Let's Talk About Powering Down Or Cashing Out.

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There have been a lot of discussions going on lately about the power down period and there's some really good ideas in this post by @theycallmedan. I personally don't like all of it though, and instead of making comments here and there with my input, I figured I could just make my own post.

Like pretty much always, I think people are going too deep into this whole thing. Taxes for various things, burning tokens or redirecting tokens to Hive Power holders and most of these ideas are coming from Defi, as Defi has made taxes standard so people are used to it. I get that, and I totally agree with the majority of the people on the fact that the power down period has to change.

The 13 week period has been a barrier for a lot of people for many years and Hive was supposed to be is a better, stronger and basically just a greater version of Steem. A much better one, but even though people have complained about the 13 week power down period since literally forever, we still haven't seen a change. We seem to be better off this time though, with theycallmedan talking about it, blocktrades making comments about it etc. Things seems to be picking up and who knows, we might see something new in that regard in the coming months..

That being said, while I understand the point of having taxes, I can't say that I like how basically everything sounds like the "rich will get richer" at the expense of others. Well, Dan formulated it different by saying this:

"Reward strong hands at the expense of weak hands."

What Dan suggests is this:

  • 5% powerup tax.
  • 10% instant unstake tax.
  • 10% tax on all rewards claimed (including tax rewards)

I honestly think it's insane to have taxes for power ups and claiming rewards, but I love the idea of instant power downs. I have read a lot of answers and the reasons behind power up taxes but I still don't like the idea at all.. It obviously depends on how things are implemented, but simply having to pay 5% taxes whenever you power up is not a change I would recommend or like to see.

So you only hit the ones that instantly power down all of their rewards without ever keeping any powered up, which are the people that should pay the most. - Dan.

I do understand that the tax on rewards is simply to benefit long term authors and stakers over short term authors and speculators like mentioned in Dan's post, but Hive is difficult for newcomers and I think that it something people seem to be ignoring or forgetting when they discuss things like this.

Some users are here for weeks or months before they earn anything at all, and I doubt they would be willing to pay 5% taxes just to power up their rewards. It doesn't really matter if they get it back by being a long term holder. I am sure most of these users will see it as 5% less rewards.

10% tax for claiming rewards is another thing I don't agree with at all, because I don't even think we should have to claim rewards. It should be done instantly and automatically. I have never heard anyone not claiming their rewards, and I don't think that I will ever hear it..

I might be wrong though, perhaps it's supposed to be something different than how I interpreted it, but if the 10% tax on rewards claimed is what I think it is, it's crazy. I mean, that would basically mean that a user has to:

  • Earn rewards by either making articles or comments.
  • Wait until the rewards pays out.
  • Pay 10% taxes to claim the rewards.
  • Pay 5% taxes to power up the rewards.

That would be a total of 15%. Assume that this user does this for a couple of weeks and suddenly wants out. That user has to pay another 10% tax to power down instantly.

Depending on where this user lives, they have to pay fees to convert this to the local currency as well, but before they can do that, they pay fees on exchanges to sell and convert the Hive into BTC. On top of that, they also pay taxes in their country.

I thought this whole thing was about financial freedom- moving from FIAT to crypto and to own your own content and whatever things people says. Is it freedom when we tax people 25% (maximum) and then push them towards more fees and taxes for cashing out..?

  • Nah, I don't like it and it would make it more difficult for people to actually change their lives to some extent with Hive if we pushed them towards fees and taxes.

I like the instant power down idea, and we should definitely have 10% taxes for doing that. I actually love that idea and I wish we would have it today, but I also think that we have to change the 13 week power down period to 4 weeks. This should have been changed years ago. Tribes and communities have set 4 weeks as a new standard and it doesn't make sense for Hive to be different. We should also want to move further away from our previous selves.

That being said, the only thing I think we truly need is:

  • 4 week regular power down periods.
  • Instant power downs with a 10% tax. (fee).

Anything more than that is likely to cause more headaches for people. We don't want Hive to be even more difficult and/or confusing for people. We want things to be as easy as possible. That's how we will attract new people in the long haul. Easy-to-use and easy-to-understand. That's vital.

I wouldn't mind having a 10% tax for people going with 50% author rewards paid out in liquid though, while keeping everything if they go 100% power up. That is likely to encourage more people to power up what they earn, which should be the top priority.

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