Is Steem Still Running Hot?
The blockchain-based social media attracts content and criticism, but it remains one of the liveliest hubs for cryptocurrency discussions.
The Steem project kicked off in March 2016, at a time when cryptocurrencies still lay low, and Bitcoin traded below $400. What Steem is, according to its creators: "An incentivized, blockchain-based social media platform." What Steem promises to do:
"Steem is a blockchain database that supports community building and social interaction with cryptocurrency rewards. Steem combines concepts from social media with lessons learned from building cryptocurrencies and their communities." - Steem White Paper
Some compare Steem to a decentralized Reddit. The blockchain and the coin offer a website that relies on regular users for content and rewards the most influential posters with Steem dollars and Steem. Users then may choose to do two things- sell the Steem on Bittrex, or transform it into Steem Power. Steem Power gives users more influence on the platform to curate and upvote content.
Steem the Coin
Steem the cryptocoin holds a relatively depressed price compared to other tokens and is open for speculative investments. It is exchangeable for Bitcoin with high liquidity.
|Steem Price||Market Capitalization (August 2017)||24-Hour Trading Volume|
[caption id="attachment_296" align="alignright" width="1083"] source: coinmarketcap.com[/caption]
Who Made Steem?
Steem launched on March 24, 2016. Daniel Larimer is listed among the founders. He is also known for other projects- BitShares and EOS and the cryptocurrency community considers him a visionary and an influential figure. He is known as bytemaster on the GitHub community.
The initial launch of Steem did not go without a glitch. Mining instructions to users were botched, and this allowed the team to start mining for a while before other users joined in. Currently, Steemit platform users claim the developer team still holds a lot of influence on upvotes and favors public figures.
Did Steem do an Actual ICO?
Steem released a white paper a few months before its main service became available. But it did not do a classical ICO where it would raise capital from a pool of investors. Instead, the Steem coins became tradable immediately on Bittrex. Afterwards, Steem and Steem dollars were distributed among users by two mechanisms: participation in the social media platform and outright buying from an online exchange.
According to GitHub documentation, Steem was first announced on the Bitcointalk forums. There were some coin bonuses for participation in the Facebook group.
Steem is officially in its beta stage and claims to be an experimental system. It is a "delegated proof of stake" blockchain. This means coin holders vote for delegates. The delegates are then responsible for validating transactions and can earn transaction fees.
Steem arrived on the marketplace with significant amounts of the coin pre-mined by the owners. When this happens, investors are usually wary, and the sale or ICO is not considered fair. Other ICOs usually announce if the distribution is fair or would include pre-mining.
Steem vs Steem Dollars
When talking about the Steem project, we have to focus on two coins: Steem and Steem dollars.
Steem dollars are what writers on the Steem platform receive as a reward for their writing. The Steem Dollar is designed and maintained by the team, so its price hovers around parity with the US dollar. If the price of Steem dollars fluctuates on the markets, the algorithm rewards writers with more or less of the currency.
Steem dollars had an irregular price spike in May, which according to experts was the result of a random, automatic price pump.
Users on the platform may choose to save up their Steem dollars. Then, they can take them away and sell them for fiat USD. Inside the system, users may also exchange Steem Dollars for the Steem token. And the third option is to vest the Steem tokens into Steem Power, which cannot be sold or converted back. Steem Power gives more weight when up-voting content. And it also means the user has a share in the project.
The market price of Steem is much more volatile, with significant differences in 24-hour trading volumes. The first spike for Steem happened in the summer of 2016. Then interest waned and re-awakened again with the general rise in cryptocurrencies in 2017.
Steem dollars vary in value. The algorithm for the Steem platform takes price increases into account. When the price rises, more Steem dollars are awarded, to increase the money supply. When the price is low, the rewards decrease. When the price falls sharply, it may be better to trade Steem dollars into Steem first, and then sell the Steem on an exchange. Otherwise, if Steem dollars are expensive, converting to Steem will lead to losses.
|Steem dollars Market Price||Market Capitalization (August 2017)||24-Hour Trading Volume|
[caption id="attachment_297" align="alignright" width="1074"] source: coinmarketcap.com[/caption]
Steem dollars themselves cannot act as a speculative asset. Despite the short-term pumps, this cryptocoin is not meant to fluctuate too far from parity with the US dollar. The payout system and users cashing out serve as a mechanism to keep the price of Steem Dollars fairly constant.
How to Get Steem in 2017
The price of Steem took a beating in the past weeks, down from nearly $2 toward $1.20. But trading volumes and interest remain robust, so it is still possible to get Steem as a speculative asset.
Steem is available at:
Using the reward system to get Steem is almost futile, due to the weight of power users. Some users still choose the platform for its informative and entertaining value.
The Steem Community
After the Steem platform started work, users quickly accumulated. Currently, there are around 131 thousand accounts on the social network, most in the "newbies" state. The system works in such a way that the biggest accounts hold the biggest heft in voting, and receive the highest rewards.
This has made some critics consider Steem a pyramid scheme. But for others, it is a way of enjoying the benefits of a social network while potentially receiving a payout.
Unfortunately, there is no way to tell which accounts are real and which are made just for mining purposes or to run voting bots. This dilutes the idea that payout comes to real persons for quality content and voting. Some users see issues with the possibility of voting for a post without opening it. Others openly admit to using bots on the Steem network, as well as on other similar blockchain-based social media.
The Future of Steem
In terms of market price, Steem has shown high volatility and long periods of depression. Bullish investors see it reaching $10. But its future depends on the evolution of the network. Steemit has seen new versions and updates that constantly change the rules on payouts, inflation within the system, mining consensus and other details of the platform. The platform remains centralized, and the developer team changes the calculation formulas for curation and writing rewards. At the same time, the community seems lively enough, although most topics discussed circle around the world of cryptocurrencies.