STEEM inflation is overrated, LTC needs more than 12.5 times new money to maintain current price level.

STEEM begins 2018 with a bang $4.25 and $1B market cap! Still one may wonder that can STEEM sustain current price level due to daily inflation of STEEM. Yes, it can. We can analyze it from BTC and LTC's perspective.

As of I am publishing the blog, STEEM have reached All Time High (ATH) of $4.45 (where previous high was 4.34 back in July 2016)

Each day 1,800 BTCs are mined. One BTC is priced at $13500. A total of $24.3M equivalent of BTC has to be bought to keep BTC at current price. However, some miners can keep their coins. But it shows that BTC's demand is still increasing.

Source: http://www.bitcoinblockhalf.com/

Similarly, 14,400 LTCs are mined each day. Each LTC costs around $225, therefore, $3.24M worth of new money has to enter to keep LTC at this price level.

Source: http://www.bitcoinblockhalf.com/

On the other hand roughly 62000 STEEMs are produced a day. Each STEEM as of writing is around $4.2. Therefore, only $260K new money has to enter. One has to remember, STEEM is at early growth stage where BTC and LTC are already matured. STEEM is seeing one of highest growths in the cryptocurrency market by users.

Now imagine a future when STEEM is $40, then STEEMs market cap will be $10B still $2.5B less than LTC (e.g. LTC currently $12.5B). Then each day, $2.6M new money has to enter the market to keep $40 price tag for STEEM which is still less than LTC's demand.

One has to notice that STEEM is faster, secure and scalable than LTC. STEEM can work as transaction medium and store of value similar to LTC. Moreover, it has much more utilities. Lots of useful DApps run on STEEM blockchain. It has power-up, delegation and savings feature. In future when SMT will be released, it will have ERC20 like feature from ETH. Therefore, STEEM reaching $10B market in 6 months to a year is not far-fetched.

Here is quote for recent news at NASDAQ why SMT will be big success:

The problem does not stem from the fact that readers don't appreciate the professional news industry (even if it is widely criticized ) - it's that publishers struggle to monetize online publishing . And while publishers were busy trying to get print advertisers online, Google and Facebook ate their breakfast, lunch and dinner to the tune of a combined 63 percent share of all online advertising. Whatever value might have been left for publishing websites has been further decimated by the popularity of ad blockers.

Source: http://www.nasdaq.com/article/how-blockchain-based-cryptocurrency-can-make-online-publishing-more-profitable-cm895389

Happy new year (2018) to all my Steemitan friends.

Image sources: All images are open sourced (e.g. Pixabay) with Creative common license

Thanks for reading.
@riseofth
Cryptominer since 2013, occasional trader and tech blogger