[an inquiry from a newbie]what makes steem value rise?
I understand steemit rewards us to engage more.
While rewards could mean many things to different people, I thought the primary reward is monetary reward that comes from trading steem on the cryptocurrency market.
I also learned that people can convert earned steem to power up, as a way of re-invest.
But if that is the only way to spend steem, why does the value of steem increase?
becasue more people mine(engage in steemit) steem?
I don't quiet get how the value of steem could rise against btc/eth in trading.
Please someone gently educate me :)
what makes any commodity rise ... supply and demand. People think STEEM might be worth more in the future, so they want it, which raises demand, which raises the price ... and visa versa applies as well of course
thanks @eqko. and why would ppl think STEEM worth more in the future, if it is only used to power up to gain more STEEM?
I'm not saying that they do.
But if try do it's because they believe in the platform and the backing technology. Also, the immediate return of value for value in regards the social platform aspect / frontend which is Steemit might have something to do with it. It's basically facebook with money for likes.
I see. so it might be more of investment in the system. that means the fluctuation of the STEEM value may or may not be coincided with what steeminians do, right?
Pricing is more a function of the "perceptions" you mentioned...not as much actual supply or demand considerations. Bitcoin will likely be the prefect vehicle that shows this concept in action over time. Not everybody wants bitcoin. Only the people who do are buying it. So there is a limited supply and a limited demand currently. Imo people who are buying now are pricing "future" demand at a steap premium. Let's just look at the fundamentals. You can pay for a good or service via a checking account and have your transaction verified about 100 times faster than you can a bitcoin transaction. So if bitcoin is "the currency of the future" it had better work out that problem at least. The "real" market will determine whether or not the peiople willing to pay the current price for bitcoin are ahead of themselves or not. The market driven sentiment indicators say that the value of bitcoin is way out of line with current "utility" that bitcoin or any other crupto offers. But you would 'expect" a bubble to be so "obvious" that either nobody cares (those who wouldn't buy anyway) or nobody "notices." :-)
Imo it is the price of Bitcoin that makes STEEM rise. I'd put bitcoin and etherium in the category of "blue chips" of the crypto world. ETH is "likely" more overvalued than bitcoin on a very short term basis. I can see ETH dropping 50%+ from current levels while bitcoin may hold a 50% drop. So if they do drop...pay attention to what happens to the rest of them including STEEM. If they ALL drop then file it away in your "what happened in the past" file, for future reference. :-)
hopely that's not the case..
thanks for the answer :)