Analyzing Cryptocurrency Series #1 STEEM!

As promised, here is my first in-depth analysis of a cryptocurrency using the outline that I formatted in my last post. 

Found here: https://steemit.com/investing/@elderfinancial/my-in-depth-outline-of-how-i-analyze-cryptocurrencies

What better way to kick of this series than with my favorite crypto. 

It is my pleasure to introduce to you, known as the "Chatty Kathy" of crypto, for its constant barrage of blogs and information sent through it's networks, STEEM everybody! 

-George is the best clapper! 

1.) Coin Basics

   a.) Length of time coin has been on the market 

• According to coinmarketcap.com Steem has been on the market since April 18th, 2016. So just over one year. 
• One year is not a very long time on the market for any company and must be considered with a fairly high amount of risk, having little history to base your assessment off. 
• Considering the crypto space is only just over 8 years old, 1 year is decent amount of time.

   b.) How many coins are in circulation vs total market cap 

• Steem currently has 237,191,750 Steem in circulating supply.  
• Steem has a total market cap of $305,756,769
• This give Steem are current market price of $1.29 per Steem Coin  

   c.) What is the inflation rate? 

• Steem has a current annual inflation rate of 9.5% per year, reducing to 0.5% per year thereafter.  

   d.) What is the volume of the coin being traded? 

• The current volume of Steem being traded in the past 24 hours is $2,145,320 dollars’ worth of Steem.  

   e.) Recent activity of the coin?   

• Recently Steem has been on a downward trend falling just below $1 dollar at its lowest point yesterday but has pulled back up to its current price of $1.29  
• For more indepth analysis of the current Steem trend I look toward @stephenkendal
• Here is his most recent update on the Steem price: https://steemit.com/steem/@stephenkendal/steem-ranked-no-16-and-with-a-current-market-capital-of-approx-usd300m-steem-has-not-been-immune-to-the-recent-correction-in-the

2.) Technology & Direction of Coin 

   a.) Is this a unique idea or are they building upon something already established with a new twist? 

• Social media websites are not unique and that is exactly what Steemit is. 
•  Where Steemit is unique is that it uses blockchain technology to enable a new form of rewarding users of the social network for the value they bring to the network. 
• Instead of the value the users bring to the network going to the Facebook team and it shareholders, the users of Steemit are able to retain their value. 

   b.) What is the possible market cap? 

• As Facebook users reach 2 billion worldwide, I believe the possible market cap of users is realistically those 2 billion, plus more. 
• I believe the timing of Steemit to be very important in its success. 
• Many people are already using some form of social media and it is only becoming more popular with the youth throughout the world. 
• As this trend continues to grow, and if Steemit continues to evolve effectively to meet their demands, I see no reason why Steemit could not take over the market.

   c.) Are the current transactions use cases or speculative investments?

• Unlike many of the other blockchains at this point in time, Steem has one of the strongest use cases with Steemit. 
• Each, post, upvote, comment, or transaction is conducting a transaction on the network and putting Steem to use in the real world and not just through the hands of investors.  

   d.) What is the direction the company is heading in? 

• I believe Steemit to be heading toward the direction of adopting more mid to lower level users (minnows, dolphins). 
• After Hard Fork 19 (HF19), which made a large transition on how the network is run in terms of rewards, and voting power helped to set up the network for more lower level users by giving them more power on the network. 
• Here is link published by @timcliff, a witness of the Steemit network, on his reaction to HF 19 and what is has provided the network.
•  https://steemit.com/hf19/@timcliff/reactions-to-hf-19-linear-rewards-vote-strength-changes-in-payouts-self-voting-etc
• Delegating more power to the smaller users of the network will entice then to actually use the network and not just sign up.  
• If you are able to find a Road map for a company that is very important to give you direction of where they want to head and this is direct information coming from them, not through secondary sources from chatrooms, or Steemit. 
• Here is a quote from the Steemit Road Map for 2017,   

 “Goals,   

Our long-term goal remains the same: to provide the best platform for censorship-resistant publishing and store of value to the widest user base possible, in an effort to increase human freedom and accelerate the spread of access to basic rights for all people on Earth.    

In doing so, by growing the Steem Blockchain, we will have created a permissionless, censorship-resistant data layer for the entire Internet. The first obvious application is publishing, but the possibilities for applications on the platform are limitless. Vastly expanding this community has the notable side-effect of placing STEEM in the forefront as the ultimate blockchain-based currency.   

Our primary short-term goal is to drastically increase the number of weekly signups, weekly active users, and weekly social interaction events on steemit.com. It is our belief that in our attention economy, more readers, reading more writers, performing more interactions is the single best way to develop the overall value of and to the community, and thus the Steem Blockchain and its economy and token.    

Simultaneously with user growth, it is essential that we provide support and resources to entrepreneurs and developers building upon the Steem Blockchain as a platform. We recognize that steemit.com will be only one of many killer apps built upon the Steem Blockchain, and it is our goal to empower as many as possible who wish to build upon our platform and incredible community.    

To this end we have established a set of priorities for the near future upon which to focus our efforts.”   

Link to the roadmap: https://steem.io/2017roadmap.pdf   

   e.) Is the coin scalable? 

• As I am not a technical wizard. Due to this I thought the best way to explain it would be from the words of someone who does. Here is a comment from @dantheman on @cylonmaker2053 post asking, about the scalability, security, and points of failure.    

