One of the biggest problems of Steem, as a startup, is scalability. Not only from a hardware point of view, but also from a user acquisition point of view. That's probably why the next hardfork, 0.20.0, is codenamed "velocity", to increase the growth speed.
Discounted User Creation
As of now, if you want to create a new account on the Steem blockchain, you have to pay a fee. The fee is set up by witnesses and currently is at around $1. So it should be the "blockchain" which pays that fee, but the workaround in place now is the Steem Power delegation operation. If you want to create a new account, you delegate some Steem Power to that account, in order for it to have a bit of a "flesh". And then you can get it back.
But if Steem wants to scale to hundreds of millions of users, like Reddit, this approach is not feasible. It's simple mathematics. Even with the current 9.5% yearly inflation, the blockchain will run out of Steem pretty quick. As a side note, I've been asking about this since a year ago, back when I was still hanging around on the Steemit chat daily. As you can expect, I was laughed about. When I was not discounted as being plain dumb and not knowing "how things work". But that's another story.
Back to our next hardfork.
In the Velocity hardfork, we will be able to create accounts with an alternative method, called "discounted account creation". Each day there will be an allocated quota of accounts that can be created and people will be able to do that if they mine.
Right. By mining.
Early Days Steem Mining
In the very early days of Steem, there was a mining option, until the mining queue was hijacked by the (in)famous "rabbits" (or accounts that had the word "rabbit" in them, followed by a number, probably all managed by a single person). There was probably a bug in the implementation of the mining algorithm or those persons had a lot of hash power, fact is that mining soon became a non-option for many people, because only 1 or 2 persons were able to compete for the mining queue.
In an attempt to solve this situation, Steemit INC made another try, this time with equihash as a PoW algorithm (the same one used in ZCash) but it didn't work as planned and mining was abandoned entirely. The quota that mining had for block production was very low anyway: about 5% of the total of the blocks produced was allocated to mining, the rest being produced as it is right now, by witnesses.
What To Expect
So, with Velocity we will be able to create accounts by "mining" them. Quoting from the official 
Mining will use Litecoin's scrypt algorithm as it is battle tested. This will only be used for creating accounts through the discount system and not for block production.
I still don't know how the UI will look for this, or if there is going to be a UI for it. But things are moving in this direction fast, according to these issues seen on Github less than a day ago:
I can see a few caveats coming up:
- accounts can (and probably will) be created as assets and then resold for a profit (I'm neutral on that, it's already happening)
- depending on the implementation, account creation by mining can add a layer of privacy to the accounts created (this could be a good thing)
- number of accounts will grow very fast (witnesses will probably allow a bigger quota in the beginning) and that may create some "learning curve" bottlenecks (we saw the amount of "spam users" increasing every time we opened the gates more).
Thoughts?
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me 
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If you're new to Steemit, you may find these articles relevant (that's also part of my witness activity to support new members of the platform):