RE: Steemit.com is running at a loss! Start generating revenue or get out, you are strangling other applications from succeeding.

[socky]

Option #4

Steemit Inc Must Build an Exchange

Steemit Inc has the ability to create massive source of revenue for themselves and for the reward pool.
All they need to do is create an exchange just like any other major exchange.

Steem Market

We have a Steem Market, but that is only good for small volume trades between Steem and SBD. Have you ever looked at the large transactions? They never use the Steem Market. They can't use the market. They also can't trade against other currencies. They are forced to take the large sums of STEEM and SBD offsite to a real exchange. Those exchanges are taking fees that profits the exchange. Steemit Inc doesn't benefit from these large trading volumes.

BlockTrades

This is not a solution either due to high fees. BlockTrades is an Over The Counter (OTC) exchange. It will never compete with a real exchange and no one uses it for very large transactions.
Both of these trading options have their place, but there is a massive vacuum where a Steem Exchange should be.

The Fix

I propose that the Steemit Inc build and operate an exchange. The Steem Market can remain just like it is to cover small volume trades between STEEM and SBD. BlockTrades can remain just like it is to handle simple OTC transactions. The Steem Exchange would work on a virtual currency system just like other exchanges use. One can transfer STEEM or SBD to the new exchange before trading takes place. That will fix the transaction speed issue from drowning the Steem Market and provide another option. The exchange will also need to include other currencies. This would fix the volume issue and add revenue. Let's also give multilingual options. Open this up to the rest of the world. German, Russian, Spanish, French, Chinese, Japanese just to list a few.

If Steemit Inc would make an Exchange division to run this exchange and charge a tiny fee on trades just like any other exchange, then they can generate revenue. Exchanges are highly profitable by doing this. Trades between STEEM and SBD can remain free as there is no cost to transfer STEEM and SBD. STEEM will also be a primary trading pair which will boost STEEM as a popular world currency. By adding other currencies and charging trading fees, they create a source of new revenue coming into Steemit Inc to fund Steem projects and upgrades. This revenue could cover Steemit Inc costs and could overflow into the STEEM reward pool. This would benefit everyone and could kick STEEM into high gear.

An exchange will bring in new users to this platform. Other major exchanges have around 10 million users. Binance has exceeded this in less than a year. STEEM is over 2 years old and barely broken 1 million users. If Steemit Inc runs an exchange, this will create an avenue for Steem Exchange account users to become STEEM account owners. The amount of visibility to this platform would be enormous. Value would be added to Steem platform as the value is expected to follow Metcalfe's Law. This is an exponential value prediction that Facebook closely resembled in which value is expected to increase by 4 times for every time the number of active users doubles. Steem is expected to follow Metcalfe's Law.

In conclusion:

1. Steemit Inc can profit massively from running an exchange. This would support operations even when the price of STEEM is down.
2. Steemit Inc can make STEEM a common trading pair with everything else. This doesn't exist and would make STEEM a powerful currency like Bitcoin and Ethereum.
3. Excess revenue can fund our reward pool, witness reward pool, or both. This would support all Steem users and foster growth.
4. A Steem Exchange will bring in huge numbers of new Steem users. Easily 10X users that we have currently. This would provide STEEM dominance with all the other competition emerging and grow value.
5. This will not require the use of ads to spoil the STEEM experience.