In July of this year I found out about Steemit. I went from knowing nothing about it to making $15,000 in one day (now worth about $1,500!) to becoming a big believer in the potential of the platform.
Up to now I have only been an evangelist for the platform and currency in terms of its ability to make people money for contributing to the platform in the form of writing. And, numerous people I know, who I introduced to the site, have made thousands of dollars by posting on Steemit. These include @larkenrose (#3 in followers), @lukewearechange (#10), @dragonanarchist (#20), @falkvinge (#27) and literally hundreds more.
What I have yet to be, until today, is a promoter of actually purchasing Steem, the cryptocurrency, as a speculative investment.
When I first got into Steemit, Steem was trading at over $2 per coin/share and had a market capitalization of nearly $400 million. For something so new I was shocked at the high valuation. I've been an entrepreneur and investor in internet technologies since 1993, though, so seeing ludicrous valuations is more the norm than the exception, so I sat back and watched to see if it could sustain at that level.
It didn't!
As of today Steem is currently trading at near $0.30 with a total market cap of $54 million.
I have been powering up nearly all of the Steem dollars I've earned since July as I said it was an investment in the platform, as well as to show my commitment to it. If I hadn't, and just held the Steem dollars, I would have over $200,000 today. Instead I have Steem Power worth about $30,000.
That's a loss, on paper, of $170,000! But, as I said, I've been an investor in new web technologies for decades... that is completely normal... you usually either win big or lose big when speculating in new ventures.
However, here's the thing. I still think Steem can be absolutely massive. So much so that I still continue to power up nearly all Steem I earn on the site.
And, with a market capitalization, now, of a much more reasonable $55 million, I think the time may be close to actually look at purchasing Steem Power as a very viable speculative investment.
Here's my reasoning.
THE CASE FOR STEEM
Steemit.com, itself, is still in beta and, even by internet standards, still in its infancy. And, its growth has been very fast to date (and I expect that will only speed up). Thousands of developers and entrepreneurs are already building new technologies and applications on top of the platform... mainly because the platform is designed in such a way to incentivize people to do so. Very few other platforms pay people to develop for it in such an ingenious way.
Plus, Steemit hasn't even come close to hitting the mainstream yet. Hardly anyone in the mainstream even knows what bitcoin is yet, but they will... and the same can be said for Steem in the next few years.
And, once the mainstream catches on that there is something that is better than Reddit, Facebook or Twitter and they can earn money just by being on it, I think we could see a massive adoption unlike anything we've seen in recent history.
Once that happens then venture capital investors may be wondering how they can profit. After all, if the buzz 6-12 months from now, is that Steem is a FB/Twitter killer and has tens of millions of users and is rising fast, everyone will be looking for how they can get a piece of the action.
The only way, of course, is to purchase Steem. And, the only way to ensure your Steem investment maintains its value is to power it up to Steem Power (with a total hold period of 2 years).
If Steemit begins to get that kind of buzz, venture investors will look at the Steem market cap, and if it is still in the range of $50 million or less, we could see a buying flurry.
After all, Facebook currently has a market cap of nearly $400 billion. So, if people start hearing that Steemit can be a FB killer, they'll look at its market cap and realize Steem is currently at 0.013% of the value of Facebook and easily take a punt on it (aka a speculative bet).
If this were to happen, and it is completely within the realm of possibility, a Steem market cap of $1 billion, a year from now, is not at all out of the question. And, if things go really crazy (which paradigm shifting technologies usually do), who knows, $10 billion or more.
By that point, Steem would have tens of thousands of developers working on it, coming out with new services and applications on a regular basis.
The site would be attracting tens, if not hundreds of millions of users, and that would attract advertisers (who would use the promote function to target their audience) and only further the buzz.
RISE OF THE BLOCKCHAIN
In the last few years, billions of dollars have been invested into blockchain related companies by venture capital investors. In other words, blockchain is no longer that "obscure" thing that hardly anyone but cryptogeeks and anarcho-capitalists know anything about.
And, because of that, something like Steem is not completely alien to a growing base of investors. It's all very reminiscent to me of the internet around 1996... hardly anyone really knew what it was... but a growing group of savvy speculators and investors were betting big.
Then, a few years later, the public found out about internet stocks and they went vertical.
Aside from bitcoin, ethereum, maidsafe and a few others, what other cryptos have the potential to capture the imagination of a large swathe of people? In fact, which crypto has the potential to become an even bigger name than any of them in the public's mind? Only Steem, in my opinion... because everyone can and could be using Steem related platforms as part of their daily life in the very near future.
