Steemit is Bitcoin's Killer App | Evidence, Numbers, & Analysis

in bitcoin •  3 years ago 

Steemit is the killer app Bitcoin has been waiting for to bring fresh and diverse people into Bitcoin and into cryptocurrencies. Steemit is easy to use, its purpose is self-evident, and it puts crypto to good use. More people will have a first cryptocurrency experience with Steemit than any other decentralization-related company to date.

Bitcoin is a closed, exclusive community of young, smart, libertarian-leaning males

Look around, boys. We're all the same. The Reddit communities, BCT, every Meetup ever, Core devs, Classic devs, the entrepreneurs that run decentralized start-ups, the investors, the traders, the hodlers -- all predominantly 18-45 year old men. We're all in the 1% of techno-literacy. Many have Zerohedge as a daily read. Many have a deep understanding of the Austrian School. We are mostly focused, driven people. We all use the expression "hodler" like it's a thing. This is all great. But none of this is normal. Not even a little bit.

Normal people do not care about any current Bitcoin projects

Bitcoin companies and their products do nothing for them. Purse.io is the closest thing to a Bitcoin killer app and I have had hardly any luck on convincing people not already in the cryptocurency community to save 20-30% on Amazon purchases by using Purse. It seems like a no-brainer. But the response I get is it's complicated, I don't want to take BTC FX risk, is it a scam, it takes too much time, it's...weird.

I don't know anyone outside of Bitcoin who would even try OpenBazaar. Bitcoin gambling isn't even popular with the gamblers --> there is too little liquidity on the poker sites and too many sharks. The P2P lending sites have proven to be failures. What else is there? It's early yet but it's also been years since the ATH and there is really no reason for a normal person to care about Bitcoin or need to have it, except for speculative purposes. The dark markets are their own world and definitionally not normal.

Bitcoin is great but its audience is microscopic today and confined to a niche of like-minded men.

But normal people are signing up for Steemit at a feverish rate

The system is flexible and is what each person makes of it. It's also easy. Self-evident and easy. You sign up and write a blog or share news like on reddit or post photos or disseminate a white papers or tag a recipe or a hotel review and so on. That's why it's able to onboard so many new, different people.

The result?

Steemit is a diverse, open community of -- collectively -- normal people

Look around, steemians. Diversity! On Steemit you have...

These are people who would never have bought a Bitcoin or become involved in a cryptocurrency but for the fact that Steemit onboarded them in the last couple of months. I would bet real satoshi that they have no opinion about the block size debate. What a relief! They are also all women. Cryptocurrency has long been made weak by the complete lack of gender diversity. The sooner Bitcoin et alia reflect society at large in their compositions, the better. Also the bigger and more valuable. There was an in-depth survey of Ethereum community members a few weeks back. It reached 1000 community members. The results showed that 4% of the participants were female. Crazy but not shocking. We can and should do better.

Let's continue a quick tour of notable steemians...

The only thing these steemians have in common is enthusiasm and a willingness to go for it, whatever it is.

Where does this go? Bring out the Numbers

500 accounts are being created per day. If that rate continues, that translate into 180k accounts created per year. If the rate of account creation correlates and lags the price action of Steem, then we should expect this rate to increase. If it goes to 3k/day, that is 1 million accounts per year. That's a 6x rate increase or roughly what the rate has increased in just the last month. (Note: I started writing this Monday night. 48 hours later, the current account creation rate is now 1200/day).

Use that as our strawman. 1 million new users. Maybe 60% of them are new to crypto. 600k people onboarded and actively engaging with a blockchain solution to social media that is fueled by a cryptocurrency and for which the gateway is BTC. 600k getting comfortable with something new and formerly weird.

I acknowledge that I am firmly in guessland here so bear with me. I'm a formidable guesser. Let's put that in context for the current Bitcoin userbase, which I consider a fair proxy for all cryptocurrency participants. Coinbase has 3 million accounts and is the biggest Bitcoin company. Let's say that extrapolates into 6 million Bitcoin uniques (i.e. one real person and infinite wallets per real person) that have been created. Some % of that 6 million are people who aren't really active users and did it as a lark or have fallen into disuse. My own feeling is that the number for Bitcoin Active Users (holders of more than $5k USD worth or people who do at least 1 BTC transaction per month) is somewhere from 1-3 million. The mid-point is convenient. 2 million BAUs.

