Is STEEM undervalued: A case study based on account creation perspective.

People may think STEEM is undervalued since major updates- fast signups (i.e. hardfork Velocity), Hivemind and SMT are yet to be released.

Moreover, STEEM is a working system. STEEM's current inflation and distribution is designed for high growth. That means it is assumed 99% of the future users are not yet arrived.

There is a big demand for STEEM accounts as proved by big waiting list for free approval and big fees for instant approval. One of the issues is that new accounts start with 15 SP delegation and 6 STEEM creation fee. This 15 SP is delegated from STINC holding.

Interestingly, there is not enough SP (e.g. @misterdelegation of STINC has 16M SP) for next 2 million accounts or 30 millions SP. STINC manually approves accounts to avoid multiple accounts having 15 SP delegated to them.

It is not sure how first signup will be implemented. One speculation is that new accounts can be mined as asset using PoW algorithm. Another way, is eliminate STEEM creation fees and delegation requirement.

Currently, delegation is withdrawn automatically, once new account start earning some SP. However, I am not sure what happens to inactive account as those 15 SP can be locked for eons.

One of things that can be implemented that fast signup option with no delegation, slow signup with some delegation option. It would be interesting to see how fast signup process will be implemented in next hardfork.

Now imagine 90% (i.e. 9M new users) or 99% (i.e. 99M new users) future accounts will need STEEM for staking to influence. Where they will get their STEEM. It is from new rewards earned by existing bloggers and sold at the market investors who bought low. Compared to mainstream cryptocurrency, such as BTC or LTC's emission rate, STEEM's rate is higher. But STEEM's growth potential is higher too.

Currently, due to very slow onboarding and relatively low demand (i.e. less marketing), STEEM price is taking hit as shown by the marketcap (i.e. 28-32 ranking).

Don't get fooled by the marketcap, if STEEM's sell pressure were lower it would have much higher marketcap due to its innovations and activities.

On the other hand, due to SBD's high price ($2.3 vs $1), reward is higher even with low STEEM price ($3). Therefore, incentive is higher for the content creators to higher SBD price rather than STEEM's price. At similar earning potential if SBD's price was one USD (which it supposed to be), then STEEM's price, marketcap and ranking should be much higher. From, investor's scenario, this scenario is unwarranted.

However, interestingly, fast signups, hivemind, SMT, more exchange adoption, marketing will increase demand for STEEM by changing the dynamics of supply and demand. Then it's price will rise at much more faster rate than other altcoins for sure since it is already beating them in many facets as proved by recent ranking Chinese ICT ministry and WEISS ranking.

Disclaimer: This opinion is not a financial advice, it my personal perspective and opinion. Please seek professionals for financial decisions.

Image sources: Most images are open sourced (e.g. Pixabay, Wikimedia etc.) with Creative common license. Some images are used with due courtesy to respected owners.

Thanks for reading.
@riseofth
Cryptominer since 2013, occasional trader and tech blogger