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RE: Can steem(it) survive its problems
all your points are totally valid. The Illegal content thing is probably the most serious and it can really be the end of steemit (at least the end of the domain "steemit.com"), especially considering how things can't be removed from the block chain.
I don't think the big issue is steemit.com. They can censor the illegal content. But censoring takes resources. The blockchain itself however. No idea actually.