More context from other steemians:

2mm BAUs seems reasonable. Steemit, if account growth gets to and stabilizes at 3k/day, will increase that by 600k or 30% in 1 year. Queue the BTC rocket ships, boys.

Let's throw some more context on Steemit and its user growth. Reddit has 40 million users and has been a phenomenal success. The scenario above posits that Steemit has become 3% of the size of Reddit. That may or may not happen. But is that crazy? What if Steemit just gets to 20% of Reddit's size in terms of users? Steemit will then have onboarded a 400% increase of BAUs. Network effects lift all (rocket) ships. These are estimates and guesswork and I look forward to fleshing these numbers out with the community. But directionally, they look exciting.

Will it play out like this? What goes wrong?

It's crypto, anything can go wrong. Let's level set.

Steemit's economic model is untested and may not work. What happens if account creation stops? What happens if price action pushes lower hard? What happens if many people "power down" all at once? How does the Steem Dollar peg get maintained and not break? What happens if whales are passive and don't curate? There are numerous examples of cracks and excesses like the fact that my Steem Power earns the equivalent of 4 minimum wage workers income per week. Is any of this sustainable? It's too early to be certain either way. Whether Steem will succeed or fail on its own is beyond the purview of this article.

But we're watching a new social media network form in real-time. And we're going to witness a sizable increase in new crypto community participants no matter what. We've already seen 15k added. And if it happens like I expect, Steemit will onboard 1 million or more people per year. That's 1 million people being made comfortable with crypto, finding it usable and relatable. That's a huge win for Bitcoin and crypto.

The value of any cryptocurrency is the people involved and the network effects they bring, all enabled by the underlying technologies and their usefulness to people. 1 million more active users into the cloistered world of cryptocurrency seems like a valuable breath of fresh air. Steemit, despite not even being a Bitcoin project, looks like it has the potential to be Bitcoin's killer app. Bitcoin hodlers rejoice.

Disclaimer: I hold SP and BTC and other decentralization-related tokens. There are other examples of this idea that have been posted but I started this days before those videos were posted and I also posted this idea in a couple public slacks. This piece is more fleshed out with analysis and evidence and context. I'll let you be the judge.

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And what happens when Fiat exchanges add Steem Dollar gateways?
Can bitcoin even handle 1M users transacting that frequently?
Bitcoin may be a bottleneck if it attempts to stay in the loop between users and cashing in and out.

More details here: https://steemit.com/bitcoin/@dantheman/can-bitcoin-scale-to-keep-up-with-demand-created-by-steem

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That is a good point. I would say that this level of traffic should be good for bitcoin and other crypto systems. As if bitcoin gets bogged down THAT bad, someone will come in and provide a service that fills the need. That is the beauty of capitalism.

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Bitcoin will never adapt. In the "killer app: scenario, Bitcoin will be out of the loop. Other alts will blow by Bitcoin.

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  ·  3 years ago (edited)

Great point. It can play out a couple ways, right? More than I could ever list. But here are some potential scenarios.

Certain Bitcoin community members may see these microtransactions as spam and not want newbies who write posts about fashion tips as part of their version of Bitcoin. So maybe they work to repel them, and keep Bitcoin cloistered at a social level and tx limited at a technology level.

Or maybe the bottleneck forces change to happen. Where the case and value for adapting the Bitcoin technology become more clear one way or another.

Or maybe it becomes a place for Lightning to shine.

Or Bitcoin faces Steem developing its own fiat bridges and other bridges, which will likely happen anyway (you know better than I, obviously), and sees its critical mass barrier eroded on a relative basis.

But if Bitcoin is the bottleneck AND gets ditched, I still think this is good for Bitcoin, because it would represent so many fresh people getting exposure to overall cryptoworld.

It's going to be fun to watch. Exciting times.

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This is true. I had a nightmare last night that this happened haha

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The site's exchange could allow for alternative currencies to be traded for Steem thus reducing the load on BTC. A shapeshift-esque implementation may work.

Another Stellabelle example post from today. It's a great success story and probably difficult to replicate but she went for it and made it happen.

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Thank you.

I'm excited because of all the excitement.

When doing the calculations i think we need to work with %ages.

1200 users per day seems huge today. But if we have 1m users 1200 new users would likely be less than users becoming passive and indicate decline. I am sure the grow is going to be a %age of the currwnt size of the network until we have reached a plateau.

