It would be helpful to my account if you were to upvote this and follow me for more cryptocurrency discussions.
Disclaimer: I am not bashing the Steemit platform, which I do love using, but I am bashing the Steem coin which in my opinion is based on a highly flawed business model. You should not take this article as a professional investment guide and instead make decisions based on your own opinions and ideas!
STEEM IS FLAWED:
In today's market, most cryptocurrency investors are willing to buy coins based purely on speculation and not on the actual use or technical aspects of the currency. One such example is Steem. I can probably describe Steem's main issue with one sentence:
STEEM combines the best aspects of capitalism with the worst aspects of communism
The main point of steem is to run alongside with the steemit platform and incentivize blog posting and social media in a way that was never done before. Sounds great, right. Not exactly. Steem coins are generated upon demand. Something that leads to incredible inflation and therefore a drop in price.
How can this be? Don't other cryptocurrencies also generate coins on demand?
Well, technically yes. traditional cryptocurrencies generate coins to reward miners. The key here is that the miners are rewarded for contributing towards the economy, but in steem, blog posters give no contribution to the economy, instead they contribute to the separate steemit platform. See the issue here? The creators of steem tried to incentivize blog posting (the best part of capitalism) but instead caused unnecessary inflation (the worst part of communism, apart from the overall bastardness that is, killing, lack of resources, etc.). This means that Steem can only go down in value.
unless,
The value is equally increased by an increase of buy orders. This is where perhaps the worst part of steem comes in. Why would anyone want to buy steem? Like, seriously, what is the point of buying steem!? The only point of Steem for Steemit users is to sell it. You can't really use it for anything like bitcoin or other cryptos. Ya see, the only people buying steem are those speculating on the value and not understanding how it works. If people did understand this no one would buy steem as an investment and the price would crash. Don't get me wrong, I love Steem and Steemit and hope that for some reason I didn't take into account, the system works
Lol if too many people read this i cant make money off of it :)