Well I strongly believe you should never leave too much cryptocurrency in any exchange as you are leaving yourself to vulnerabilities that could be easily prevented with hard wallets, USB...etc. The vulnerabilities can be the work of internal or external hackers and believe me hackers are only going to grow.

I see exchanges as a quick way to buy cryptocurrency because I'm not a miner. The only thing that you have to be cautious about is the information you are giving them about yourself. Use a bank account/debit card you only use for cryptocurrency or use one that has very low funds. I have several bank accounts for this reason. It may seem paranoid but if you were ever robbed you won't feel like an idiot.

When I try to simplified my understanding of the blockchain technology behind STEEM I don't worry on the legitimacy of it as I have never spent any money buying STEEM. Because you can earn it through writing posts (posts of which id written on Reddit for free anyways and only get points for), I don't see a reason why not just continue to work for it. It's no different than YouTube. When I studied YouTube, you don't really start making money until you get 1 million views and before that YouTube makes a lot of money from advertising ads . There's always a give and take especially for something that's created more extensively. Seeing how steemit is growing I don't see it going anywhere.