Steemit's Valuation
First some statistic;
Market Capitalisation: Low $13m v $26m High (last 7 days)
Market Capitalisation 7 day Mid-Price: $19.5m
Current Users Base: 14,500
Active Last 24hrs: 718
Current Daily Active User Value (@$19.5m): $27,158
Active Last 7 days: 1,554
Current Weekly Active User Value: $12,548
Facebook Daily Active Users: 728m
Facebook Market Cap: $326bn
Daily Active User Value: $447
These number do look scary and are in fact very unfair. Comparing a start up verses an establish company is not where the un-fairness ends. Slack raised money at $2,500 per user just last year with 1m users, completing a round at a $2.5bn valuation. This shows that these high valuation per user is achievable, it's all about hitting critical mass and potential upside. There is however one thing these numbers do tell us, Steemit does have some space to fall in value in the short term IF some larger seller, or the community as a whole decides to try and cash some Steem in for BTC.
I checking in on https://steemd.com/distribution over a 24hr period and witnessed between the 3rd and 4th of this month the user base rise from 14,200 to 14,419, which represents a 1.54% increase in user base in 1 day. If that growth could be extrapolated out (very subjective and optimistic I agree..) this would represent 3.3m users within 1 year. That would be good, wouldn't it. Rather than suggesting that might happen, I'm mearly making a point that Steemit is a community that, if 1.54 in 100 users converted a friend a day, over 3 million users would be hit within a year. I converted 4 friends in one beer the other day... A large users base (not 3m necessarily) within a year is more than possible.
Steem's value is in the POWER it gives the holders to reward content and writers they like, and incentivise them to continue to provide this content. This power become ever more valuable the more the user base grows. It also creates a darwinian environment as it grows with only the best content rising to the top, and the undesired content going to jail for all eternity on the blockchain to never be read again. The more users there are, the more effective and fair the community becomes at picking quality content and rewarding it's creators.
True value will be hit if Steemit gets towards 1m users, and large corporations start buying Steem as an advertising tool. Using it for rewarding customers, and promoting content for promotional purposes, also at great value to the company, and with a level of engagement they could only dream of getting through Facebook. This is why, if you want to invest in Steemit and monitor how well your investment is going, you purely need to watch the user numbers.
Thus, I suggest (with a level of subjectivity which always exists when valuing any startup) that the upside potential justifies the currently value of Steem.
"True value will be hit if Steemit gets towards 1m users, and large corporations start buying Steem as an advertising tool"
This, I think has the most promising long term potential.
I was speaking to a friend of mine who works for a large car company in their advertising department. They pay roughly £5 per 'lead' on advertising when you average out their mixture of strategies. Imagine (that company invests $100,000-$200,000 in Steem, I haven't done the maths but that would a significant amount per upvote) having a million potential customers vying for their up vote. It has a viral nature of increase content based around that company and thus increasing brand exposure across the whole platform, let alone allowing companies to target upvote customers and to get potential leads from who is up voting what...
My strategy is to hodl as much as I can until 0.1% of current supply is in my Steem Power. Now it is about 0.04%.
Then I will fix 10% every zero added to capitalization starting from $1 billion. I think that is fair and transparent enough and would not harm our community.
It is realistic for Steem to reach 1 billion actually. A million users could easily bring Steem over a 1 billion dollar market cap.
I agree. In 2007 Facebook had 20m users and raised money at a $15bn valuation.
Valuation
http://www.fastcompany.com/1706359/facebook-valuation-timeline-do-we-hear-10-billion-50-billion-1-trillion
Users Number Year by Year
http://finance.yahoo.com/news/number-active-users-facebook-over-years-214600186--finance.html
I like the 'fair and transparent' approach to becoming a millionaire. At $1bn valuation that would make you $1m. Let hope for all our sakes this platform takes off!!
Might be a good idea for the people designing the interface to tell us exactly what percentage we have in Steem similar to how it works in Open Ledger.
