The above picture is an accurate representation of the price of steem right now. There are millions of steem sitting in exchanges right now. That's just the liquid steem.
Above that are the millions of steem power sitting in oligarch accounts.
Since the price of Steem doesn't seem mature enough to be rigged yet I'm going to go out on a limb and say it's a fair pricing mechanism. That means supply and demand should determine price along with irrational exuberance.
Right now there 84.7M of the 178 million steem power that are out there sitting in the corporate account @steemit. If the corporation needs money and they can't get it through funding where do you think they will try to get USD? They will power down and sell steem. So, 47% of the total steem is sitting in one account. That feels like a lot of downward potential energy.
Now, the top 25 accounts (including @steemit) hold 70.7% of the steem power.
Top 100 accounts hold 84.5% of all the steem power.
There are 106k accounts. That means that that 0.09% control 84.5% of the Steem Power. That's not even including the steem and steem dollars, which only makes the picture less egalitarian.
The nature of a startup is that you don't want your money tied up in the start up indefinately. You want to be able to remove it and get paid. You probably slaved away with shitty hours and a shitty salary. What you're waiting for is cashing out. These guys want to get their USD for their work. Steem is cool and all, but at some point you want a house and a car and to stop steeming in your mother's basement like all the other broke Millenials so you have to get USD!
The oligarchs are going to sell. Now, because there is not a line of investment bankers all waiting to purchase steem, you can't buy it with a credit card or with any standard investment approach, and there are no institutional investors in the steem itself that means the people that are most likely to buy it are the 7k active users. That leaves each active user having to purchase 145k steem to get us back to a $1 range. Maybe I'm a fool, but I don't see that scenario passing.
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I'm waiting for the post from Ned or Dan where they come out and say "here's our plan." Because without that kind of public leadership I don't see the price moving anywhere but down. Now, just cause they say something doesn't mean it will help the price. If they come up with a bad plan it will only make things worse.
On a long enough time line assuming this thing doesn't implode there is upside potential. However, too many people are pissed and don't want to keep making uncertain wages that Chinese farm peasants would decline while whales sit around circle jerking their friends' posts higher and higher. Valuable posts in this community are much more tied to who you know and who regularly backs you rather than the inherent quality of your work. That pisses people off and unrecognized bloggers or worse yet talented bloggers with hundreds of likes and no value to show for it say "fuck this." That's only going to get worse as the value of steem goes down and fewer and fewer people think "you know what? I should sit around making fractions of a steem worth fractions of a dollar because I don't understand economics." In the short run the price of steem seems really likely to drop as the massive weight of $156M steem waiting to get cashed out seems way too powerful for the 7k broke ass active users in the community.
This is when the community is at maximum risk. You have to hope that enough people think "hey this $0.01 steem is a good long term investment" so that people start buying faster than you can say "I'm leaving this fucked up steemocracy."
When the price dips below $0.10 cents I'm probably a buyer. I mostly think the price will drop to $0.01 at some point in the next year if things stay the same so even at $0.10 I'm not in the game as an short term investment. I guess I hope that maybe the silent leaders at that point figure out a way to drum up some cash to save this biatch.
Some folks like this platform a lot and want to see it succeed. Those are the people that I think are most likely to put money in the pot now. They aren't savvy investors. They are cheerful people that value holding value in this place more than they value smart financial investments (or they read the situation differently than I do). They basically keep the price floating where it is now. That's good from a moral point of view, but at the moment I think it's a bad financial plan. There are still some good investments out there that don't take you 2 years to recoup.
I'm not a financial planner. This isn't advice. I'm just sharing with the basement dwelling broke ass Millennials (I haven't seen a Rockefeller post on Steem yet) why I'm not shoving my own savings into this thing... yet.
Other than that... everything is awesome.
I am new to steem. So far (30 minutes) loving it. Its a great information sharing platform. And love the remuneration part of it. Maybe we should see it for its true value. Information and networking. And not for money making purposes, that should come eventually... facebook wasnt build in a few months either.
Most of the new users would love steemit for about two weeks, after two weeks, more than 80% of them wouldn't come back .
