What Should STEEM Be Valued At?

What should STEEM be priced at?

I've read the whitepaper and read several discussions concerning the matter.

Some will argue that STEEM should be valued at $1 US, while others say that it should "...go to the moon..." .

I personally believe that both are right AND both are wrong!

Image from http://fred.stlouisfed.org

While the above graph isn't necessarily an accurate depiction of US inflation, for this discussion it will serve as an example from which I can base my argument upon.

Why are most people getting into the crypto market?

I believe many are getting into it as a way to make money quickly, easily and in a non-taxable manner. There is nothing necessarily wrong with such an approach. While short sighted, it does have sound reasoning.

Personally, I see STEEM as a potential store of wealth which has the potential to be used as a currency.

For something to be considered money (for practical purposes) it must hold value, something the USD has rarely done for any significant period of time since the inception of the Federal Reserve.

Basically, it comes down to which USD we would like it to maintain purchasing parity with.

In 1913, a gallon of milk could be bought for about $0.04. This means $1.00 could purchase about 25 gallons of milk.

Today, a gallon of milk can be bought for about $4. This means $1.00 could purchase about a quart of milk.

Which USD would you like STEEM to be pegged to: The one that gets you 25 gallons of milk or the one that gets you 0.25 gallons? This is a no-brainer.

It matters not how many currency notes are in your pocket or the denomination of those notes. What matters is what a person can purchase or pay for with those notes!

If STEEM is pegged to the USD, then every time inflation increases both USD and STEEM will lose purchasing power, hence value. At that point, why invest your USD in STEEM when STEEM will be losing value as fast as the USD you purchased it with?

If we were to peg STEEM to the January 1st, 1913 USD, STEEM would be priced at about 184.70 USD in November 2017 purchasing power. While this would be heck of a boost to the price of STEEM, that price would probably collapse quickly as people sell their STEEM for USD.

I believe that STEEM can eventually reach such values, but many hurdles must be jumped for that to occur.

There are things that we can do to stabilize and increase the value of STEEM and SBD

1: Savings.
Every STEEM or SBD that is saved is a STEEM or SBD that isn't available for purchase for a period of 3 days.

2: Power Up.
Every STEEM or SBD that is used to Power Up is a STEEM that isn't fully available for purchase for at least 91 days.

3: Vote for quality content.
Voting is essentially an indication of how much you believe a post should be valued. I'm not going to say how users should place value on content, but I will say there is a LOT of content out there that doesn't get looked at much. There are lots of diamonds in that posting-rough and there are only seven days to find them!

4: Keep your SP working.
How many SP go unused every day? The more SP are utilized, the more value the SP will have. If you have SP you aren't using, then delegate them to a curator who you believe will use them wisely.

5: Utilize STEEM and SBD in real life!
This is easier said than done, but it can be. Develop real world utility. Next spring I will be accepting STEEM and SBD as payment for produce at my farm stand and will be willing to compensate any workers who wish with some STEEM or SBD as it becomes available to me.

6: If you're going to promote a post, use the promote button (@null)
While not necessarily the best way to promote a post, it does take SBDs out of the financial system, increasing the value of the remaining SBDs.

With time, perseverance and work the price of STEEM can be pegged to the 1913 USD, which is kinna like it "going to the moon".

Feel free to comment and/or resteem.