake in the blockchain, enabling one to earn more.

At the same time, the inflation rate is spread out in part, to authors and curators. This is something that helps with the distribution. We know that about half the top accounts are not active on a daily basis. They are not sharing in the daily reward pool payout.

There is more SP held in by Orcas, Dolphins, and Minnows today than there was a year ago. We also see more of those accounts in each category. If we see the present trend continue, which there is no reason why it should not, a year from now, we will see more people in each category, collectively holding more SP. Each day. roughly 50K accounts are transacting. Since there are only 35 Whales, that means a lot of activity is taking place outside that category.

Certainly, we know there are duplicate accounts on Steem. Again, the problem with pointing this out is that people often make it out to be unique. With EOS, who owns those top 10 wallets? Who are the Bitcoin Whales who keep growing? We know a few of the biggest ones but outside that, who owns the other 50 largest wallets? Are they the same people?

Steem is far from an ideal system. Certainly there are problems. Yet we do not see Steem being downgraded because it is too centralized. In fact, with the addition of MIRA about to take effect, we see Steem potentially moving in the other direction where the cost reduction makes Steem less centralized.

There are a number of accounts I interacted with over the past year and a half which provided me the opportunity to watch them grow. I will give you an example.

Towards the end of 2017, I started the 1KSP program in which certain people "sponsored" a smaller account that was highly active on the blockchain. The goal was to commit to upvoting that person's content, once a day at 100%, until that person reached 1,000 SP. In one of the rounds, I selected @mariannewest to sponsor. It took a while, but we got her account to the 1K level. She was a decent sized Minnow at that point.

Today, look at her now.


She is an active Dolphin with almost 6K SP. Her activity on here remains high with the different projects she is involved in. This is an account that had very little in it 18 months ago yet is one of the 2,000 largest today.

So while the distribution breakdown is not unique, the ability for people to come on here and grow their accounts through effort is. While it is not easy, it can be done. It takes time, consistency, and effort.

It is easy to look at how things are today and conclude that is where they will always be. The truth is the trend has been going in a positive direction for a while. Again, we are much better off today than we were a year ago. Based upon what is happening, it is safe to say the trend will continue, presenting us a much different picture a year from now.

At that time, we might see 2,500 Dolphins and 13,000 Minnows.

It is the direction the trend is going.

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