For this reason, for speculative investors, I now think it is time to start looking at Steem as a speculative investment. Of course, that comes with all of the caveats of speculative investments... in other words, it could go to $0. It could also go to $10 billion or higher.
And, for current Steem users, who are earning Steem from their posts on Steemit, if you have no immediate use for the money and wish to contribute to the platform to see it grow, I suggest, at the very least, consider taking 50% of your Steem payout in Steem and the other 50% in Steem dollars and powering up the Steem.
It could turn out to be the investment of the decade... or it could turn out to be a total loss. But, you will be a part of trying to create something special in the process.
I promoted bitcoin at $3 in 2011 (currently over $600) and ethereum around $0.80 in January (currently over $11)... and I am going on record today saying that Steem is a buy at these levels ($0.30).
It could still go lower, and could go to zero, but I think the risk/reward for speculative investors is now tilted heavily towards reward.
STEEMFEST
If you are an investor and seriously interested in seeing what is happening in this ecosystem, then coming to Steemfest (click here for more) in November in Amsterdam is a must attend event. I'll be there and one of the top speakers but I'll mostly be going to get a real feel for what type of community of developers and contributors is developing.
<<Please vote for our Steem witness (click here) at tdv.witness, where we are already developing new technologies for the Steem platform including Steem Trail and a soon-to-come Wordpress Plug-in that could see Steem content easily integrated on every major website in the world>>
Good way to put it.
The masses are almost always wrong about this kind of issues
That is so true
Actually, by definition (in the current market system) the masses are always wrong.
When everyone runs to one side of the boat, the other side rises.
When you are part of the herd, you are the ones who will get eaten.
At least until we rebuild the (stock, bond) market into something other than a zero sum game.
After the price spiked up to $4, I knew it was going to fall a lot. I just didn't see it continuing to fall for so long. I thought after Jeff and a few other names got on the site, that would start pushing the price up a bit, but no, not really. Still, the market cap is about 3x what it was before the spike, even though the price is about the same.
The fact that there are so many developers popping up to make third party apps and sites is definitely a bullish sign. I'm not even sure if Bitcoin had so many developers working on things when it was at this stage. With Synereo and Yours and the rest so far away from coming up with a product, Steemit is really the only game in town, which is probably going to be a huge advantage going forward.
One thing which would make me hesitant to open my wallet, is the high inflation is Steem, though obviously that's curbed when you're investing in Steem Power. It's said that Bitcoin needs $1 MM of investment every day to maintain its current levels. Right now with Steem, with 100% inflation per year, Steem requires (100% / 365 x 171,333,361 x $0.29) = $137,000 of investment per day to maintain its price. (If you feel like doublechecking my math, go ahead.) The daily volume of Steem is pretty close to that, so maybe it's reasonable to say that the Steem price can grow from here. Of course, if you're holding Steem Power, there doesn't have to be quite that much investment for our holding to grow in dollar terms. Let's wait and see.
When the Steem dollar peg is functioning, then it's the time to be steem.
I like Steemit. Even with the money taken out of the equation, I like Steemit. The fact that I've made money with it has been a big plus. A lot of things could be better and tweaked, but it's already a lot better than it was in, say, July.
I've looked at investing in STEEM and powering up the same way I look at donations I make to podcasts I like, for instance. It's a service I like that is easy to directly support, so I donate what I can to show my support. Of course, on Steemit, I can make a return on my "donation", which is a big plus.
It could be just me, though.
Not to mention the fact my country - Finland - has become more aggressive towards cruptocurrencies when it comes to taxation, unfortunately, so I'm not looking to cash out any cryptocurrencies right now anyway, until I figure out what to do.
I'm just greatful I learned about this from watching a random youtube video as early as I did! I'm already worth 2$! :P I feel like it is on the verge of taking over all fakebooks real content makers no doubt once everyone realizes even I can make money over here why wouldn't they switch to a much better more loving platform?! Ah Its a beautiful thing! I'm in love with this app & this steem stuff I still am learning all about and it confuses the hell out of me but I'm sure it'll all make sense sooner than I think. I'm just wondering, What should I be doing with my steem & how best it is used? Ive never even used bitcoin! So all your information is helpful! :3
I'm not sure if it will totally take over facebook, Until Steemit can have the features like facebook. It will still trail it. I think this site is for content creators at the moment, and not for the busy posters of Facebook, who like to document their entire lives, which really what facebook is for, along with the messaging. Currently I use it to converse with my team for game making/Coin2 and keeping in touch with friends and family. I think Steemit has a great future, every update seems to get more interesting. I will continue to stay here for posting my photography,art and game creation. I have had more success here then any other platform so far.