"Some folks like this platform a lot and want to see it succeed. Those are the people that I think are most likely to put money in the pot now. "
"They aren't savvy investors."
the platform has to pay for the cost of the system ... 1st ... and it must test the 'witness' group by making it unprofitable for a long stretch.
i see a long run at the bottom. and you're right some of the better of the bloggers are going to sink what little USD they hold now and get burned. that will reduce the content quality as they lose hope/money.
HOPE is finding some rational business model at the bottom. Perhaps the 'promoted' feature starts to generate revenue.
Likely be a pay to play pitch too.
promoted post was a failure.
Yeah. Pretty sure all whales have abandoned me. One exception might be Smooth, but it appears that's a 1% vote or their voting power is always low. Nobody likes a critic. Oh well.
yes, and we have all said the reasons for this user retention problem OVER AND OVER AND OVER AND OVER AND OVER AND OVER AGAIN. No reponse from Steemit Inc. yet.
I haven't seen any posts, no communication, no recognition of the problems. 'WE'RE STILL IN BETA'. Yes, but ignoring our concerns and the platform's problems will get no where........today, there's a new post every 4 minutes.........I've never seen it that slow before. But I've already spent way too much of my time to just give up. Until something better comes along that solves all my social media issues, I'm going to be in here.
Well said @stellabelle - me too! I've invested 100s of hours on Steemit and I want to see a recognition of problems as well! When the market cap falls below $20M, the real sink or swim feeling will kick in I believe??
I've been around for a couple months and like it as much as ever!
Yep. Cool place to blog. Shitty investment at the moment.
I happen to disagree on the 2nd point, at least as an investment for myself. I wouldn't recommend an investment like this to my parents because we have highly different levels of risk tolerance.
But, if people always agreed on investments, we'd only have just buyers or just sellers; markets to trade the investments would cease to exist. Disagreement keeps people on their toes and makes things interesting!
People are getting anxious because they aren't making $1,000,000 off their posts and the price of steem is steadily falling. But that's ok, all we need is to power up! If everybody powers up there steem then the price will rise... Until then, we will have people questioning the users of steemit.
I don't know if it is by design, because they are super busy, because they don't want the legal ramifications of promising things that aren't 100% going to be delivered, or what - but there isn't really a centralized road-map. There are bits and pieces of what Dan/Ned/Steemit's plans are scattered everywhere though. (Almost in a decentralized fashion...) One example is the recent hackathon interview. There are lots of other posts/interviews that give previews of what is in the works too.
As far as the price, it is going to be at the whims of short-term traders trying to manipulate the market, the whales cashing out, and the downward pressure of authors cashing out for a while. In the short-term this is bad for Steem/Steemit, but in the long-term it is probably good. The centralization of power is one of the bigger issues that the community has, and if the price gets low enough - whoever wants to can make themselves a whale, can.
For those that believe Steem/Steemit is going to succeed once more features are added, the kinks are worked out, and more tools/platforms are built on top of the block-chain, then the future is looking bright. Eventually once Steemit is turned into a professional site and there are more incentives for people to buy/hold SP, then the supply and demand equation will be different.
In fairness, there are some other factors at play.
1: The site is growing, in terms of users and tools. Linear growth in users delivers an exponential growth in network effect.
2: There is talk of advertising banners etc bought with steem, driving the price back up.
3: Whales don't want to give away SP for nothing. The price gets low enough and a lot of them will stop powering down.
4: Bitcoin whales make steemit whales look like minnows. The crypto world is pretty incestuous, and those who saw early potential in bitcoin, are equipped intellectually and financially to see the potential in steemit.
It's not growing as far as users. Out of 104,000 accounts, only around 3,000 are actually on the site each day.
How many were active daily a month ago?
I've been around since before the first payout and like you it disturbs me that I see no leadership from the top. I want this to succeed, but when I don't see the founders addressing this I grow concerned.
This is really hyperbolic. Most of those 106k accounts are not individual people. One person claims to own 30K accounts.
smooth I had no idea someone might have 30K accounts , That is shocking .
The most important attribute of this system is that accounts don't matter. I personally have over 1000 accounts, though most of them sit completely unused. It is (and was when I was mining) necessary to have many accounts for mining (for example, if you look at the mining queue right now you will see a couple of people now mining with many accounts each). Apart from mining, anyone can create as many accounts as they want using the cli wallet, although they do have to pay for them.
