The value of Steem (like any currency) depends on 3 factors;
Supply (how much Steem is available in the market)
Demand (how many people want Steem, and what they're willing to pay for it)
Intrinsic Value (the asset backing the currency)
The supply of Steem is currently increasing because new Steem is issued at an agreed upon rate (Roughly 65,000 per day). The demand is also increasing because we are adding users to Steemit (Roughly 10,000 users per week). Because the Supply is currently outpacing the demand, market makers work to "stabilize" their investment at around $1US per Steem/SBD (the price will typically fall between $0.80 and $2.00)
The intrinsic value is where the real question comes in. What is Steemit worth?
Note that I said "STEEMIT" not "STEEM".
Steemit is the asset backing Steem. By increasing the value of the asset, we increase the value of the investment instrument tied to the asset.
How do we increase the value of Steemit?
We increase the value of Steemit through thought provoking content and high quality conversations. When Steemit becomes a hub for information, that information will command capital and that capital creates value. For example, Google would be worthless as simply a search engine, but it's worth billions as an information mine.
Thanks for your reply. There are a lot of valid points in there. As I have said in other comments, Steemit is a great platform and I love using it, even if the value of Steem never went up or even halved your getting more in rewards than you would from Facebook.
That being said Steem is made out of thin air, things that are made that way struggle to find value. I'm sure if there were infinite Bitcoin available it's price wouldn't be so high.
The fact you can earn Steem for free by blogging makes me think why would people pay for something they can get for free? Where is the incentive?
Not everyone can earn it. Earning Steem for more than a few days takes consistent work and quality content. There are many people who would rather buy an investment than work for it.
There are also people who do both.
Thanks again for your input.
How many people do buy it though is the question? If the demand for people buying it went up then surly the price would follow?
What does owning Steem get you besides increased voting power? Is there a financial advantage to having a greater vote in the community?
The answer is YES! When you have greater Steem power, your vote is in demand. What is the best way for people to get that high valued vote? The best way is to read your posts, upvote you, and write about topics you're interested in so you will vote on them.
It's not worth it for the self vote (because the increase is nominal). It is well worth owning Steem Power for the esteem that comes with it. That greater esteem will earn you more votes for your content and thereby more income.
I get what your saying and I agree 100%. What I'm asking though is how many people go to Bittrex or any other exchange and actually physically buy Steem with actual real world money (well Bitcoin if your using Bittrex)
The answer looking at the market cap, appears to be not that many compared to other alt coins that don't really contribute much.
I hope one day Steem and Steemit gets the recognition is deserves as it is showing on a daily basis only positive things for blockchain technology.
There aren't many who do because it's a relatively new currency.
I think it will gain much greater value if we could somehow untie it from BTC.
Yeah I think your right there. Thanks for engaging in my post. Followed you and I will have a look at some of your work.