STEEMZINE #22 - STEEM Where Is The Floor? The Fate of Steemit Is On The Line
Any consistent Steemer has been watching the price of Steem steadily decline. But, the big question is where is the floor? Where does the price actually end up and what is the base price where Steem will actually settle.
Here is a look at the 1 month chart of the price of Steem/BTC
The Concern
The concern with the current trend is we are not seeing any rallies - any temporary boost in price has been very short lived and the downward trend is continuing and consistent. Now, this is could be for a number of reasons.
- There is not enough interest to Buy Steem. The benefits of purchasing Steem aside from speculation are not great enough for someone to spend BTC, where there is more short term growth in other coins.
- The consistent decline would also demonstrate - consistent selling of Steem. When people earn for their posts, even if half is tied up. The other half is cashed out and sold for BTC.
- The combination of the two lead to a steady decline in price, there are simply more people selling than buying. It's basic stuff.
This is where the problem lies.
Now the issue with this, if the price of Steem falls. The reward benefit for contributing to the platform diminishes. Resulting in less people likely to continue writing content and seeing how it is actually beneficial for them to contribution.
Past The Hook
How many of your introduction posts got a great reward? A large number. This is the hook. It captures peoples imagination of what is possible and gets them contributing. A fair tactic on those who it truely matters to. But, this effect is short lived. When there isn't enough power players to go around and not enough invested in the platform in any serious way, the majority of content goes unrewarded. Which begs the question to alot of authors...Why contribute if I'm not getting paid? After all that is why the large majority would sign up to this platform. It is human nature to want to gain reward for time and effort.
But once that initial hook wears off. Where do we end up?
We end up here.
We end up with a problem where the platform cannot advance quickly enough to keep the majority entertained and give them good reason to continue to contribute to the platform. The inclusive nature and idea of content being rewarded on value to the community goes a miss as well.
For those who are not natural born writers, artists or creatives. The majority are left going "how can I make this work for me?" There are simply not enough avenues for the people to earn Steem beyond writing.
Now I can hear a lot of you saying what's wrong with that we are at Beta.
Sure we are at Beta. But, this is a little different. Because although the concept is new, it is not actually new. We already have social platforms that are working and people are deeply embedded in them. Unless people gain from their efforts consistently, they will put their attention elsewhere on things that do. This again is human nature.
The Problem With Open Source
Now you may think at first glance open source is fantastic, it creates more avenues for this to expand to. But, just because people are creating tools around a platform. Does not mean it's being created in the right direction.
Successful businesses are this is essentially what this needs to become. Need to be carefully guided and thought through. Otherwise you get a lot of something but not a lot of anything in particular.
You can argue with me as much as you want on the this but...I will simply say....this....
The majority resulted in two things this year...
1. BREXIT
2. Donald Trump
This is not just effecting the everyday steemer, this is effecting influencers.
There are a bunch of accounts on Steemit, that have consistently performed. But, if you find some without naming names, go through them and you will notice a steady decline in their rewards for their posting.
This is problematic as well, again a lot of these people are switched on and smart individuals. Thats why they are considered influencers. They have valuable things to share. But again, if they are not being rewarded they will stop contributing to the platform.
Where is the floor?
The floor...well I'm quite unsure. I don't think we have seen it yet. The reason being is because the same behaviour will continue to occur. Those being rewarded will continue to withdraw, there is little incentive to buy into the platform. It is a 2 year speculation on anything that you put into Steempower and if it's not spare cash lying around. That is a long time to gamble with your funds.
The Fate Of Steemit Is Firmly On The Line
Something needs to budge and to change. The actual platform needs to expand and improve quicker than it possibly can. If the price keeps on dropping. We may see it in dire state.... where we may indeed see a slow exodus of people from the platform.
I hope it doesn't happen. This place is fun!
STEEMZINE
@steemzine, great post. Been pondering this of late. The bottom line is we have a small pool of people actually buying steem with $$$ compared to the giant pool of contributors that are cashing out in order to be "paid" for their work.
