Steem value – a different perspective – by analysis, rather than excitement.
Like you, I have enjoyed seeing posts getting nicely plump rewards. It feels good.
There is almost a ‘back to the good old days’ feeling.
What I write here is not designed to be a party pooper piece – just a recognition of what is happening.
Supply and demand affects all commodities in the same way. When something is scarce and in demand, its price rises. When it is plentiful and easily obtained, the price will decrease.
First up: when you see your rewards for your magnificent post showing $23.47, it is not twenty-three dollars and forty-seven cents which you will receive in 7 days time – it is the equivalent of that in SP and Steem, depending upon your selection. And then it the portion which goes to the author.
A matter of days ago, it would have said about $4 or $5, so – my suggestion to you is to gather Steem and SP, not the dollar value. Below is why.
Firstly, let’s see who owns the SP on steemit. The graph below shows the number of accounts that make up the different percentiles of overall ownership. Hence, on 9th December, 219 accounts controlled 90% of all the SP on steemit.com – today that figure is 298 accounts. Apologies for the slightly blurred numbers but you get the gist, I hope.
Then let’s take a look at the ownership of the Value on steemit.com, comprising Steem, Steem Power and Steem Backed Dollars. This is where we all draw in a huge breath – the ownership of the value in steemit.com has concentrated to such an extent that 113 accounts control 90% of all the value of the currency.
There seems to have been a migration (albeit very slight) away from SP and into Steem – what has occurred in the “decentralised” blockchain world?
There is a total of some 43.6 million Steem out there and 26.1 million of it is tied up in the poloniex account. This means that there is only 40% of all the steem there is in the world which is available. If one were to add in any other trading accounts, this 40% figure would be even lower. SP is illiquid - Steem is the only version of the currency which can be traded immediately.
So, watch the movements because there is not a cat’s chance in hell that a Social Media Platform with a few thousand subscribers is worth $100 million.
Be aware also that there are numerous people who own several accounts within the top 100 listings. So – there are probably something in the region of 60-80 people who manage the price of Steem. Were that poloniex account to be released …?
Just as if it could not get any worse. The top 5 steemit accounts are holding 76.65% of all the Steem. Tread carefully!
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Interesting numbers. Although I didn't had the exact numbers at hand, for sure I knew Steemit is in the hands of a very few. When Steem went down, and rewards went down, many Steemians left Steemit as well. It seems some of them are now returning, now the rewards are up again.
Agree that a network with a couple of thousand users cannot be worth 100/200M+ US$, but can so many other coins without even a proper service be worth what they are worth? It is Silicon Valley type valuation. Valuation on the exchanges are also determined by the speed money is shifting from coin to coin, or from coin out and then again in. Like the economy is determined by the speed money changes hands.
Crypto in a whole is in a bubble in IMHO, so is Steem. But will this bubble burst? Who knows.
Interestingly, what I still cannot figure out is when we would grow to lets say 1M active users, with lets say 500k posts per day, the amount of Steem available for rewards will be very very low. I think we have about 40k Steem per day available, this means an average per post of 8ct Steem. If Steem would be worth 5$, this is 40ct$ per post in average. With Steem worth 5$, the market cap will be? Around 1 Billion? That is 1.000 US$ per active user. I never saw in the world an active user being that much worth. WhatsApp was sold for a record amount of around 20B$, but had at least 500M active users which is 40$/active user.
Back to the 40$/post average. Without having the numbers, a few getting the majority part of the rewards. Which means that most posts will get much less than average. Will we keep all those users that are below the few at the top of the pyramid onboard? I think we will have a hard time!
Therefore it is absolutely clear to me Steemit can only grow when commercial business are becoming active on Steemit, think of all those who uses FB and other channels for their interactions with their followers? Bring them over to Steemit (we need tailored technology, tailored features, tailored UI for each segment) and let them also pay some fiat money to be allowed to be connected, or be able to get their own channel. I think this must happen, otherwise the figures doesn't add up, and we will never have more than a few 10s of thousand active users with a low valuation of the Steem currency.
You have a firm grasp on things!
I used to work in the digicomms industry - a while back now - but he fundamentals have not changed.
If you are ever on Discord, it would be great to have a chat. I shall PM you there. The
Yes, I'm on Discord :)
Very interesting article @ebryans Thank you!!!
Thank you @blackwidow7. Much appreciated.
I am very concerned at this artificial squeeze on demand. People think they are getting more but - they are infact getting less. To focus upon $ rewards is very misleading. They should focus upon the Steem and SP as their guides.
Following you - hope you enjoy the journey!
Interesting post @ebryans and I see where your going with this which is why I am keeping my steem power and will be turning some of my SBD into STEEM power.
Thank you @simonjay - yes - but there are bigger considerations - if we, as a community, just spent $210,000 on filling the rewards pool and we gleaned absolutely no benefit ... and there is no steem ... WTF did all that money buy?
Fine thread. Good to see I'm not the only one who thinks like this. I've bene asking myself. Do people actually check the Trustworthiness of the crypto they invest in or do they just blindly see money money money? :-) Besides coinmarketcap.com there is: https://www.coincheckup.com. The site is my go to place for crypto investment analaysis and indepth coin research. For example: https://www.coincheckup.com/coins/Steem#analysis To see the: Steem Detailed report.