While I agree with you that Steem is definitely MASSIVELY undervalued as a currency compared to the unbelievably less-efficient BTC, ETH, and LTC, I feel like you're selling Steemit short. The problems we face now with the way Steemit works pale in comparison to the potential that this nexus of blockchain technology, digital finance and social media has.
The cultural dominance of Facebook, Twitter and Google (through YouTube) over the past decade-and-a-bit has proven the power and significance of social media. In parallel, the explosion of the fintech industry has demonstrated the importance of virtual money in theory and practice.
"Bitcoin" and the first generation of cryptocurrencies it's often used to refer to in the media is, in my view, valuable the way an antique vase or car is valuable. You'd never actually use it for fear of depreciating its value, a value based entirely on what it represents and how much others are willing to pay for it. Pure speculation.
The Steem blockchain has a working application (yes, Steemit) used by tens of thousands of people around the world and generates enough money to actually be some of its users' main incomes. Yes, this is because Steem itself is an incredibly well designed currency, but so are Ripple and Stellar Lumens and many others. Steem has value because it's being used IN PRACTICE in a SOCIAL MEDIA PLATFORM. The two biggest innovations of the 21st century so far, together in a package and (as of yet) mostly undiscovered by the masses.
Don't sell Steemit short. Even if this site doesn't end up being the final iteration of blockchain social, even if it does become the GeoCities or MySpace to some future blockchain social platform's Facebook/Twitter, Steemit is the proof-of-concept and a vision of the internet's future.
This is a common challenge for many. If someone says "X is better than Y" it does not mean Y is crap or not valuable. I tried to make clear in my post how valuable Steemit is and how most of already understand this. I've spent a year and a half writing articles about this.
What I think we are doing is undervaluing STEEM by only talking about the value of Steemit. Your Ripple/Stellar examples don't work as well for me because they are centralized and don't have built-in, decentralized governance like DPOS controlled by the community. The key point here is the investors in the STEEM token generate that income you're talking about, not some intrinsic "value" of the content itself. There are no ads here. There is no income. It's just like bitcoin in terms of "pure speculation" only we have a much better story to tell ourselves because of things like Steemit, DTube, Utopian, etc. The utility value we can see informs our speculations about future value. Utility value is important, but I still think it's just part of a story we tell ourselves.
I'm definitely not selling Steemit short by comparing it to STEEM. What I'm hopefully doing is realigning our understanding of value by correctly understanding how valuable STEEM is, given our understanding of the value of Steemit.
I haven't read much of your other stuff, only stumbling across this article today. You're not wrong that X>Y does not mean Y=0. However when you said:
"Steemit, the social media site and how it interacts with newly minted STEEM distribution, is almost a distraction from the value of STEEM, the cryptocurrency. "
I definitely read that as a dismissal of Steemit. Moreover, being that Steemit is the flagship app of STEEM, it's hard not to tie the value of one to the other.
In your article on utility, you said:
"When [the hype around a cryptocurrency project dies away, and we're left to evaluate its actual utility at accomplishing stated goals], speculators turn into investors. They turn off the wishful thinking and start making more rational comparisons to other players in the space both inside and, importantly, outside the cryptocurrency scene. "
So is the value of STEEM right now a function of its utility, as you implied there, or pure speculation with a slightly better story? Isn't the fact that a currency used mainly to assign monetary value to internet content has any value at all an assertion of its utility?
I suppose my main disagreement with you it that STEEM is objectively more valuable than Steemit. The two are, at least right now, inseparable. And when the inadequacy of BTC, LTC, ETH leaves them in the dust, STEEM will probably experience a new speculative bubble based on both the superiority of its blockchain and the success of Steemit.
I think what this article is trying to articulate is how the stated goals of STEEM (and Steemit, the company, if you go by Ned Scott's statements at Steemfest) isn't about the social media site, Steemit. Most (myself included) didn't get this right away. They think, "Of course the Steemit social media site is the main product!" The reality, I now think, is closer to this being a reference implementation for what's possible on the STEEM blockchain and just one part of the vision to tokenize the web. The focus of Ned (from what I understand) and his company is to build out Smart Media Tokens to accomplish that tokenization. STEEM is the blockchain that will do that and it will be done without Steemit (the website) even having an interface to deal with SMTs directly to begin with (from what I understand).
So I'm still doing the same comparison. I'm comparing STEEM, the cryptocurrency, with other cryptocurrencies. I don't necessarily have to compare it with options outside the cryptocurrency space because that would be redundant (they all share those same benefits, for the most part, against fiat currencies).
The fact that the STEEM cryptocurrency has utility outside of just being a cryptocurrency which includes supporting social media activities (user account creation, content creation, voting, etc) is a bonus.
Today, STEEM is used (and thought of) by many as a social media blockchain. If they just thought about it as a cryptocurrency alone, they might value it much higher than they do now, based purely on it's technical capabilities as a cryptocurrency.
OH okay gotcha. I think it would have been more clear if you’d emphasised the “tokenising the web” part from the outset. I definitely agree with you that that aspect of the STEEM technology is going to be immensely valuable. In that context, yes Steemit can be seen more as a proof of concept than THE Steem product.