STEEM: Powering the Social Media Platform (Rivalling Twitter & Reddit?)
The social media space has become quite crucial in modern days with the likes of Reddit and Twitter becoming part of our day-to-day lives. The biggest capital of these platforms is their expansive user community and this is the basis of Steem, a new cryptocurrency network which rewards its users for writing great content on its platforms, as well as liking and commenting.
Breaking down the Steem network
Steem can be quite confusing especially for first-time users. Here is a breakdown of the basic terms:
1. Steemit: This is the platform where users create and curate content, much like what happens on Reddit. It was launched in July 2016 and its user base has grown considerably since then. Posting and curating content on this platform is rewarded with either Steem dollars or Steem power.
2. Steem: This is the basic unit of account in the Steem blockchain. It determines the value of the other units i.e Steem power and Steem dollars. As a currency itself, it’s not of much use but it is the gateway between the platform currency i.e Steem dollars and the general currency such as the US dollar or even bitcoins.
3. Steem dollars: These are the basic units used to reward users on the Steemit platform for posting and curating content. It represents the Steem equivalent of one US dollar. This is not fixed and fluctuates depending on the market conditions. The Steem dollars earn a 10% interest every year.
4. Steem power: This is a token indicating just how much power you have on the Steemit platform. You are only allowed to vote if you own Steem Power and the more Steem Power you have the more your vote counts. You can cash your Steem Power into Steem in a process known as powering down but this is done in a gradual process expected to last two years to protect the system from collapse in case every user decides to cash out.
Should you invest in Steem?
Steem currently has a market capitalization of $257 million with one unit going for $1.04. This huge market capitalization shows the investor confidence in the platform and its ideals. Speculative investors may want to cash in on Steem as its price should gain considerably, in line with most digital currencies which are experiencing a boom season. Long-term investors should, however, hold back for now as there are still many rough edges that Steem is yet to smoothen.
For one, Steemit platform’s success was pegged on the notion that it would become a platform where users just post content for the joy of it like Reddit with the financial gain being just a second thought. This would create excitement and lure in, even more, users which would continually grow the user base. However, the posts are just commercially oriented with people only posting the content that is likely to make them money from upvotes.
The other issue is its accommodation of new users. When one becomes a new user and posts content, this content is not likely to get any upvotes. When a more experienced posts an exact replica of this content, they may end up making hundreds of dollars from it. As much as this bodes well for the experienced users, it discourages new users from becoming active users and they end as just a huge group of users who never transact or post on the site. This could lead to its demise if a solution is not quickly sought out.