The people who are active on this blockchain and working to accumulate some Steem Power are going to find it is one of the best things that ever happened to them.
Quite simply, the Steem system is set up to handsomely reward those hold Steem Power. Anyone who amasses any amount is going to be very happy down the road.
When will this take place? I have no idea. Markets are their own animals so we will just have to wait on that. However, we can look at other factors which lead me to this conclusion.
We are rapidly moving to the Age of DApps. Steem was fortunate to get listed a few different places. One, State of the DApps, is seeing a strong representation of Steem applications.
I pulled this last night from their website:
According to this, there are 5 Steem apps in the top 10 and 9 in the top 25. This from a blockchain with a token worth under 30 cents and is ranked 50 something on coinmarketcap.
Certainly, at these early stages, this story has little bite to it. Few in the general public are using blockchain applications so the volumes on them is still very low. However, the fact that Steem is ranking so well against the likes of Ethereum and EOS is saying something.
There is also another part to all this. Presently, there are around 40K accounts transacting on a daily basis. This is a number that could 25 fold very easily up to a million. An application having a million users is not a heavily used one, let alone the entire blockchain having that.
A million users on this blockchain will make STEEM go insane.
There is a simple reason for this.
According to Steemd.com, this is the amount of STEEM out there. There are 292M STEEM in total right now which means that would be 292 for each user. That means the average holder would be a Plankton. This, of course, is only the average and not the mean since there are many accounts already above that total. Even with the inflation rate of about 8.5%, there simply is not a ton of STEEM out there.
We have another aspect. There are direct transactions costs on Steem. That does not mean it is free. We get around this by having Steem Power. Presently, it takes 5-10 SP to post and do a couple comments. Anything beyond that requires more (I know it is tallied as RCs but you get my point).
If we presume 10 SP per account so they can be fairly active, that is 10M STEEM required. Right now there is about 87M on the open market.
What if, however, we see 5M user on the Steem blockchain? This jumps the amount of STEEM required to 50M.
Now, 5M users when we have about 40K daily sounds like an astronomical jump. However, when you look at it realistically, it is not much at all.
This is a list of the top 15 social networking site. Notice the smallest on the list has 35M monthly users. Please bear in mind, these are single applications. With Steem, the numbers are a totality.
If one Steem application makes it to 1/10th of Meetup, that is 3.5M users right there. Again, this is for ONE APPLICATION, not the totality of Steem. Try to envision what it could look like if there are a couple hundred DApps on Steem. Could the totality be used by 10M people?
It is not completely out of the question.
Going back to our original numbers, there simply is not 100M STEEM out on the open market. In other words, there are not enough STEEM left to accommodate that many people.
Which means, those holding STEEM need to be enticed to sell. The only way this happens if is the price gets high enough to stimulate some cashing out.
Ultimately, it is a basic supply problem.
The time frame could be a year down the road; or two; or three. Based upon the amount out there, it is unavoidable.
There is one other thing that comes into play here. It deals with the potential downside and how people typically view things.
It is a mistake to look at this like the DotCom bubble. This is nothing like that. Yes, one could equate the pricing of the coins to that bubble and the bursting that took place.
However, we must realize the DotCom dealt with companies. They were what was priced based upon nothing and when the music stopped, they went bust. Blockchain is not a company. The value that is provided is much different than a company. If you will, a company can be equated to the applications we are seeing. Nevertheless, the token is tied to the blockchain which derives it's "value" based upon what is on top of it.
At this point, the blockchain is not going away. There are enough people supporting it that no matter what happens, the blockchain will continue. Numerous posts dealt with different "worst case" scenarios over the past month so no need to rehash them.
Through it all, development continued. Some applications left while others folded up shop. The blockchain, however, just kept growing. There is more development taking place today on Steem than was when it was almost $10 a year ago.
I believe that the major point of exposure will be seriously lowered by mid-year. We are seeing Steemit Inc make progress on converting the data structure and reducing the size of the master nodes. This will increase the decentralization ensuring the continued running of the blockchain.
Steem is basically a highway. It does not matter the type nor brand of the automobiles driving on it. If one or two manufacturers have problems, the road does not care. New players are just as welcome as the old. A bankruptcy of one company does not affect the roadway. Invariably, other companies pick up the slack.
Work the numbers yourself and see what you come up with. Try to figure out a way where, with any type of user base on here, that the amount of STEEM does not encounter a supply problem.
This should make what is already in people's wallets very valuable.
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