Measuring Steemit Growth: What Every Investor, Developer And User Should Know

in steem •  3 years ago  (edited)


It was just the other day that I’ve posted an essay arguing that Steemit could be the first compelling mass market solution to date. The simple reason for concluding that, was its unique double-layered architecture: a powerful technological and economic layer with the right incentives in place, coupled to a deceptively simple yet exceedingly flexible social layer – effectively putting in motion a snow ball, which, given enough time and mass, could easily turn into an avalanche. Presumably exactly what would be needed to finally bridge the crypto chasm and penetrate the mass market. 

Indeed, as Paul Graham rightly notes, the only thing essential to a startup is growth. Everything else follows from that. Here’s an enlightening quote from one of his essays called startup=growth, explaining why that’s the case: 

“It's hard to find something that grows consistently at several percent a week, but if you do you may have found something surprisingly valuable. If we project forward we see why.

A company that grows at 1% a week will grow 1.7x a year, whereas a company that grows at 5% a week will grow 12.6x. A company making $1000 a month (a typical number early in YC) and growing at 1% a week will 4 years later be making $7900 a month, which is less than a good programmer makes in salary in Silicon Valley. A startup that grows at 5% a week will in 4 years be making $25 million a month.”

But if growth is such an important matter, then surely, we should be constantly monitoring it. After all, what gets measured, gets managed. 

Steemit Growth Rate

In examining Steem growth, I’ll try to go through what we currently know, put things in perspective, and finally take a step back to look at what we desperately need to find out. 

1. Transactions Volume: has experienced a significant growth since 4th of July and has reached a healthy state where on most days we see on average more than 100,000 transactions per day. By contrast, Bitcoin has on average more than 200,000 per day, and Ethereum less than 50,000. 

2. Registered Accounts: presently Steemit has passed 60,500 registered accounts and has grown with ~17,500 new accounts or ~40,5% during the last 14 days. That’s 1250 new accounts or ~2,9% per day. As it stands now, we could reach ~75,000 – 80,000 registered accounts by the end of August. 

3. Community dynamics: the community is growing and evolving at a rapid pace. Indeed, people seem to be very adaptive and strive to understand, contribute and improve things as much as possible. There are also disagreements and some apparent conflicts of interest between some well known community members(whales), but things are moving forward.  Indeed, I have not seen in crypto a community as diverse as this one. In fact, I am quite impressed at the rapidly growing number of well-connected influencers which have jumped in. As @roelandp put it, you’ve got Playmates, Vigilantes, Pirates and many others with hundreds of thousands of followers. Try to imagine what will follow.

4. Ecosystem/exchanges/developers: The ecosystem is also booming. Indeed, if you look at steemtools.com you can see that we have already 59(!) listed tools and apps. Number of exchanges has also increased. Although Poloniex and Bittrex were there, you can see that another three have listed Steem: Livecoin, HitBTC and alcurEX. 

What’s even more intriguing is how involved various community developers are. And yes, the number is growing. Indeed, this seems to be at least in part due to the direct and immediate rewards they receive after implementing a solution to one of the many community needs. As things stand, this may be one of the most interesting platforms developers should engage. The reason is simple and potent: incentives. They’ve got both healthy immediate rewards, and promising future prospects if Steemit succeeds. 

5. Investors, VCs, Startup Founders: another important metric to consider is what some of the bright minds of Sillicon Valley tend to think about the platform. Why? Well, because a good word from some of these people can add a lot of value and credibility to a very early stage platform and so significantly increase its exposure. Indeed, this kind of exposure is like gold, since it not only exposes Steemit to people who would merely love it if they would hear about it, but exposes it to other investors, VC’s or startup founders which could add significant value to the platform if they would join. Among these kind of people you have Fred Wilson, top Sillicon Valley investor, who is rooting for Steemit, Fred Ehrsam, Co-founder of Coinbase, mentioning it in his essay, Albert Wenger, early stage VC, mentioning it in his essay and many other startup founders who have already joined the platform. 

