It would be helpful to my account if you were to upvote this and follow me for more cryptocurrency discussions.
Disclaimer: I am not bashing the Steemit platform, which I do love using, but I am bashing the Steem coin which in my opinion is based on a highly flawed business model. You should not take this article as a professional investment guide and instead make decisions based on your own opinions and ideas!
STEEM IS FLAWED:
In today's market, most cryptocurrency investors are willing to buy coins based purely on speculation and not on the actual use or technical aspects of the currency. One such example is Steem. I can probably describe Steem's main issue with one sentence:
STEEM combines the best aspects of capitalism with the worst aspects of communism
The main point of steem is to run alongside with the steemit platform and incentivize blog posting and social media in a way that was never done before. Sounds great, right. Not exactly. Steem coins are generated upon demand. Something that leads to incredible inflation and therefore a drop in price.
How can this be? Don't other cryptocurrencies also generate coins on demand?
Well, technically yes. traditional cryptocurrencies generate coins to reward miners. The key here is that the miners are rewarded for contributing towards the economy, but in steem, blog posters give no contribution to the economy, instead they contribute to the separate steemit platform. See the issue here? The creators of steem tried to incentivize blog posting (the best part of capitalism) but instead caused unnecessary inflation (the worst part of communism, apart from the overall bastardness that is, killing, lack of resources, etc.). This means that Steem can only go down in value.
unless,
The value is equally increased by an increase of buy orders. This is where perhaps the worst part of steem comes in. Why would anyone want to buy steem? Like, seriously, what is the point of buying steem!? The only point of Steem for Steemit users is to sell it. You can't really use it for anything like bitcoin or other cryptos. Ya see, the only people buying steem are those speculating on the value and not understanding how it works. If people did understand this no one would buy steem as an investment and the price would crash. Don't get me wrong, I love Steem and Steemit and hope that for some reason I didn't take into account, the system works
Lol if too many people read this i cant make money off of it :)
If you said you cant buy anything or their is no utility to buynsteem, that mean you dont understand it and where you are, take the time to look what you can do with steem and steem power.
did you take the time to buy steem with real money to change it into steem power?
I guess I don't need to read anything you right then.
Mute in...3...2...1...gone.
congratulations
You could be buying steem to power up your account to be able to give a better vote. This really means you have to lock your steem into steem power for 3 months to get it all back and that you're putting a stake in the platform. There are also places where you can use steem to buy things like PeerHub. I'm sure, given some time, there will be more places taking steem as payment because there is no transaction fee and its near instant transaction time.
I also think that the only reason of any money/currency is to sell it. You may sell your steem for bitcoin, your bitcoin for fiat, and your fiat for food. Then that person that sold the food for fiat might sell that for bitcoin, and sell the bitcoin for steem. It's all a cycle.
Yes, I don't think there is a cap on the amount of steem that can be created but it's limited each day. There is a pool that is divided up among all the votes. So if many people vote, the amount of money they give per vote is less than if only a few people vote.
nevertheless, Steemit is trying to create money out of nothing and pay its users with a superfluous currency that has no intrinsic value
Ummm... I think you could replace 'Steemit' with [any western country] and your statement would be a little more accurate. Where do you think fiat currency gets its value?
fiat currency originally got its value from the government purchasing silver and storing it in the treasury. They got rid of that and the economy is now worse.
Besides that, have you ever gone to a remedial history class? Whenever someone even mentions the national debt the first words out of someones mouth are "cant they just print more money?" Well, can they. Because thats what steemit is trying to do
Yes, fiat currency used to be backed by gold and silver until 1974 (in Canada). The year is similar for the US; '68 maybe. Yes things have gotten out of control not because the government is printing too much money, it's because the government is borrowing the money from banks and has to pay it back with interest.
If you have the only $10 and you lend me $1 if I agree to pay you back $2, where does the second dollar come from? I would have to borrow it from you and then I'd owe $4. I would never be able to pay you back. That is how the bank controls the government now. It has nothing to do with how much money they print. I don't know a lot about US history, but in Canada before 1974, the government spent large sums of money on 2 world wars, major highways, major airports, railway systems, sea ports, the St-Lawrence seaway to the great lakes, etc. All of those things did not even make a dent in the countries debt until they got rid of the gold backed dollar.
So, it's not because the government is printing money. they were always doing that. It's because the government gave the power to print money to the banks and they are ruining the economy because now everyone is enslaved by debt.
This is not the case with steemit. Steemit has a fixed amount of steem being created every day. The value that backs it is the people using the site and how much value they get out of it. Yes, if people stopped using the site and steemit continued to create steem, then the value would drop. But, if people keep joining and they keep finding value in this place, then the value will go up. I'm sure there are factors that cause deflation of steem as well. Like holding steem power. All that steem power everyone has is locked up for a short term so only the liquid steem can be sold. If everyone started to power down all at once, I'm sure the price would drop even before they sold it. But not everyone is powering down so the price is holding steady.