I believe that most investors are scared away by the high amount of really bad bitbot-promoted content which we get to see especially in the Trending section today. It's like watching a movie where 95% is advertising. Unfortunately most of the big Steemit accounts and witnesses embrace and exploit the bid-bot system for their profit without realizing that it's killing the spirit of the platform. Replacing genuine human interaction with automated voting-systems is the poison for any creativity.
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It is an interesting view, and definitely a valid concern. I suspect there probably are some investors who have looked at steemit.com as an example of how the platform is supposed to work, and been discouraged / disheartened by what they saw.
I will play devil's advocate though and pose the question - how many potential investors do you think this really mattered to? Do you think that a majority of traders who are buying/selling on Bittrex and the other platforms are actually going and checking out the products behind the coins they buy? I would guess that the number is a lot lower than people would expect.
This sentence made a little light bulb come on so I hope it makes sense when I explain it @timcliff. I agree with the statement above because most investors (average Joe's) in the crypto world don't have the tech background to begin to understand the purpose of the projects behind a coin. Why would they be motivated to do research on something they assume they can't grasp?
Now what kind of project would those same average Joe's understand very well because it has dominated their lives the past decade or more? A social media product. While it may be difficult for the average Joe to understand if Golem or some other project is working as designed it is very clear to most investors that Steemit a "social media platform alternative" is not hitting its mark. That mark is very recognizable to investors because they have lived in that space for years interacting with successful social platforms such as Facebook, Instagram, and Twitter.
Investors take a look and don't like what they see because they know from experience what success looks like for a social platform. Well I hope that came across clear enough.
I wouldn't call people who just trade Steem on exchanges investors but rather traders. All they want to see is the chart of Steem; when the price is low they buy in for a few hundreds or thousands, when it spikes they sell. These people usually don't look at the technology behind the coin. However, if somebody really wants to invest big money into this then they will probably want to know more about it and they'll do their research. Why to buy big into a magazine which only shows ads? Is there even a point in placing ads in such a magazine?
Steemit today only works as a social media platform in small hidden niches. You only get good content in your feed if you hand-pick the accounts you follow. And it's getting less because the revenues are in decline due to SP delegations to bid-bots, thus many people are discouraged to continue using it regularly.
In a large number of cases Steem's 'product', imperfect though it may be, would be miles ahead of those other tokens being traded simply because it actually exists, works, and is being used.
Then again I've heard the argument that actually having a product in this market is bad, because then you can be tested in terms of real metrics like daily active users, growth rate, etc. as well as taking a hard look at things like how those things actually drive token value (or don't). If there isn't any working product it is all based on a good story and dreams of reaching the stars, without any hard numbers or hard reality to hold it back.
I can see the point about the metrics. When you are traded on speculation alone, well imaginations run wild.
Yeah, how else did sbd reach 10$ each? O:-)
I’m not seeing the connection
I'm new to Steemit, so I may be too much of a newbie. However, some observations. The reason people think Pyramid Scheme is because in those MLM systems, the first investors (re: whales) seem to have made all the money and anyone below is just stuck at the bottom. So, a way to reward good content is needed. I write fiction on Steemit and rarely does anyone read it. Which takes me to point two: bid bots. Those are the only way to reward content and it comes at the mercy of the person funding the promotion. So I can invest $5 STEEM with the expectation of earning $7 STEEM. I have to put in the money. This seems a bit like buying into a pyramid. What is needed is a way to show how STEEM can be used for Smart Contracts and other things. Now, I love Steem because it is one of the few coins that actually can show Proof of Work and people are posting things on it and using it. Cynically, I can use more bid bots to earn more STEEM, but I really want readers. We need to find a way to improve discovery and readership. Otherwise, it will continue to be viewed as a way to make money from the pyramid.