This is a great innovation, but this:
We ruled out Bitcoin. It was too slow, too expensive, and bore all the hallmarks of a prototype that had not been improved upon as much as its successors. We also looked at Dash and other cryptocurrencies. We even considered doing an Ethereum-based ICO – way too expensive.
is what worries me. There's no reason to think that Steem is the end of history. What happens when bigger and better things come along?
No doubt they will. But we have a base currency that is nearly instant and free to use, plus we have a large and growing community that supports it with this incredible use case called Steemit (plus other Steem-powered sites and apps, more of them coming every day). Bitcoin does not have 1/10th of this utility and yet it's been on top all this time. With Steem being the first truly efficient and useful crypto with a growing economy of scale, it will be hard to supplant for a while, unless something is radically better. How do you undercut something that is instant and free?
The only thing I can think of is scalability. Will the steem blockchain be able to process 100x, 1000x, 1000000x ? transactions per second compared to currently? In fact thinking about this, I'm guessing that it's probably possible for the blockchain to be suped up if required in the future? If that's the case, then you are probably right about the instant and free transactions and, as you hint, gaining first mover advantage could be a huge factor.
Supposedly, they have capacity for the kind of growth that is expected, and those are big expectations. There are ways for them to offload or classify some of the content so it doesn't clog things up.