HomeAnswerNotificationsCustomize Feeds
HOMEQUESTION
Will there ever be a cap on the total amount of steem that will ever be mined/generated?
$0.24
5 ANSWERS

No, there is no cap on the total amount of STEEM that will be created. However, there is a cap in the rate that new STEEM is created. In other words, STEEM has an infinite, but predictable money supply.

Unlike Bitcoin that has a finite supply, STEEM follows an inflationary model, such that it has an infinite supply of coins. Thus, every year, for as long as the blockchain exists, there will be new STEEM coins printed for distribution to all its stakeholders. How much new STEEM will be created is determined by the blockchain's inflation rate, which according to the Steem White Paper was initially set at 9.5% during the blockchain's 16th Hardfork in December 2016. However, STEEM's inflation rate was also designed to decrease by 0.01% for every 250,000 new blocks created on the chain, or at a rate of about 0.5% every year, until the overall inflation rate reaches 0.95%. 

What does this mean? 

First, it means that because of STEEM's infinite supply, new coins will be continuously created and added to the Rewards Pool for distribution to all stakeholders. This way, the Steem Blockchain can make sure that all stakeholders--the witnesses, investors, content creators, curators, and everyone else who contributes to the blockchain--will continue to be rewarded for their contribution for as long as the blockchain exists.  

This is what makes the Steem Blockchain perfect for tokenizing web content. I mean, imagine what would happen if you tokenized a Q&A Platform like Musing.io on top of a finite cryptocurrency like Bitcoin. By the time the last Bitcoin has been mined and distributed, where would Musing.io get the coins to reward it's Musers? 

And second, it also solves the scarcity issue. The trouble with an inflationary model for a cryptocurrency like STEEM is that the lack of scarcity makes is a terrible store of value. I mean, that's the nature of inflation--your $100 today has less value than the same $100 fifty years ago, and will hold less value fifty years from now. Thus, to resolve the lack of scarcity, the blockchain's 16th Hardfork has set the inflation rate to decrease at a gradual rate until it reaches 0.95%. This way, the amount of new STEEM created everyday will be low enough to prevent the coin from losing too much value because of time. 

@penguinpablo actually compared the amount of new Bitcoin and Gold mined everyday and the amount of new Euros printed every day with the amount of new STEEM printed everyday. And you'll be glad to know that for an inflationary model, STEEM's money supply is actually pretty scarce. In fact, using the current inflation rate of 8.65% and the current supply of STEEM at about 285,900,000 (rounded to the nearest hundredth thousand), only about 67,754 new STEEM were created today. 

So, the supply of STEEM coin is infinite. New coins are created everyday, and will remain so for the existence of the blockchain. Nonetheless, the rate that new coins are created is determined in a predictable manner based on the blockchain's inflation schedule. But please keep in mind that this model could change in the future with a Hardfork, just as STEEM changed from it's original 100% inflation model to the current one during the 16th Hardfork. 

Hope this helps. 

Sources:

  1. Steem White Paper. https://steem.com/wp-content/uploads/2018/10/steem-whitepaper.pdf
  2. Is Steem inflationary? https://steempeak.com/steemit/@andrarchy/is-steem-inflationary
  3. Putting the Steem inflation into perspective. https://steempeak.com/steem/@penguinpablo/putting-the-steem-inflation-into-perspective
  4. SteemDB.com. https://steemdb.com/
$3.29
Reply

STEEM mining was completed in by the end of the summer of 2016. Since then, STEEM has been generated by the blockchain without mining at a predetermined rate in each block. The supply is controlled and the chain is secured by having witnesses, the top 20 of whom are allowed to create blocks, who are elected in a process of continuous witness voting by all stakeholders.

The rate at which STEEM (and SBD - together the two make up what is called the virtual supply of STEEM as SBD is essentially a debt instrument redeemable and backed by 1 USD worth of STEEM to be created when SBD is converted into STEEM in a special 3.5-day process) is created is fixed. There rate of issuance follows a steady downward trend from 9.5% to 1% from year 1 to year 18 years after which it will remain at 1%.

Here's a link to the inflation table:

https://steemit.com/steem-inflation/@fyrstikken/what-is-the-inflation-rate-of-steem-here-is-the-supply-table-for-the-next-20-years

$1.23
Reply

No

Steem will continually be generated to fund the reward pool and pay witnesses. (until a hardfork changes that)

However, the rate at which Steem is produced is on a steady decline.

In about 10 years, only %0.95 of total Steem would be produced each year

$0.87
Reply
1 Comment

Steem is ongoing and will continue to produce to feed the reward pool. Steem will reduce the rate at which it is produced and will eventually drop to 0.95% per year.

$0.24
Reply

NO absolutely - Steem produced only one year - 0.95%, so your question answer NO

$0.01
Reply