Why would anyone buy STEEM? You don't need more than your 10 starting STEEM to post, comment or read stuff on steemit.
The only reason to own STEEM that I can see is to get even more STEEM by posting and curating content. If the price of STEEM remained steady or increased, that would be good enough.
However, there is a 100% yearly inflation. Assuming the market cap remains constant, that means each STEEM will lose half of its value by next year. That is a tremendous downward pressure: why would anybody invest into something that loses half of its value every year? Unless the market cap increases, but that brings us back to the first point: why would anybody buy STEEM with USD or any other fiat?
There is also another risk: even if you buy STEEM and power them up, you might end up losing more money to inflation than you will make from contributing on steemit, if you are a less popular than average contributor.
I really cannot figure out the economic model of STEEM.
If nobody has a good reason to buy STEEM, then the currently rising price is a bubble resulting from pure speculation. What is going to happen 2 years from now, when huge volumes of STEEM have been powered down and nobody is there to buy it?
In the past few days Steem has exhibited an amazing and explosive growth like no other cryptocurrency. Naturally, such a rally invites criticism from traders, proponents and competitors alike, and indeed Steem has been accused of being a pump and dump scheme.
Let’s start from the end: Is Steem under a pump and dump scheme?
There seems to definitely be an element of pump and dump surrounding the recent price moves although this is probably not the full story.
A lot of projects are starting to see an increased coverage in the news which is drawing people into looking at Steem more deeply. This is a self-perpetuating cycle as the more the price moves, the more people become interested, the more articles are written and the more the price moves. Classically this has characteristics of a bubble but the underlying characteristics of Steem could be potentially huge. It comes down to valuation and whether the value is being overhyped or not.
How can this thing be workable long-term?
They will have to "print" more and more steems to pay off all the new user's content, there will be new contents everyday and more users everyday.And on top of that they will have to print more steems to pay all the steem power users How can the currency retain its value in the long run? I understand the steem power system where funds are locked so they can't be sold but this is bandaid solution to an hyper inflation system
The payouts are so ginormous now only because the market cap is up.
Basically the more users on the site the less reward for everyone, so how is any of this sustainable long term? it should be the exact opposite.
In the long run, we are all dead, and nothing is sustainable, look at Reddit, LOL.
Indeed, and steemit is an elaborate ponzi. Better get in and out before everyone else.
It is not sustainable. It is like a drug. You get all this money but the money will stop. Then no one will use it.
The creators of Steem beat everyone to the punch. Once the world realizes the profit they can make out of the site all hell will break loose. They will be flocking over there so keep quiet and don't say a word if you haven't accumulated your fair share of steem.
Steem is a steeming pile of trash. It is absolutely NOT sustainable long-term. Who would have thought that a "project" by the infamous Larimer gang would be another pathetic, worthless, money grabbing scheme to ripoff the naive? Just say NO to the Larimer trash and their anti-free speech Chinese communist backers!
You can't compare it with the fiat system which is only a few % inflation, steem is 100% inflation/year.