I’m glad you pointed this out as it helps define the message of the article. Another observant reader pointed this out on an attempt I made at a cross post, and this was the answer that I provided him:
https://steem.com/steem-bluepaper.pdf
This brings us behind what is described in the article as “the first layer of distribution” meant to identify the content creators as the primary distributors. Whether or not HIVE has (it obviously does) a rewards distribution pool prior to content creator distribution to the markets is somewhat irrelevant but I’ll explain why. It doesn’t however negate your observation as this pinch point has its own economic implications which I will list here.
How the currencies are received by the markets as described in the article are correct. However, with the setup of the rewards pool the impact this has on the intended users is that the more users come on to the platform the more scarce these rewards become between the users as a finite amount of rewards are distributed across the population of users on the system who are performing the incentivized activities. If those billion users showed up and all actively participated in incentivized activities finite rewards would be few and far between in that large volume of users. This still works against Hive’s greater goal of growing and maintaining a community as less users on the platform will see more rewards provided the incentivized activities are being performed.
Hive would still massively benefit from the strategies suggested in the article or other similar actions performed by the platform for the reasons pointed out in the article. Using strategies to ensure long term upward market trends in the valuation of Hive currencies would serve the greater Hive community rather than the negative up and down that has been seen in the market performance of Hive currencies.
I would also like to point out that whether or not there is a finite pool or infinite stream of HIVE behind the performance of incentivized actions is not the critique of the article. The critique certainly is to bring all the economic incentives in harmony with the goals and ambitions of the platform regardless of what Hive felt was the most preferable way of distribution of its tokens from their origin to the markets.
All right, I still find some contradiction here:
... and what we talked about. So, imagine just one in a thousand is interested in powering up and investing into curation power which is also attention control. Basically, you promote any chosen content by being a powerful curator. If you're new, you have to buy this scarce token on the markets.
How the currencies go to the market is correct as of now but the flow cannot exceed the reward pool even if all the users wish to dump their rewards immediately. And users who have learned the power of powered up Hive will not be so quick. Also, a billion new users will need RC to perform upon the platform. If they want to compete for rewards with old users, they will need to invest. Time or money.
Other suggested mechanisms in the article might be ok, I have no experience in that regard.