I read through the whitepaper yesterday and am really impressed with the design and execution of STEEM. Subjective proof-of-work is a genius way of distributing coin. They've got the supply side covered.
Many altcoins have a unique demand-side proposition. For example Siacoin let's you buy distributed cloud storage. Maidsafe has the promise of purchased distributed webhosting. Litecoin gives you quicker confirmation times. DASH has increased anonymity.
Maybe this question is answered in the whitepaper and I missed it, but what is driving the demand side of STEEM? Where do I spend STEEM? What can I buy or do with STEEM that I can't buy with any other crypto?
Demand for Steem Power will likely be the driving force. There's two main reasons to hold Steem Power:
Financial return on investment. As long as the system is growing overall, you can expect a return, maybe an outstanding return.
Stakeholder voting. By holding Steem Power, you get voting rights within the overall Steem ecosystem. You get a say proportional to your stake in who gets rewarded and why. On SteemIt.com, you get to decide who/what rises to the top and who falls to the bottom. This is valuable potentially for any user, but perhaps marketers especially in the long run. Steem Power is also required to transact on the network at all.
In my view the long term viability will depend on whether the perks of owning Steem Power are enough for people to hold it even when the system overall has reached an equilibrium. If it is dependent on never ending fi1nancial growth, then it must fail at some point, it's just a matter of how large it gets before it can't keep growing any more.
People like power.... brilliant move to give people the ability to do that. It is Pay To Win!!! However, when a Whale votes on one of your posts YOU will know it and will win too!
But why would anyone else want to buy your Steem? I still don't understand how it has any value unless someone else is willing to pay for it, and don't say "investment opportunity" because that sounds like one big ass Ponzi scheme to me.
But, perhaps you are right, and businesses will want to tip the scales in their favor by scooping up as much Steem Power as possible so their content stays at the top. If that becomes reality, and businesses end up purchasing a lot of Steem Power, then don't you think the Steem community will just become one big billboard? Users will leave. I don't see the benefit in having a community where everyone's voting power isn't equal. In fact, that sounds a hell of a lot like a Aristocracy, doesn't it? Humanity tried that before, it didn't work.
Steem can be used to create/buy Steem Dollars or Steem Power. Steem Dollars have transactional utility, they are a stable currency pegged to the USD which pay interest. Steem and Steem Power are really just bootstrapping the end product, which is the useful Steem Dollar as well as the networking site etc.
Pretty new to this and haven't really read the whole whitepaper but I assume that over time if things get too commercial, the community behavious will have users downvoting stuff that's not what they want to see? Might be a motivation for business to really consider if their posts are adding value or if it's just 'an ad'
And the UI will probably evolve as the number of people/posts scale up. I'm already hoping this happens soon.
Excellent post! By providing yield via Steem Power the devs have created an asset that will experience enormous investor demand, at least in the near term. There are many, many crypto-wealthy out there looking for yield without insane volatility. Steem Power has the potential to tap a pool of crypto-wealth currently worth billions.
Perfect
Here you go,
https://steemit.com/steem/@dan/steemit-s-evil-plan-for-cryptocurrency-world-domination
One's influence on the social network is determined by one's Steem Power. More Steem Power means more influence--meaning your up or down vote counts more than someone with less Steem Power. Also, the amount of one's Steem Power factors into how much curation award one receives.
So, since people want to be socially influential and they also want meaningful curation awards, they want Steem and are willing to pay for it. Hence value.