Why Steem price went up yesterday

You may have noticed that Steem price took a high jump in the last few days. The price went from 33 cents to 39 cents in the last 48 hours. That’s a price hike of over 17%. The price hike came after Steem Inc announced that they have made progress in developing Hivemind. They stated in an official blog:

Hello Steemians, we are excited to announce that Steemit’s APIs are now powered by Hivemind! By routing most of the social APIs to Hivemind, we are able to dramatically shrink the size of the full nodes we run. Because there are so many social applications sharing information on Steem, full nodes had become extremely large and expensive to run especially because they are not optimized for use cases that are not consensus-critical.

This new update is expected to reduce the size of Steem full nodes. Before the update, it was extremely hard to run those nodes. They required an insanely high amount of RAM (if I am not wrong, it was over 250 GB). The high costs made many investors concerned about the sustainability of Steem blockchain.

Now that this concern is no longer an issue, more and more investors are entering Steem again. Compared to other cryptocurrencies, Steem price has taken a huge hit in the bear market. Steem went from 6 dollars in Q1 2018 to 22 cents in January 2019.

The reason behind this is the uncertainty around whether Steem will even be able to exist in the near future. Steem’s full node performance issues made many people think that Steem might never be able to scale to the level of a social networking site like reddit or twitter.

The recent hivemind update reassured the community that Steem is able to scale better and increase efficiency. It can now support a lot more content than before. This is the main reason why Steem price is going up. Steemit.com recently added advertisements to increase their revenue. That may also have influenced the price rise.