Some Hard Questions

Although the overall data seems to be pointing toward a positive scenario there are some pertinent questions one must ask in order to get a clearer view of the data. 

As @anonymint rightly pointed out in response to my other essay, one cannot get a real grasp of the growth rate without taking the attrition rate into account. Indeed, as the attrition rate seems to be ~66%, it seems really important to understand why it is so high. 

In fact, it would be great if we could further enhance the understanding of our data and in addition to what we know, find out the number of unique daily and monthly visitors, difference in number of bots versus real humans, as well as some demographic information.

Conclusion

As I said before, Steemit is an early stage experiment which could eventually fail in any number of ways. Thus far however, evidence suggests it is gaining an enormous momentum. Not only are the current data points impressive, but when you understand that all these results have been achieved in roughly 4 months from launch, you can only imagine what can happen in one, two or three years. 

In fact, it seems quite normal for people in crypto to call this a scam, a Ponzi, or whatever. Some of them are ill intentioned, some frightened and others simply ignorant. But make no mistake, we’ve been here before. Lots of rather educated people called Bitcoin a scam, a Ponzi and a few other things. Still, some overcame the initial prejudice and the rewards were not small.

Now, you have seen the data, have the great benefit of recent history yet as with most things, there’s no guarantee. The only thing you can do is make a bet. Either by buying Steem, investing time, coding, marketing, or bringing any other contribution for that matter. 

One year from now, you’ll be feeling either lucky because you’ve joined or disappointed because you’ve missed the ship. Either way, put it only what you can afford to lose and above all, choose wisely.

Thanks for reading,

@xtester


References

Photo credit 1

Data credit 1: https://steemd.com/distribution

Data credit 2: https://steemle.com/charts.php


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Just what i was looking for! Thanks for this great contribution. I admittedly havent read the whole thing, but I will be back to catch the rest. I am feeling the steem hype :)

Good analysis. Easy to understand.

I wonder why the transaction rate collapsed the way it has. Perhaps it is because the steem price has dropped and some people are holding back from sending their steem to the exchanges to sell.

Regarding attrition rate, one could also just ask the people involved instead of guesstimating from the data.

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Hard to ask people who aren't around though!

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I've seen @anonymint going around interacting with people who brought their friends and they were explaining why their friends left.

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Good point. I guess I'll add more points on that in the next analysis.

@xtester Most Excellent Post. I did want to say that I did post prediction Sub. numbers similar to yours Here.
And as for attrition of users, that is a good variable to consider. One problem with that though, is that I have seen accounts that were opened 60 days ago, and only now are re-logging back in, so numbers here can be tricky. And I fully agree with everything you say in regards to this being LIKE NEO "THE ONE." Check out my blog if you can @xtester I do have some different stuff there. Thanks.
full $teem Ahead!
@streetstyle

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Thanks, will definitely take a look at that.

nice post

This is a great article; clear and informative. I too will be keeping my ear to the ground, but highly optimistic with its' direction (steemit) thus far

Great article!

One small correction, if the number of user has grown by ~17,500 in 14 days to 60,500, then the growth rate is ~2.46% rather than ~2.9%.
This matters because if you start with 1000 users and you have a growth rate of 2.46% per day, after one year you have 7,117,677 users.
If instead you grow by 2.9% per day, after one year you have 34,010,403 users which is 4.7x more.

excellent article @xtester! Can't wait until this really blows up :)

Good job xtester, this is real and deep.
keep it up

great read @xtester ,I have put together some spreadsheets and charts you may find interesting
https://steemit.com/steemit/@me-tarzan/steem-daily-data-8-15-2016

"Indeed, as the attrition rate seems to be ~66%, it seems really important to understand why it is so high."

I have argued that the reason for this is the minnow-rewards are not great enough here: https://steemit.com/growth/@freewill/the-number-of-active-users-is-on-the-decline-let-s-talk-about-why-and-solutions

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This could indeed be part of the problem, thought I'm not convinced yet it's the root. Thanks anyway.

