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Steemit

Steemit
Steemit-big.png
Type of site
Social news community
Available in Mainly English
(content is also available in several other languages, e.g. German or Spanish)
Website www.steemit.com
Registration Free. Mandatory for editing.
Users 871,918 (as of 17th March 2018)[1]
Launched March, 2016
Current status Active

Steemit is a blogging and social networking website that uses its Steem blockchain-based rewards platform for publishers.[2] The Steem blockchain produces Steem and Steem Dollars which are magic bean tokens obtained for posting, discovering, and commenting on content.[3]

Steemit, Inc. is a privately held company based in New York City and headquartered in Virginia. The company was founded by Ned Scott, and Dan Larimer, creator of BitShares, and EOS.[4][5]

History

On July 4, 2016, Steemit, Inc. officially launched Steemit, a social media with virtual currency rewards that runs over the Steem blockchain. On July 14, 2016, Steemit announced on their website that they were hacked. The attack, according to them, has compromised about 260 accounts. A little less than US$ 85,000 worth of Steem Dollars and Steem are reported to have been taken by the attackers.[6]

Concept

User accounts can upvote posts and comments similar to other blogging websites or social news websites like Reddit, and the authors who get upvoted can receive a monetary reward in a cryptocurrency token named Steem and US dollar-pegged tokens called Steem Dollars. People are also rewarded for curating (discovering) popular content. Curating involves voting comments and post submissions. Vote strength and curation rewards are influenced by the amount of Steem Power held by the voter.[5][7]

Steemit includes third-party applications, such as d.tube, a decentralized video platform based on the InterPlanetary File System (IPFS) protocol. D.tube is similar to YouTube, but without advertisements, instead uses the built-in Steem currency which gets awarded by users upvoting videos.[8]

Monetary system

Steem is based on the Smart Media Tokens (SMT) protocol, developed by Steemit. As of December 2017, CoinMarketCap.com listed Steem with a $475 million market capitalization, and ranked Steem tokens 32nd of 1,358 cryptocurrencies. User actions, such as upvoting facilitates Steem's Proof-of-Brain algorithm, which also factors in the Steem Power a user holds, to provide incentives for content creators and the community by transferring small amounts of the Steem token currency.[9]

Steem began with a highly inflationary supply model, doubling roughly every year.[5] However, due to community demand, on December 6, 2016 the inflation rate of Steem was changed to 9.5% per year, reducing by 0.5% per year.[10]

Usage and media coverage

As of Nov 2017, there are more than 450,000 Steem accounts.[11] After an initial public beta for which no payments were made, the hard fork on July 4, 2016, saw $1,300,000 of Steem and Steem Dollars paid out to Steemit users.[12] According to company reports, since October 2017, $30 million were paid out to over 50,000 users.[13]

The exchange rate of Steem compared to Bitcoin rose continuously during July 2016, peaking at a price of over 4 US dollars.[5] July 20, 2016, Steem had a first notable peak of market capitalization with about 405 million US dollars.[14] As of December 16, 2017, its market cap is 525 million US dollars.

Steemit Statistics

Date Alexa Ranking Registered Users Active Daily Users Steem Price SBD Price Steem Price in BTC Available supply
2017/11/12 2173 455,023 26,571 $0.80 $0.94 0.00014427 259,520,439[15]
2018/02/12 1054 757,070 61,029 $4.10 $4.77 0.00050421 263,992,279[16]
2018/03/12 932 819,288 58,020 $2.51 $2.52 0.00026274 265,304,547[17]

Steemit was described as a novel and "disruptive blockchain-based media community" by Adam Hayes (Investopedia) in July 2016.[5] It got media coverage in cryptocurrency- and business-related media.[18][19] Author Neil Strauss, a Steemit member, wrote an article for Rolling Stone calling its reward distribution "particularly clever" and echoing the sentiment of its disruptive potential.[20]

Andrew McMillen explained in Wired Steemit's function being rooted in 777transparency with every vote and transfer being viewable to the public from upvotes on posts to wallet transfers. Unlike most digital currencies which are difficult to access for the majority of the world without any money to invest, Steem removes the friction for the average person to join in the cryptocurrency world by allowing earnings via posting without needing to buy in first.[13]

Criticism

Joe Lee, co-founder and CIO of digital currency trading platform Magnr, told CoinDesk, "Whether Steem succeeds as a digital currency will be more a reflection of Steemit’s success as a platform as opposed to the economics of the coin itself. This is a good example of a digital currency whose value will be closely affiliated to its utilitarian value as a social networking and sharing platform."[21]

"I'm skeptical about 'appcoins'/'appchains,' and Steem is very much one," stated algorithmic trader Jacob Eliosoff.[21]

Decentralize.Today published an overview of the platform and blockchain, pointing out how the developers did not allow users to mine Steem and then relaunched the currency to assure centralization (whoever owns the majority of the blockchain can authorize other people's transactions). Tone Vays said that the system is a Ponzi scheme.[22]

References

  1. ^ Source: [1] (Steem SQL Database)
  2. ^ The Concept and Criticisms of Steemit. Economics of Networks Journal. Social Science Research Network (SSRN). Accessed 25 February 2018.
  3. ^ "Steemit: New Social Media Platform Which Pays You to Post". Cointelegraph. May 9, 2016. 
  4. ^ Steemit Social Media Platform Pays Its Users, Sees Massive Growth; bitcoin.com; June 9, 2016
  5. ^ a b c d e Steemit: The Disruptive Blockchain-Based Media Community, Investopedia, July 26, 2016
  6. ^ "Steemit Website Hacked, CEO Promises to Reset Accounts in 48 Hours". Cointelegraph. July 15, 2016. 
  7. ^ "Steem White Paper" (PDF). Retrieved March 23, 2017. 
  8. ^ "DTube: Steemit User Builds Foundations of a Decentralized YouTube". BTC Manager. August 23, 2017. 
  9. ^ "How Blockchain-Based Cryptocurrency Can Make Online Publishing More Profitable". Nasdaq. December 27, 2017. 
  10. ^ "Final Review of Steem Economic Changes". Steemit. Retrieved December 8, 2016. 
  11. ^ "SteemData". steemdata.com/stats. 
  12. ^ "Social Media Blockchain Steem Issues $1.3MM Payout To Steemit Users". THE DASH TIMES. July 5, 2016. Retrieved August 10, 2016. 
  13. ^ a b "The Social Network Doling Out Millions in Ephemeral Money". WIRED. October 4, 2017. 
  14. ^ "Steem". coinmarketcap.com. 
  15. ^ "Weekly Steem Stats Report". steemit.com. November 13, 2017. 
  16. ^ "Weekly Steem Stats Report - February 12 - 45,899 new accounts! — Steemit". steemit.com. 
  17. ^ "Weekly Steem Stats Report". steemit.com. March 12, 2018. 
  18. ^ "New Social Media Platform Steemit Experiences Growth Since Launch". Coindesk. June 9, 2016. 
  19. ^ "Steemit cypto-currency sees huge boost in market cap". The New York Business Journal. July 13, 2016. 
  20. ^ Strauss, Neil. "Can This Social Media Site Make You Rich?". Rolling Stone. Retrieved December 8, 2016. 
  21. ^ a b "New Digital Currency Steem Provokes Doubt of Market Observers - CoinDesk". CoinDesk. July 23, 2016. Retrieved November 28, 2017. 
  22. ^ "The Ugly Truth Behind Steemit – Decentralize Today". August 19, 2016. 

External links