While there are a lot of different blockchain startups that promise to solve different things, but unfortunately, there does not seem to be many projects that try to solve the social media issues.
Yes, I’m talking about the problem with censorship. In the era of politically divided countries, it’s quite important to have a decentralized platform where everybody is not afraid of centralized government’s interventions.
And this is where SteemIt comes in. Being the most popular application running on Steem blockchain, SteemIt tries to solve these issues by claiming they are decentralized and censorship-resistant. Until today, Steem blockchain is mostly known for the existence of SteemIt.
So, how successful the presence and the technology of Steem? And is it worth it to invest in STEEM coin? Let’s find out together.
STEEM - Summary
The idea of Steem was created in 2014 by Ned Scott and the famous crypto figure Dan Larimer. Before the creation of Steem, most people did not think of using cryptocurrencies for other use-cases. They assumed the only use case for cryptocurrencies was just for cross-border transactions and to be used for a store of value.
But Dan Larimer and Ned Scott had a different idea. They believed that being censorship-resistant, crypto should had been used to create a social network that prioritized freedom of speech above everything else.
Then, the Steem blockchain was created. The idea of Steem was quite direct. It was meant for social media and content-focused applications. The biggest and main application of Steem blockchain is called SteemIt.
SteemIt is like a decentralized Reddit where everybody can talk about anything they want, and they can easily get “paid” in the form of cryptocurrency. The goal here is to create a self-sustainable platform where everybody can still get paid without any interference from any centralized entity.
The growth of SteemIt invited some dividing opinions both inside and outside the blockchain space. Many idealists believe SteemIt’s existence is important for the blockchain community because it promotes censorship-resistant and is a testament to whether blockchain-based social network can moderate itself or not.
Meanwhile, the skeptics believe this type of “free for all” social network empowers people with extreme political views. Those who are usually “banned” from standard social media (facebook, twitter, or reddit) might find a new home in SteemIt.
I don’t know if you agree with the optimists or the skeptics, but one thing for sure, the idea of SteemIt in its beginning was considered fresh in the blockchain industry. It inspired many other blockchain projects to target different use cases and not just to be the better Bitcoin or Ethereum.
Of course, being censorship-resistant, content-focused application is not the only purpose of Steem blockchain. It is also trying to solve the classic problem of monetization. As we all know, advertising and affiliate marketing are usually the most reliable ways for people to get paid on social media.
But, to be fair, most of the users on these same social media websites often ignore the same ads and promotional posts. More often than not, they actually feel annoyed by all these advertisements.
To solve this exact problem, SteemIt utilizes a different monetization system where even the commenters and people who give upvotes can be rewarded in the form of crypto. The vision here is that everybody who “contributes” to the platform must be respected and rewarded.
Apart from SteemIt, Steem blockchain also empowers eSteem (mobile app), DTube (decentralized YouTube), Utopian (funding open source projects), and Steem Monsters (trading card game).
STEEM should be credited for giving fame to decentralized social network applications. It pushed the blockchain community forward because it did its things differently from other blockchain networks at the time. However, STEEM will be a thing of the past unless some drastic changes can be applied, because it seems many people have “moved on” from STEEM to other platforms.
The Economy of STEEM
Steem blockchain is not very simple when it comes to currency units. Basically, there are three currency units tied to the Steem network. They are called Steem Power, Steem Dollars, and STEEM. Let’s break them down one by one.
STEEM: The main and native cryptocurrency of the Steem blockchain is STEEM. The indicator to see how popular the entire Steem ecosystem is also this STEEM coin. STEEM erodes at a 9.5% rate yearly, because of the continuous creation of STEEM coins every month.
You can exchange STEEM coin to other major cryptocurrencies, such as BTC or ETH. Many major crypto exchanges allow you to trade STEEM, such as Binance, HitBTC, Huobi, Bithumb, Upbit, or Bittrex.
Steem Power: Then, we have the second currency unit called Steem Power. 15% of new STEEM that is created daily will be automatically given to the Steem Power HODL-ers while the rest of 85% of newly created coins will be directly distributed to the content creators, upvoters, commenters, and others.
In other words, Steem Power is like a governance currency unit, where you will be able to get more STEEM coins just by HODL-ing Steem Power.
Steem Dollar: Last but not least, there’s Steem Dollar. As you can expect from its name, the value is tied 1-to-1 to USD. It’s like stablecoin, but it exists inside the Steem ecosystem. Popular posters will be able to get rewarded 50% in Steem Dollars and 50% in Steem Power units.
When you receive Steem Dollars, you can cash them out on the open market or you can get up to 10% interest just by HODLing them. Some SteemIt users often chose to sell their Steem Dollars to Steem Power units because of better incentives that are being given to Steem Power HODL-ers.