The supply/demand is so far out of whack a catalyst needs to come along to swing the pendulum.
Not sure what that can be. Maybe steemit needs ads on the sidebars to generate revenue into steem.
Either way, the daily chart of steem/btc is in a pattern of perpetual bear flags and next target looks like .001
@scaredycatguide spot on. I think you are right with your target prediction.
Alternative ways to earn steem would also be ideal. There are so many ways this could work. But, still if people aren't buying and only selling. There is an issue.
So what exactly is it going to take to make people to want to buy Steem....I think thats the question that needs to be answered, where is the value in buying?
Well said. I agree. This needs post attention.
I am holding out hope that the dev team is planning some major new thing that will breath life back into the currency, but right now I don't see what catalyst exists on the horizon that is all of a sudden going to cause the price to keep going up.
There is also the hope that we can ride the downward trend long enough and still stay alive to where the user base reaches a critical mass and it explodes. I think the retention issues you mentioned are key though, and what has me worried about things playing out this way.
spot on @timcliff - one thing is getting people interested, another is keeping them on the platform long enough to grow something that is sustainable.
But yes, what will propel the price up....I'm not sure. Some mass partnership announcement maybe, but that is like any cryptocurrency which bounces up on any news even if it's not even that impacting. It's fickle.
This platform is slightly different...as where to nexT?
The retention issue may become a big problem. There are already alot of newer users getting discouraged after a few weeks of contributing and seeing their posts earn pennies. Hell, my posts earn pennies and I'm an experienced writer. Though I'm here as much for the social experiment as anything else, even I've gotten annoyed by it.
For now there is enough influx of new users that it won't be an issue, but that's not the answer. Then it would just be a user ponzi scheme.....new replacing old on a constant circle to keep it afloat.
Well that is problematic, of course it has annoyed you. Here is a question Would you be contributing to the platform if you couldn't potentially get paid? Or would you do something else? Would you use other outlets to write? @scaredycatguide
This is what they have to deal with.
Exactly! I love to write and create content. But would I do it here if there was no potential to earn. Yes and No. I would still post here, but it would only be content directly from a blog to help build my following.
I likely would not create all the additional original content I post here exclusively.
I have a feeling that opinion may be widespread throughout the user base. It certainly is a dilemma steemit will have to face at some point.
Either way I still plan to buy some steem power, but am looking to get it as cheap as possible before the next spike....cus there always is a random spike on any blip of positive news. :-)
Great post steemzine ,I'm not trying to push my post but I do have some data you may find interesting
https://steemit.com/steemit/@me-tarzan/steem-time-to-buy-steem-daily-data-and-power-up-8-23-2016
Solid post @me-tarzan and yes very helpful!
There needs to be more of a reason for wanting to own STEEM and SBD. Right now for most contributors the desire for STEEM is to turn it into another currency that they can use, BTC or BTC --> whatever local currency they use.
Recently, I've seen posts for getting paid in STEEM and SBD for things off the site via a web button thing, I think it also allows you to accept it at a point of sale. It's also very new and hasn't had much time to effect the price of STEEM. I think the more widespread uses like that there are the higher STEEM will go. STEEM itself is also quite new and hasn't really reached the mainstream.
It has all of the advantages of a cryptocurrency, low/no fees etc. Let's get some offsite wallets/wallet support for STEEM and it could start to take off.
@mweich all very interesting points you make! What is the benefit though in paying with Steem?
If you can use STEEM directly, you don't have to sell it first.
It'd cut at least the steps of buying bitcoin, selling that for fiat, then finally buying whatever good or service you wanted in the first place. Other than that, it'd be just like using bitcoin.
This is crypto, prices fluctuate . . . wildly. Steem is the first cryptocurrency that has introduced people from all demographics to bitcoin, they have to deal with it at some point to get their $. Things should level out, I have confidence that the price of Steem is not an issue at this point.