So, in summary, don't be too shocked, nor too concerned about it. SP is what matters, and the person who claims to have 30K accounts (and probably actually does) has relatively little SP. But it also means that statistics about what percentage of the accounts are active, own what percentage of the SP, earn what percentage of the rewards, etc. are always quite meaningless.
You learn something new everyday.
Why establish 30,000 sock puppets?
Are they cyber squatting popular names?
They were obtained for free by exploiting the faucet. At least some are resold in bulk to spammers and those who want to manipulate voting. It is impossible to say if those are the only purposes.
GREAT READ
There looks to be a lot of support around 20 cent level. I think the price will start to stablize here on out.
2 days.... Not a lot of support!
lol, that 20 cent support level didn't take long to break though. Who know by next month this thing could be trading for a few pennies.
Great analysis though!! Very interesting read @aggroed
Yeah.... it really is unfortunate. If you look at some of the steemit whales, they bought in with over $100,000 dollars and now they have a fraction of it left. It looks to me like they took the money from the whales, passed it out to everybody for posting and now have no real plan. Advertising might have helped, or smart contract development might have helped.... or some direction. imagine a Fantasy Football on a steemit contract, or a prediction market on a steemit contract, or a steemit version of ethereum development. I have heard there is a very fast transaction time for steemit, but what we have is a social platform. I think steemit is done. In 3 months at the current rate, the majority of steemits market cap will be a fraction of what it is now. It appears to be an exponential decline in value.
Since STEEM seems to go down about 3% every single day I'm wondering when it will hit the magical price of $0.01.
Nothing magical about that price. Plenty of room to go lower from there.
Great post... Enjoyed the info and presented well
:(
Some good reasoning on why Steem price should keep going down.
Hopefully there is somebody that could give us atechnical argument for the value to rise.
The main difference between the 1 established crypto and all the rest is that one is valued and trusted and used as a currency to a degree that is above and beyond its value to currency traders . Steem could become the 2nd crypto to have inherent value but only when it is being used sufficiently, by many, to purchase goods and services. This will never happen while the winners, "big earners", cash out daily for dollars because when they do this they are indeed, as the article surmises, being paid by investors, who are losers. They will only stop this when the price hits rock bottom and then, maybe, because of the community spirit, something will be built that has real value.
maybe Steem is a "one-day wonder" ? At least more people learn about crypto currencies ...but I guess most of the marketeer, desginer people here (with the math phobia) are not interested in this.
Up voted and followed
I am new to steam. I get it and I don't get it. I love the idea, but there is not real engaging content on the site that I have found so far. I don't see how I integrate it in to my life as a resource for information. The stuff I get in Google searches is so much better than what is here. Maybe the fall in price is a content issue. Maybe there needs to be Facebook integration and a flow of post between the two with a way to earn steem. The truth is we are all on Facebook and it will be hard to pull most people away from that to a platform like this.
I'm on Steem since almost the beginning and a lot happened since then. It's sad to see that the founding team still practice a limited communication with the community.
My biggest concern is what steempower investors really gain? What is the true value of voting power? Are there other incentives for users to buy into the platform and get voting power.
On the flip side, a steem based digital economy will be Superp. Free transactions, stabile currencies, earning money through blogging and much more.
What are your thoughts about that? What are the benefits to gain influence?
Let's say you are motorbike-dealer. Let's say you have enough SP to make 20$ upvote for every post mentioning some particular motorbike brand . That might be helpful for your business .
"That pisses people off and unrecognized bloggers or worse yet talented bloggers with hundreds of likes and no value to show for it say "fuck this." best line of this post.
Thank you @aggroed! I love reading that article. I was wondering if you read the whitepaper?
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Great analysis.
In general whales cause a lot of volatility for currencies on exchanges which I do not think is a good thing for companies trying to grow a business. The success or failure of these businesses can turn on what these whales do.
Having said that, that is all part of the free market and we just need to ride out storm. I am hopeful for the future of steem. It's a great idea but until it's user base grows and people can make regular income from contributing its future won't be certain.