New Steemians are coming everyday, and they may ask what happens on this site, in system or community. How can they earn, why is the Steem price declining and so on. Let me try to explain. Don’t misunderstand me, I don’t intend to critic or attack, only to give a useful description of the situation. A summary of what I learned and read in last weeks, and may be useful for newcomers.
1. The ugly fat bear
Of course, here is a huge crypto-bear-market this year, and most altcoins are declining much more than Bitcoin. People are less crypto-hungry and aren’t seeking Steem so much as earlier this year. May be, this is the strongest issue.
Lower cryprocurrency prices ––> less interest for buying any crypto ––> lower Steem price.
2. Dreams and reality
“Authors get paid when people like you upvote their post. If you enjoyed what you read here, create your account today and start earning FREE STEEM!” – this frase is which you see below all posts if you visit Steemit.com without logging in. But the reality is much more complicated:
- People get paid when they upvote themselves.
- People get paid when they have friends, or a community who upvotes them.
- People get paid when they use robots and succeed to earn a positive ROI (return on investment=yield).
- And yes, some people also get paid when they write something extraordinary interesting, but this case seems to be rare.
Most users come here and don’t see any real money (not even a cent at the beginning). Than, they go away again disappointed in some days or weeks, may be the 85-95 percent of them.
Steem price surges with additional demand, mostly from outside, from new users buying Steem. Quitting users don’t buy Steem, so the price stays relatively low. (There is a huge difference between the original principles and the reality, I don’t know why. You can adapt and stay or you can flee.)
Many disappointed people ––> less buying interest ––> lower price.
3. Where comes the money from?
In this system, users have more voting power, and with it, mostly also more income (curating or selling votes), if they have more Steem. You can get more Steem (Power) with people’s upvotes (work in), or buying more Steem (buy in). But buying Steem is extremely dangerous considering the historical price charts.
To have significant voting power, let’s say, more than 10 USD a day, requires a relatively high capital (18-22 thousand USD approximately), which many people can’t, or doesn’t want afford. (I wrote about this earlier, with a bad title.)
There are two ways people can get involved with a crypto-currency community: they can buy in, or they can work in. Steemit white paper
To be important here requires risky investment ––> average people don’t like so much risk ––> less demand for Steem.
4. The Inflation
The inflation in the Steem system is slowly decreasing, but still high, this year by about 8-9 percent per annum. This is much more than in most countries of the world. If demand stays the same and supply grows, prices must fall, always, in every market. Steem needs more demand growth than supply growth to see higher prices.
Developers are working on it, for example programming the Smart Media Tokens, and dozens of new applications on Steem blockchain. But that requires some time to take effect. (More about inflation here and here.)
More inflation ––> more supply ––> lower price by stable demand.
5. Readers and curation
As mentioned in part 2, not only the best content gets payed, and one consequence of this is, unfortunately, that we must struggle for the good content. (“Trending” or “Hot” lists are not always the best.) Reading Steemit regularly also needs work and attention: clever selection of the followed people, searching for interesting tags (topics), searching for curation digests. (Many readers may come from Google searches.)
Difficult to read ––> less readers, less readers ––> less users, less users ––> less Steem buyers, less buyers ––> lower price.
Bottomline
I think the best way to have success here is, invest and work at the same time. (Invest only what you can afford to loose.) And have a lot of patience, some day will the next crypto-hype show up and Steem can turn around.
Despite the problems, I feel good here and I want to stay, but may be I’m a little different than others. I’m willing to take very high risks by investments, and also a graphomaniac who would write a blog even if nobody pays for it. But the typical user may be less enthusiast.
Disclaimer:
I am not a financial advisor and this content in this article is not a financial or investment advice. It is for informative purposes only, or simply to make you think, entertain, increase testosterone and adrenaline level. Consult your advisers before making any decision.
Info:
You can message me in Discord.
(Photo: Pixabay.com)
You also have to put add:
Delayed progress
Ned selling
Wacky DPOS system
All of these are a major factor as well.