And this is why I asked about the referral program. I did not break down the math like you but I did and do see a chance for that kind of viral growth.
Naturally you have intrinsic incentive to refer people. Happy people will curate your content thus you can earn more. Also you know that if people are coming value of your SP increase!
Exactly. The referral program works like this:
Yeah I have incentive to bring in new whale curators but not content producers.
The best content producers will be the new whales in a while.
Absolutely. What hipster said!
I can see that. I suppose they only wanted to incentives people to Curate and Create, and thought the user base would sort itself out. Often those referral programs can open certain platforms up to abuse..
What kind of abuse?
Creating multiple Facebook accounts to signing up for the referral rewards. Also, incentives can create a less engaged community where people are getting others to sign up purely for the referral bonuses, rather than to contribute to Steemit..
I see this very cool and a new breakthrough in the world cryptocurrency, let us know in the future development, cheers
If Steemit ever wants a possibility to scale (believe me, I want it to) the on-ramp needs to be FAR easier.
After I registered yesterday, I spent a significant amount of time differentiating between Steem Dollars, Steem, and Steem Power.
The entire platform is very overwhelming for a new user, and would be even more overwhelming to someone completely new to Crypto. I understand many early adopters have lots of experience with Crypto, but if this site is ever going to reach its true potential, it needs to be far simpler/better explained for new users.
Some sort of tutorial/walk through after registering is definitely needed.
That's very valid point. A walk through would be a great idea, or put a layer on top of the platform for non crypto currency users. It took me a while to get my head around the intricacies of the concept, and I use multiple crypto currencies every day.
I'm a bit skeptical that the platform has growth potential that can be fairly compared to Facebook. It is unlikely that it will become a major blogging platform.
Unlikely Yes, Possible, I believe so. It has it's very own hook, you don't need a million hits to get paid. Where there is money, people will come. I think it has potential, but certainly grant you it is unlikely. But I think the rewards outweighs the risk (risk for many people is only the time they put in)..
If people flock to steemit to get paid, where is the money going to come from? What's the value to the general public?
Content is the King
The money comes from cryptocurrency which is mined. Money is only an accounting language for value exchange. Content producers create value which drives demand for Steem Dollars and for Steem itself.
Steem doesn't have to be the next Facebook to be a success. If it reaches Reddit potential then it's a success and Reddit potential is not so difficult. The/r/ Bitcoin Reddit has over 100,000 members last I checked. Getting the 100,000 users on Steemit will be hard but if that is accomplished then Steemit could get to a million a lot easier because the content will take it viral.
I think all the fundamentals are in place for Steemit to become a major blogging platform. The incentives for content creators are best-in-class and the user base is already growing strong. Wait til ypu start seeing articles from major media about Steemit and the payouts.
"True value will be hit if Steemit gets towards 1m users, and large corporations start buying Steem as an advertising tool. " I was under the impression that this is exactly why steemit is different. We don't want ads and corporate influence...Maybe i'm wrong.
There is nothing anyone can fundamentally do to stop companies doing this, however one positive is that, if they don't contribute in a meaningful way, their invest will diminish over time with the inflation rate. The community can also down vote their content if it isn't in keeping with what the community want. They only influence Steemit the same way users can influence Steemit. It's a level playing field...
Whether we want them or not is not really the point. Anyone can buy Steem, even corporations. If they buy a lot, they gain influence. With influence, and assuming they have some followers loyal to their brand, they can "upvote" their own posts to the "hot" list and thereby gain lots of eyeballs. Think of it as a form of native advertising. There's no way to stop it even if we wanted to.
The one save grace if that ever happened, is that we would be more than compensated by the value of Steem, and the cost of acquiring enough Steem for a company to have that power would be huge...
wow fantastic
17 accounts added in the last 1 hour. I know the numbers are small, but give Steemit a few months, when friends of friends of friends begin to join, and we will be rocking and rolling!!
Nice review!