On the other this is the first of its kind of business case combining social with blockchain. It is likelely flawed and there might be a better way. The qurstion is is steem the new yahoo or is it google. I feel it has found a new way of doing somethi g but i am bot sure it cannot be improved.

Great article! I'm brand new to Steemit and crypto currency in general. Your article really got my mind running about what the future holds.

I have a question that I can't find an answer for, how do I upvote this article or others? I haven't posted any content yet. Do I need to so I can see the vote buttons?

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You hit the arrow that is to the left and pointing up below articles and replies. Everyone can upvote. Cheers.

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THANK YOU eeks! I've been reading #steemithelp articles trying to find that out....such a little thing but obviously very important!

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I like steemit, but it is basically medium isn't it? I'm not sure it is the killer app you think it is.

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Yeah, it's better than Medium potentially. But maybe also Yelp. Why not start doing food reviews and tag them. Or maybe Tripadvisor with travelling. Or maybe Wordpress with blogging posts under your @ name. Or why not also Facebook with ephemeral aspects of your life shared. We don't know what it will be. It could go in a lot of directions or all of them. But it's pushing ahead and fast.

"Look around, boys. We're all the same. The Reddit communities, BCT, every Meetup ever, Core devs, Classic devs, the entrepreneurs that run decentralized start-ups, the investors, the traders, the hodlers -- all predominantly 18-45 year old men. We're all in the 1% of techno-literacy".
This post really cleared up many realities. Thanks a lot. Myopic and one- dimensional perspectives naturally occur when one set of demographic makes rules for all. This is not ideal. As more diverse people become whales, things will shift.... It's not going to happen quickly though,

Accurate and excellent summation about the crypto market in general. The population hardly knows yet alone understands Bitcoin and you will get deer-in-the-headlight blank stares if you talk about any of the other 1700 other currencies! Steem is easy to use and understand hence faster adoption. There is also a reason to use it. Their privacy policy is a little weak and if they were not US based I would not have signed up, so some improvement in privacy needs to be tightened up but with wise insights Steem could become a long-term viable system if everyone tries to make it so without undermining it.

Wow, just wow. This was great. Thanks for the shoutout. I researched Bitcoin in early days and was intrigued. However, I had some reservations about the dark web and this caused me to not want to get involved . Women tend to stay out of male-dominated spaces. Women have a deep, subconscious fear of rape. Steemit and specially @dantheman have really made this space safe for us. If Dan wasn't running this ship and instead it was being run by a guy with shallow ideals, I would never have joined. Dan's non-violent approach is creating massive wealth. We are all quite lucky.

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You deserve it. It's also a huge unmitigated home run for crypto have found a way to get more people involved.

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Glad to hear you're doing well with steem. Keep the videos coming Craig.

Great post... I totally agree. This is going to be huge.

Where and how can we see how many accounts are being created per day?

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Thanks!

one thing we now for sure is that steemit will grow and fast. I was speaking to a seventeen year old yesterday about who new nothing about crypto, called me back this morning and said that he is now fascinated with it.

  ·  3 years ago (edited)

Nice thoguhts and effort put into post. But lets be realistic. Althrough steem gives you free money and account at start with 6$ value ATM, and its easier to get in and use.
How much vaue is in it?
I'm sure people will come to platform at exponential rise rate for some time, since all people that are into cryptocurrency will come and all of those that will see this as the train to come to it easilly .I'm sure community will have major benefits from that.
But naming your blog and those point you put in blog that is killer app is just over the point IMHO.
Lets hope this strenhgten this community of crypto, and educate people in better ways for using it not killing Bitcoin or thing you mentioned in title post, becuse all that 99% of major population knows about crytpocoins is that Bitcoin exists. Killing BTC would be killing steem as well.
Variety of crypt just helps it and one or two strong ones makes it just like modern corporate world.
Please be sensitive with your title names and be real, focused on quality that you own and not clickbait.
Best regards.

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  ·  3 years ago (edited)

Leksimus-

I am guessing that English is not your first language so that probably caused some confusion. "Killer App" is a term in English that means "Really Awesome Great Thing That Makes Everyone Want to Use Something." It's an expression used a LOT in technology and business.

Killer App definition

I am saying that Steem is GREAT for Bitcoin and GREAT for BTC holders.

Cheers,
eeks

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AGREE

Steem will be a stellar gateway for all things crypto. Exciting times in the future. Full steem ahead!!!!!!!