IMHO, from all the listed reasons, the #1 is by far the most significant.
Yes but the bear market will be over in september!
amazing
At some points, you are right, but you should not see it all that critically. Steemit is still new and will be consistent improved :)
I mentioned the developments. When do you think first Smart Media Token applications will be in working stage?
Well, right now, a lot is happening in the development and I always try to be up to date. SMT seems very promising and they announced a release date of January 15th, 2019. But I do not think we can expect useful applications before mid/end-2019.
I think there is a very huge competition, many crypro-developers are desiring to repeat the great success of the ERC20 tokens, the ICO-boom, so Smárt Media Tokens on Steem have to be very special to have success…
Commenting is a very viable way for some Steemians to get good earnings. The mistake most newbies make is to believe you need to be a good writer/content producer to make good bucks, but that is not the only way.
Great article. You hit a lot of the main points. I think flagging and downvoting still has a long way to go to empower folks in the right way while still avoiding abuse to people.
I'm in it for the ling run now. I was one of the people who came, left, and luckily came back. I might have so much motmre SP if I had just remained active but I was disillusioned for a while before coming back.
Steem is the best blockchain ever! I've never experienced an online community where my desire to create has been so uninhibited. I'm free to create content as I wish and others are free to read it. The beauty is in the simplicity and uncensored nature of this system that affords us a place to be free and explore.
Yes, you are right. But if you aren't acting in politics or other area of heavy conflicts, Wordpress or other blog systems aren't censored either. And Steemit posts also can be downvoted to be invisible for most readers.
Chinese are ultimately posting short political documents on Ethereum blockchain.
Very good points, but I think there are at least five reasons why Steem will rise and why it is such an interesting and multi-platform project including DTube and Utopian for example.
Really like your realistic and down to earth view on this, @deathcross . I myself am a leaver and go-er of Steemit, regular breaks. But the concept of this community is just too cool to let pass away. Regardless of the ROI, I much favor the system/concept over the likes of FB.
Ok. Very good... Good point... Bravo!!
Now I will tell you two points why Sttemit is better than Facebook and other shitty social media like youtube instagram etc
First, Steemit doesnt collect our private data and instead Facebook and other craps like google youtube instagram collect our data and they decide what we have to choose
Second, even if I only earn one dollar per year by posting on steemit, it is far better than posting in facebook ... facebook pays nothing for any post or upvoting
So Sttemit is th best choice.. Keep posting on steemit and leave Facebook !!!
I'm not sharing things on Facebook with my friends and family to earn money, it has another purpose. I wouldn't mix earning money with my social relations, friendships.
If any better system emerges I 'll change to it gladly, but only if my family also does. For many people Facebook is very useful, and it will be difficult to move them away. Not impossible, anyway, do you remember ICQ or MySpace?
People be using joined group to increase their upvote..playing unfair to make wealth fast..appreciation of blog post is rare truly
Syper
Thynks
Hahahaha
Dear author, I really like your content! You’re writing in a very interesting manner!
I think my last post will also be interesting for you
https://steemit.com/ubex/@cryptofrau/ubex-artificial-intelligence-in-advertising
Please, upvote it! I’ve upvoted yours in advance.
Awesome post! Really interesting for me as I'm a noob and not aware of all the things that are effecting steem price. Thank you for writing this piece 😊
No, this post isn't special, I have read a lot of similar posts as mine in the last 3 months.
The problem with older posts is, you can find them mostly only with Google. And it's difficult to know if the conditions have changed (if there is a new fork on Steem blockchain). So, some informations better to be repeated every some while. Agree?
I am a new in Steemit so it's the first I see this kind of post.
Ok I understand. And I am agree with you because you explain me how it works :)
I can see that you using redfish. Do you think it is good? I was thinking of buy some coins and join.
I think the category "redfish" is official.
https://steemit.com/redfish/@albertvhons/steemit-introduce-the-new-level-redfish
But the most are dead fish:
https://steemit.com/statistics/@arcange/steemit-statistics-20180818-en