@tinyhomeliving
Completely agree land of crypto is wild. But, not everyone is familiar with the massive swings, huge drops. The difference between this is people contribute are rewarded with crypto, if the coin reaches a point where people go this isn't worth contributing particularly amongst the influencers...this is potentially problematic. I'm hopeful as it is early days!
I definitely am staying optimistic and hoping this will change. It has impacted everyone. It is concerning. We may need to determine ways those of us on steemit can help.
I've read that it is beneficial to the overall platform and price of steem to use the week long transfer of steem dollars to steem rather than simply converting quickly on the internal market or external ones such as bittrex, poloniex.
@dwinblood it is a tricky one to navigate. As there is a sense that people just want to gain and run. Which is natural. I get it but overall there will be no platform if people continue it...or if there is not great reason to keep Steem
@dwinblood @steemzine The idea behind Steem is solid, but I think the execution right now is failing because the understanding of (a) what people want from a content-site (as producers and consumers) and (b) how social networks grow mathematically, is having nowhere near as much thought put into it as the intricacies of the crypto-currency and minor adjustments to the reward system.
On a business-level, the idea of giving away large chunks of the reward pool to bitcoin celebs with overlapping fanbases is just bizaare to me.
You can look at where it was not too long before that peak in graph. It's new, it shot up high, it's settling back down. People don't need to be getting paid for an #introduceyourself crazy high to stick around. If they do every other site will fail also and facebook wins.
Let's hope not lol
@clevecross no doubt! It is finding it's place. But, its still problematic in the sense that if it does keep on falling...if people keep selling...it will do that. Then it will settle at a price where contributing content may end up being more trouble than it's worth. Now you can draw comparisons to othersites like facebook/reddit etc people contribute and don't get paid. But, they were never sold on the concept of contribute content and get paid for it. This is basis of why people sign up to contribute here. If you are at a cafe and you order cheese cake and get a piece of cheese, are you happy? Probably not. You wanted the cheese cake. :) Next time you may just find yourself going elsewhere. It's up for debate forsure!
Is there too much great content which is killing the motivation of the new users? The current post that shows up on the trending page is most likely creating a
silo of big wallet usersand asilo of $0.01 users. They are not going to mix unless something changes. We are also seeing the minnows leave because what is the point of posting if you are going to be stuck in the $0.01 silo.Most social sites become popular because of the silly, benign, and also controversial posts on their site or apps. Steemit needs more of this. Which, will cause households to begin talking about Steemit which creates more lasting users. Steemit will then become a household name and as popular as Facebook.
Bitcoin isn't a household name yet. Steemit should take advantage of that fact and take the crown or someone else will.
You make some good points @socalguy you are spot on the user experience is not enough where it stands. Although I believe in a minimum viable product. This is a tricky area to attempt it. Because it is well and truely behind competitors that have been in this space for a very long time.
If the funds aren't coming in for authors and the minnows so to speak are leaving. You aren't left with much.
I raised the point above. Would have the people here be contributing to the platform if there wasn't some kind of hope in making rewards....probably not. Once this hope dies down and these people aren't reward. They will drop off.
The drop off rate will outweigh the influx of users. Because, the reality is ....everyone who drops off will tell people "oh yeah don't waste your time with it - you can't make any money" thats the effect that will soon begin to happen. If something doesn't change or if it's not advanced more quickly to be competitive and to be more inclusive of the general poster
I personally am not too worried about the price. In my experience a new coin will go through a long and steady price decline before the market settles down somewhere and then starts going back up if the fundamentals are sound. That's why I never buy an ICO. I know I can get it at a better price once it's been on the market for a while.
@wiser potentially but the success of this relies on people using it. thats the purpose of the product. Alot of other coins are slightly different in that respect. Valid not buying ICO - easily burned.
I think the fact that there's an actual product makes the fundamentals good. Sure, there will be people who try Steemit and give up, but I suspect that has more to do with spending too much time on the trending page. A lot of people are going to keep posting here and do well because it's not just about the money for them. Those are the ones you want to keep anyway.
wow. It is falling more and more like them.
Great gif! @maykor15