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It isn't clear how you are measuring attrition rate, is that someone that signs-up, upvotes once, and hasn't been back? I think this is to be expected initially in the sense that people are marketing their own blogs here, their (my) readers join to like or comment my articles, but it will take time for more than a couple of them to start coming here for any reason other than me.

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Agree. Will probably talk some more about retention in the next analysis.

Great post.
Any good project has growing pains. Sometimes it's because of flaws that need to be addressed, sometimes it's the wrong people influencing in unfavorable ways and sometimes the market just does what the market does, shaking out weak hands.
Where's that chasm from here? That's the question, isn't it? With current momentum, it seems like reaching it is all but given. But are we 20% of the way there, or 80?

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Yeah, it does seem we are on an interesting trajectory. Though I think until we will reach a critical mass or tipping point, things are far from inevitable.

As I said before, Steemit is an early stage experiment which could eventually fail in any number of ways. Thus far however, evidence suggests it is gaining an enormous momentum. Not only are the current data points impressive, but when you understand that all these results have been achieved in roughly 4 months from launch, you can only imagine what can happen in one, two or three years.

Steem solves so many problems that have long been subjects of discussion on discussion forums since the inception of discussion groups, problems that have grown in scale the more people got involved. The adaptations to the algorithms that help moderate the discussions can be applied quickly and rapidly accelerate the process. This is why Steemit is growing so fast. It has already changed several times with new improvements.

As someone who is extremely new to crypto and this community, this was extremely helpful for me in gaining more insights about what's going on around here! Thank you!

Thks for the chart

Nice article. I think that if Steem can keep on growing its user base and there are no massive sell​ings of Steem then the platform will be okay

Appreciate this artical. well done

@xtester thanks for this

Is important to keep the registration of that events. In some years the size of steemit can be huge.

Thanks for the detailed analysis. What stood out for me was the growth in the number of transactions. Once Steem best Bitcoin in this metric, it'll be a real milestone.

Not to mention a bragging point ;)

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Good to see you here @nxtblg. :)

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Glad to be here, @xtester .

Care to speculate on the future price of Steem? :)

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I think it's hard to make any reasonable prediction short term. Long term however, if the growth continues, I don't see why we could not overtake Ethereum. It all boils down to growth.

Great post :) naturally show steem situation

Good article, I'll have to do a 2nd read when I return home. /// nice information inside ///

The real difference between Steemit and other altcoins, is the fact the community is choosing to add content. The creation of content by a user community is a huge advantage for growth. Look at facebook, twitter, instagram, and now even LinkedIn. Content and involvement is the key to success and longevity.

So it is not just alt-coin speculation like we have seen in the past. As long as the community feels like their content and participation are meaningful, valuable, and rewarding then Steemit has a great chance. If however, new members become quickly disillusioned, like a few of my friends I brought in, then we are at risk of being an interesting test-case before another initiative does a better job. So, we best get it right. Either way, there will be competitors.

I have been making very similar points to comments and posts over the last 48 hours. It is refreshing to see someone expand on this in some detail and depth and provide an excellent Bell Curve graph to illustrate. Thank you for this!

Why is everyone's account total value dropping like a stone at this very moment? the price of STEEM is not moving? Has the supply of STEEM in the system changed drastically, in the past 7 days?

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The value in your account is the average of the last 7 days of steem. Not the current price. As price had been going down that number will too for a bit.

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The price of STEEM has dropped, more so today. I exchanged some of my bitcoin for STEEM earlier this week for the first time and it was priced around $170 - earlier today it was around $1.60 now I see that it is around $1.44_http://coinmarketcap.com/

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If you are referring to the account values shown in the Wallet screen that uses a lagging price indicator (7 day median) and will continue to rise or drop for several days after a big change even when the price has stabilized.

Do you want to give an update on your analysis? I'm really curious if you have some new insights.

Hope you see this ;)