“In terms of website performance our underlying technology can easily scale.  The primary database that powers steemit is the C++ code that runs the blockchain. This database is trivially replicated and kept in sync across the globe. (The power of blockchains).  The internals are based upon the graphene code which is about as efficient as any database can be.  I see no problem with scaling our database or our front end assuming we have steady / predictable growth.   In terms of security, it is something we take very seriously. It is also something that is very difficult. Overall, our security is built on better fundamentals than most other blockchains for the following reasons:  

99% of the value is time-locked      and secured by owner keys

99% of activity is done with      posting keys which don't have access to spend funds

Keys never get sent to the      server

In the event our server is compromised, only users who load compromised HTML from our server are vulnerable. If this were to happen then most users would only have their posting key compromised.  Fortunately, this does not compromise their funds.  Some smaller set of users who login to do financial transactions with their active key could have it compromised as well.  In the long run, the best security will take the form of a browser plugin that manages your keys and prevents Steemit.com from swapping out the JavaScript that loads your keys and signs messages. We are taking measures to deploy watchdog bots that automatically detect changes in the deployed HTML and alert us to changes.  Nothing is perfect, but in terms of performance, scalability, and security I am sure our team is up to the task.” 

Here is a link to the blog post: https://steemit.com/steemit-issues/@cylonmaker2053/steemit-infrastructure-security-scalability-and-points-of-failure 

3.) Development Team   

   a.) Who is leading the development team and what is their history?   

• Lead Developer: Dan Larimer, creator of Bitshares and EOS. Here is a link of Dan’s #introducemyself post to the Steemit network about one year ago. 
•  https://steemit.com/introduceyourself/@dantheman/daniel-larimer--co-founder-of-bitshares-steemit 

• I also have posted some links of a recently posted video series shot by @lovejoy and @roadscape of “Cryptofresh Pictures,” interviewing @dantheman covering topics such as: blockchain tech possibilities; Bitshares and Steemit. 
• The videos were shot a few years back in April of 2015, but the content provided is very much relevant today. I recommend watching all 3 of these videos.   
• 1.) https://steemit.com/interview/@lovejoy/interview-dan-larimer-a-prescient-retrospective-part-1-of-3 
• 2.) https://steemit.com/interview/@lovejoy/interview-dan-larimer-a-prescient-retrospective-part-2-of-3 
• 3.) https://steemit.com/interview/@lovejoy/interview-dan-larimer-a-prescient-retrospective-part-3-of-3 

-Note: March of this year, Dan publicly stated that he would step down as Steemit’s lead developer as he was working on other projects.    

• CEO: While Dan is the lead developer, Ned Scott @ned runs the business side of things.    
• Here is a link to Ned at work back in November 2016, on an interview on the NYSE. 
• Published by @acidyo https://steemit.com/interview/@acidyo/re-post-due-to-popular-demand-ceo-of-steemit-ned-scott-interview-on-nyse   
• I also found this interview by @ashe-oro to be very in-depth and helpful to have some insight into Ned’s thoughts and views about Steemit and blockchain as a whole.  https://steemit.com/introduceyourself/@ashe-oro/hello-steemit-i-interviewed-ceo-ned-scott-on-steemit-com-the-future-of-social-media-liberty-entrepreneurs-podcast   

   b.) Are the leaders likeable? 

• You tell me, did you watch the videos?  

   c.) Who makes up the development team? 

• This is where I have run into a bit of a grey area due to lack of understanding, and I was hoping some of you would know more and could help me out with this section. 
• From what I understand the developers of the network are essentially the witnesses whom we vote on. 
• I know a witness is in charge of running a node and keeping the network up processing transactions, but I was unable to find data to support if they are the ones writing the code to be implemented in the future. 
• With HF19, I know they had to vote weather to implement it or not, but I am unaware if they are also the ones who are creating the changes as well. Pleas feel free to comment below and fill in my gaps.    
• Here is a good link that I used to find out more about a Steemit Witness. Produced by @steemitguide https://steemit.com/steem/@steemitguide/steemitguide-what-is-a-exactly-is-a-steem-witness-and-why-every-user-should-vote   

   d.) How has the team responded to problems that have come about? 

• The democratic structure of the Steemit Witnesses does pose a timing issue. They may not be able to respond immediately to a problem as they have to achieve consensus before implementing changes.
• So far as I can tell this has not been an issue. Please feel free to elaborate more in the comments below.    

4.) Community & Public Interest 

   a.) Number of transactions that are taking place per day on the network? 

• The number of transactions taking place on the Steem network is currently more than any other blockchain. They surpassed Bitcoin a few weeks ago if I am not mistaken. 
• Here are some great stats produced by @arcange, someone that I follow and read often. https://steemit.com/statistics/@arcange/steemit-statistics-20170711   

   b.) Alexa rankings? 

• Steemit currently ranks 4,287th Globally & 1,267 in the US for most visited website   

   c.) Social Media Pages (Reddit, Facebook, Slack, Twitter, Instagram) 

• Steemit is a social media website itself, so it is in direct competition to the others. 
• There was some content coming on Steemit a few weeks back that Facebook was flagging Steemit.com posts as spam and deleting them from their network. 
• I have not personally run into any issues with this, as I posted my last blog to my Facebook page to increase the amount of awareness and possibilities of Steemit to my Facebook friends. 

   d.) Community behind the currency?

•  Steemit has a strong community behind it, with currently around 20,000 users. 
• This is not a large number compared to some of the other sites, but when I look at this number it makes me think how much room there is for growth within the network.   

I hope this analysis met your expectations, as it is my desire to create a place you can learn and build upon the knowledge you already have.

I believe that we are in an age of information, but we must find ways to maximize on the information we are presented with. 

I hope by reading my reports you are all able to maximize your time and information processed to make the best investment decisions possible. 

Thank you so much for reading and please leave comments below with anything you would like to add to the conversation, or would like me to put into the next report. 

Cheers, 

Nick

 -Disclaimer- All the information on this blog is my personnel opinion and should not be considered professional financial investment advice. All information on this blog is for informational purposes only.