Why Should an Investor Prefer Steem/Steem Power over Bitcoin?

in #steem6 years ago (edited)

When I think about investing in an asset, I don't project possible profits in fiat money. Keeping my savings in fiat is a losing investment in the long term for sure.

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When I think about investing in an asset, I compare its possible profits to a benchmark asset. For example, in the stock market, that is SPY, an S&P 500 index fund. When it comes to cryptocurrencies, my benchmark asset is Bitcoin.

Bitcoin vs. Steem / Steem Power

Bitcoin has an annual inflation rate of 4.33% at the moment. That rate will be halved every four years. It has a very high adoption rate, at least with the investors.

When I look at Steem, I see a 9% inflation rate. That inflation rate is scheduled to decrease 0.5% every year.

If I power up, I receive 15% of the inflation rate as a yearly "dividend," but then I don't have the liquidity of Steem. I'm partially stuck with my investment for three months. In the crypto-world, even a day makes a huge difference in prices.

Pro Side of Steem

On the pro side of Steem, there is the Steemit website. Sure, there are some brilliant authors and posts on this platform, if you take your time and dig deeper. But the average user sees a bunch of weird posts on the trending and hot tabs, which are rewarded hundreds of dollars.

If the user wants to interact with the platform, it takes a week to register. The UI is not intuitive. Quickly posting something via your mobile phone is not easy.

Your Turn

  • Now, please let me know why would an investor sell their Bitcoins to invest in Steem or Steem Power?
  • Why would you do it now?
  • What am I missing in this picture?

Disclosure and Disclaimer

At the moment of writing this post, I owned some Steem Power and Bitcoin. This post is for information purposes only and not intended to be investment advice.

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I think the big difference is that when you hold bitcoin, you are hoping that more people buy bitcoin so that you can sell it at a higher price than what you bought it at.

With Steem Power, you can buy it because you want to use it. If you're an advertiser or creating a new product and want to give it attention, you can use Steem Power for that.

Bitcoin has nothing really backing it's value. Steem Power is backed by content and an ability to bring eyeballs to content.

If you're an advertiser or creating a new product and want to give it attention, you can use Steem Power for that.

Steem Power is backed by content and an ability to bring eyeballs to content.

Theoretically, I agree with you. Those are the investment hypotheses of Steem Power.

My question is "to which extent does Steemit.com fulfill those hypotheses?"

I'm not convinced of 99% of the content and the other 1% is hard to find.

The majority of the eyeballs seem to belong to the people who want to make a quick buck on the platform. I'm not convinced that advertising on Steemit is better than advertising on other platforms such as Facebook.

It would be interesting to have demographics data of active Steemit users. With Facebook, you have that data. When advertising, the demographics make a huge difference in advertisement costs.

I'm afraid that the majority of the users on Steemit belong to the demographic that is inexpensive to advertise to on Facebook.

I agree with you that right now Steemit is pretty much a worse version of all its competitors. Steemit is worse than Reddit. DTube is worse than Youtube. DSound is worse than SoundCloud. Dlive is worse than Twitch. But this is temporary.

Now that a middleman doesn't take a disproportionate share, there large economic incentives to transition these platforms to decentralized ones.

Look at https://www.alexa.com/siteinfo/d.tube & https://www.alexa.com/siteinfo/steemit.com . These sites are rapidly growing even though the ui and content is worse. They will keep growing because there is an economic incentive for content creators to use them.

Even better, if you can figure out a better ui that hasn't been invented yet, you instantly have access to platform with hundreds of thousands of users. Centralized companies have to grow each new product from 0. With steem, any new tag you create automatically gives you exposure through steemit.com

Right now it's worse, but it's getting better and it's going to keep getting better.

Now that a middleman doesn't take a disproportionate share, there large economic incentives to transition these platforms to decentralized ones.

I see this is the future, but I have a difficult time seeing Steemit in its current form taking a significant part in that. Sure, it had a good run in the last crypto bull market, but now, it's in a bear market. I think for a good reason, namely the reward pool abuse.

Then there are other projects targeting that space as well. Basic Attention Token and the Brave browser for example. I haven't used them, but the idea behind them is interesting as well.

They will keep growing because there is an economic incentive for content creators to use them.

I wonder, if this could save Steemit. Steemit already has some great authors and content, but it's so difficult to find them, because trending and hot tabs are populated with mostly self-promoted posts.

If Steemit wants to make it, they should consider creating a home page that is populated with posts relevant to the user, similar to the homepage of YouTube. Only then does this platform in its current form has a chance to succeed.

Even better, if you can figure out a better ui that hasn't been invented yet, you instantly have access to platform with hundreds of thousands of users.

The best UI would be, as I mentioned above, the one that takes into account the content consumer's preferences and customizes the content according to the end user's preferences.

Who is best placed to do that than yourself by following the users that write to your liking ? In order for Steemit to do that in your stead it wold have to collect and analyze your personal data. A lot of people came here precisely because they don't want a plateform to collect and use their browsing and reading habits

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