The fact that STEEM introduced three different currency units may be confusing to many users. They could have just made one single currency and used a different mechanism to pay its users.
Analyzing Steem Team
Ned Scott - image source
Investing in a cryptocurrency is not as easy as believing in its technology. More often than not, investing in a cryptocurrency also means buying the core team’s promises. After all, we invest in one specific crypto because we believe it will be able to do many other things in the future.
So, how about the Steem core team? The two central figures of the Steem core team were Ned Scott and Dan Larimer. They introduced the idea of Steem in 2014, and the project successfully took off in 2016. Dan Larimer, especially, is a big name in the crypto industry. Apart from co-founding Steem, he is also known for co-founding BitShares and EOS.
While Dan’s big-name alone might be able to convert people to have faith in Steem, but keep in mind that Dan himself has left his active role in the project. When EOS got extremely popular, Dan had to re-manage his focus. And to focus on EOS, he chose to leave Steem.
Controversies And The Popularity Of Steem
While Steem blockchain and SteemIt were popular a few years ago, but things have changed recently. SteemIt has been losing popularity recently. Many of the earlier Steem enthusiasts were huge fans of Dan Larimer, the co-founder of BitShares and EOS.
However, ever since EOS became relevant in the blockchain space, Dan Larimer left the Steem project to focus on EOS. Many of the Steem enthusiasts feel that this project wouldn’t be able to maintain its relevance in the competitive blockchain space without Dan at the helm.
There was also one huge controversy that happened in January 2019. A controversial user with username thedarkoverlord was banned by SteemIt developer named jredbeard. This controversial ban raised some eyebrows as Steem core team often championed the platform for being “censorship-resistant”.
Jredbeard, however, argued that the ban was only from one specific application, SteemIt, and not from the Steem blockchain itself. Many people did not buy the argument from jredbeard, because everybody knows that Steem has never been popular for other applications outside to empower SteemIt itself. So, if SteemIt is not censorship-resistant, what’s the point of having Steem blockchain in the first place?
If the biggest “representative” of Steem blockchain cannot act differently from centralized social media platforms, why would we use blockchain? This is the question that has helped SteemIt to lose its popularity among blockchain enthusiasts slowly. Ironically, SteemIt was promoted as the “decentralized” platform where people shouldn’t be afraid of speaking their minds.
Steem Future And Potential Roadblocks
If people asked me this question 2 years ago, I might give a different answer. But looking at the current situation, to be honest, I am not very certain of the future of Steem blockchain. First of all, Steem is not as popular as it used to be. There are many newer blockchain platforms that have taken the attention of crypto enthusiasts.
Secondly, SteemIt had failed to prove that it could maintain its censorship-resistant and auto-moderate policies when the pressure was high. The controversy that I wrote above has killed much faith of Steem enthusiasts.
Third and perhaps the biggest doubt is the existence of Voice. For your information, Dan Larimer introduced Voice some time ago, and this new social media would be created on top of EOS blockchain.
If there’s one guy that can help SteemIt to gain more popularity, the guy would be Dan. Ironically, Dan left Steem to focus on EOS. And now, he created another blockchain-based social media to compete directly with Steem.
Of course, Steem blockchain has other applications that try to do different things (such as DTube and Steem Monsters), but they are not nearly as popular as SteemIt.
External Factor And STEEM Price
So, you have learned all the important factors about Steem blockchain that can affect the price of STEEM coin. But, how about any external factor? Well, as everybody knows, Bitcoin's price pretty much controls the entire crypto market.
At this point, the majority of altcoin prices are hugely affected by Bitcoin price action. STEEM is not an exception. If Bitcoin price goes up significantly, STEEM price might go up significantly as well. If Bitcoin price goes down, STEEM price might go down as well.
In 2020 many experts believe Bitcoin price will pump heavily following the Bitcoin’s mining reward halving event somewhere in the middle of the year. If we follow their prediction, the STEEM coin price should go up as well.
However, many other analysts predict that the community’s reaction to the halving event was already “priced in” this year when BTC price went up from below $4000 to above $12000. It means that next year BTC price wouldn’t go up anymore because all the traders already bought in earlier this year.
Either way, you need to pay close attention to Bitcoin price action and all the important news. Because whether you like it or not, Bitcoin price will almost certainly affect STEEM coin price.
Conclusion
In the earlier years, Steem blockchain was an exciting project that introduced a fresh idea to create censorship-resistant, content-focused applications. But once again, things don’t look as good anymore, judging by the current situation. STEEM coin remains a decent option to invest, but there are other altcoins with better prospects.
