Why Steem/Steemit Has Value (Opinion Piece)
There has been talk on Steemit on where the money in Steem or on Steemit comes from. I believe people are asking the wrong question. I believe the question they should be asking is where does the value of Steem and Steemit stem from or originate. Simply put what gives Steem/Steemit value.
To understand where "value" comes from we must understand the definition of value.
The definition of value is the regard that something is held to deserve; the importance, worth, or usefulness of something.
Let's Take a Look at bitcoin the First Decentralized Crypto/Digital Currency
When it first started in 2009 you get multiple bitcoins for a penny. Now one bitcoin is worth or has a "value"of about $574 at this time of writing. At one point was worth about the same as an ounce of gold in 2013. So what was it that gave bitcoin it's value? Well there were a great number of things:
1. Limited supply
2. Decentralized
3. Counterfeit proof
4. Not controlled by government
5. Accounts could not be frozen
6. Irreversible transactions
7. Full control over funds
8. The ability to send money/value anywhere in the world instantly with the ability to spend funds after about 10 mins
This is the first time in the world that we have the ability to do things that were once thought impossible with digital information. Simply putting money into something doesn't necessarily give it value it merely establishes a price. People can then decide if the price or "evaluation" is right and buy giving more value or sell taking value away. The real value comes from something's usefulness or importance.
That is why bitcoin and other crypto currencies have value. Bitcoin has the advantage of being the first decentralized digital currency thus being so valuable in comparison.
Now Let's Talk About Steem and the Platform Steemit
Even though it is about six months old it has reached number three in market cap is currently at the fourth spot as I write this. So why was Steem and Steemit able to achieve so much value in so little time.
First of all, is doing something new and innovative. It is built around a social media platform which consist of three individual currencies. This is very unique to any other crypto currency on the market.
Similar to Bitcoin, Steemit is the first social media platform based crypto currency. No other crypto currency has done that so Steemit even though not being the first crypto currency created will have first mover advantage for any other social media platform based crypto currency to follow in the future.
One big reason I believe Steem/Steemit has so much value and I don't believe I heard from anyone yet is the ability to store and access information with such ease whether it is true or false it is all information. The blockchain is not biased in what it stores so anyone can store anything. Yes bitcoin does have this ability, but Steemit has made it in such a way that anybody who is on social media can jump on and participate, whether it is blogging of voting or commenting.
People don't have to understand how it works to use it. This lowers the barrier of entry making it easy for people to enjoy which in and of itself has "value".
Steemit is competing on two different planes. It is competing in the crypto currency world and in the social media world, and it is bringing new things that the others don't provide. In the crypto currency world is bringing a social media platform. In the social media world is bringing monetary incentive for participation. It is bringing out the best of both in one.
People might also find Steemit valuable for one simple, but very important reason. They are not being barraged by constant advertisements in which other social media websites get all the value from and users get absolutely nothing but irritation and annoyance.
Hopefully this answers some questions on where the value instead of where the money comes from on Steemit.
But you can apply this to anything. Why does anything have value?
Ultimately, it's because we give it value.
OK leaving aside all the confirmation biases this post is inevitably catering towards I think you make some good points. Ultimately I think what is so cool about steemit is, as you mentioned, the fact that you don't interact with the blockchain side of things and the UI is completely seamless. It's amazing to someone who is a blockchain fanatic that we are finally seeing the commercialized mass appeal apps like steemit. Also, a model that will hopefully optimize for great content and a fair reward system is pretty cool too ;)
One other note is that actually the value of bitcoin and essentially all speculative investments come from the perceived use rates at some discounted future time. The current steemit price reflects how the market believes steemit will grow in the future discounted on the basis of net present value, not on the current use rates.
Lots to consider here thank you. As for value of Bitcoin imagine an average person`s wallet and how they carry say $200 around with them most of the time. What will happen when even say 1% of people want to keep $200 of Bitcoin in a wallet just in case they need it?