Great read, hope Steem works out good.

Wow. I've just joined and I'm impressed!

How could I miss out on this?
When was the crowdfunding / ICO?

The future seems promising as I read this kind of articles.
I hope its going to be a great success.

Are you sure these 1200 accounts per day are real people?

Holy fuck

Steemit is really killer bitcoin? I don't no man.

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Not "killing bitcoin" but an app that is a great use case to help bitcoin and crypto in general

I 'm excited to be the first to use steemit!
:)

A post worthy of my hourly Upvote. Done.

it will be like youtube but for bloggers

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I'm not sure I follow that one. How do you mean?

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Yes

Don't under estimate anything

  ·  2 years ago (edited)

Thank you! People like you make our community great. Old post I know, but it's feel still just as relevant now. As a new user I love Steemit, it's exactly what I've been looking for in the Crypto community. Reddit can be a little aggressive for my taste and the fact that Steemit is so much more visibly diverse is fantastic.

Completely agree that the imbalance in gender diversity makes the crypto community weak. This is something we need to actively seek to change as a community. It's unfortunate that anonymity on the internet seems to bring out people's worst traits and as a consequence the internet can be an extremely hostile place for women. Given that the crypto community is largely online (and a skewed demographic as you mentioned), I think we need to be especially mindful of this fact and make a concentrated effort to make blockchain technology for everyone.

Great post! I especially loved this:
"We all use the expression "hodler" like it's a thing. This is all great. But none of this is normal. Not even a little bit."
That killed me! Thanks again!

Right on!! Steemit will definitely help pique interest in others

Thanks for the info!

This is the real open community, real decentralization world.
We are seeing to right now.

I think Steemit is amazing but is there any chance, as happened with BTC in the early days, that it gets described as a Ponzi scheme?

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Yes. And those pieces on Bitcoin were stupid and misunderstood what a ponzi is. Network effects DO NOT equal ponzi. But network effects define value in a hyper-connected world. Facebook, Uber, Google, eBay, Microsoft are all businesses that are built on network effects.

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👁👯

Love your commentary style. Bookmarked for reference!

I love the enthusiasm but Steemit is not a Bitcoin app (I'm suprised @dantheman didn't say this bluntly in his reply post). It would more accurately be described as a blockchain app, and it certainly has a long way to go before it dethrones the original, achetype blockchain app: Bitcoin itself.

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I imagine STEEM and Bitcoin will be crypto buddies. As far as I know, STEEM can only be converted to FIAT via Bitcoin, for now.

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Yes, Bitcoin is simply the intermediary between fiat and steem right now. They won't really have anything to do with each other once that is decoupled, besides having some overlapping users. Saying that Steemit is Bitcoin's killer app is like saying "converting your dollars to quarters to play the arcade is fiat's killer app".

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But you're assuming that use of steem will have no impact on general awareness of bitcoin or crypto in general. I've yet to understand how this does not compute in the minds of bitcoin maximalists (not saying you are or aren't one).

Also, arcades were a killer app for fiat.

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I DO understand that; I mentioned the two would have overlapping users partly for that reason.
Calling Steemit Bitcoin's "killer app" because its an on- off-ramp to fiat, would make Bitcoin the killer app for basically all altcoins.

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Steemit and bitcoin are two peas in the pod. And while I tend to agree with you about Steemit having a long way to go before dethroning bitcoin, I think that is really just a question of the web user experience at this stage. Once that is set, then I see no reason that steemit wouldn't steal most of Reddit's users, and most of Quora's users.

If steemit integrates webtorrent, it can begin to compete directly with YouTube.

The list really goes on and on. I'd also love to hear about attempts to integrate with MaidSafe.

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You can read my post regarding switching from Reddit: https://steemit.com/steem/@glib/take-the-rid-of-reddit-challenge-with-me

I wouldn't say Bitcoin and Steemit are "two peas in a pod" at all. All they really share is the fact they are crypto-currencies and each use a blockchain. That definition would make all cryptos "peas in a pod". I think there probably are some more people learning about Bitcoin since they have to sell steem to get bitcoin so that they can do anything with that "money". Once there is a direct steem <-> fiat pipeline they won't really have much to do with each other. Also, the two have rather different use cases right now. I'm rooting for both, but I have much more long term faith in bitcoin.

Im wondering how much value has Steem, its fresh currency and charts is still grow up :O

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