I hate to shit on a party train, but Steemit is SOO far away from even coming close to a Facebook, Twitter etc. I almost wonder how much TDV might have been paid to post this post and promote buying into SP right now(well I guess a guaranteed upvote by all the votes that can payout counts). Because looking at the current state my buy-in is somewhere around .01 -.05.
For starters, the content here people are posting and being pushed to by voting patterns is totally different than what you see on any other platform. You do not see 1-2 thousand posts posted all over Facebook. I do see it being a better alternative to Reddit though, but who knows if or when it could actually overtake it.
Unless the whole interface and options are changed on Steemit it won't even come close to capturing the mass audience Facebook does. Of course, this thing is just a tiny little infant and could grow into something massive, but some major changes will need to happen.
My personal suggestion, because everyone keeps saying but "this is still in beta" I would highly suggest looking at any serious investment as an "investment in beta."
That's true, it's like investing in something before it takes off. Like microsoft,apple, or amazon. Or it could be like investing in blockbuster and circuit city. Then you lose hard. You just never sure in the beginning. Crypto is even more of a mystery and can be more disastrous as a haste.
Any advice would be really welcome as I haven't made a penny
Everything I ever made on steemit went to steem power, I was buying at 2 dollars, for sure I'll be buying on 30 cents. One thing though, right now I must save steem dollars for steemfest ticket so i can't buy atm, but soon. Great blog.
We should have an investment day, where we all buy Steem power on the same day. Steem power only though so it can't be dumped without a two year powerdown. I propose 11/11/2016 the first day of Steemfest
Dogecoin? ;)
To the moon! Such currency.
I still have like a million of them.
That's actually quite to the point. Liquid Steem is no Bitcoin competitor, but more like DOGE. But we have Super DOGE on top! Steem Power! Wow! Such inflation protection! Much Token! :-)
Right there with you, coulda sold out and made over 40,000$ instead I powered up. I understand money and the creation of very well, steemit is the first crypto currency with the potential of mass adoption and giving the power of money creation back to the people. That's why I powered up and took a nice little pay cut. Shoulda been smart sold out and bought more but I wanted to show a long term commitment in a platform I absolutely adore.
Though there may be good information in this post, it's hard to perceive it as an objective piece. The author is already powering down, so he isn't investing in steem at all. But, getting others to invest their money into buying steem will increase the amount he can sell his steem for as he continues to power down.
The price of steem has been consistently dropping since I joined the site a few weeks ago and until a demand for steem is created, I don't see any reason for it to rise again. Facebook's market cap is so high because they make so much money in advertisement and sponserships etc.
I know that steemit has been trying hard to avoid that, but, if they were able to find a way to include advertisements on the site, done in a tasteful way, and also made those advertisement sales purchasable only using steem, then that would certainly increase a demand for steem. Users of the site could also have adverts disabled in return for investing 75% or a little more of any earnings back into steem power, giving incentive to hold onto steem longer and keep the price higher for longer.
I know literally nothing about this type of thing so perhaps I am making no sense, but it seems like a logical solution to the problem we are faced with regarding the falling price of steem.
would be more credible if you wasn't powering down ;)
the problem with Steem is that it has currently little or no use.
with Facebook shares you get shares, a cut of the revenues.
with Steem what exactly do you get? You only get a chance to earn from curation rewards, but that requires huge investments for little return and fierce competition against bots.
originally steem power was also useful to promote posts, but now with all the various tabs in the top bar the "trending" section is not as important as it was. Infact using Seem Dollars is probably more cost effective for promoting posts than steem power.
there's no requirement to buy any Steem to participate in Steemit and profit from it as a blogger, so even if growth continues it is difficult to see where the demand for Steem could come from.
I hope the devs find ways to add value to Steem Power (especially powered up Steem power) cos presently the value is hard to see.
The platform is still in it's infant stages. More things can easily be added down the line to give SP holders value off of a large user base.
do you own any shares in Facebook?
no. just making it obvious that Steem coins aren't shares . so the comparison TDV makes to investments in Facebook and Twitter is irrelevant. We saw the value of Steem doesn't really seem to be correlated to the growth in user numbers on Steemit. Frankly I'm not sure what could bring demand for Steem coin (and Steem Power) as it doesn't have any compelling use apart from curation which is only profitable for whales.
Ding ding ding
Also, did some of you miss the massive sell-off in the past few days by certain individuals? It should raise some honest questions.
I am just trying to be realistic from what I have see going on rather than speculating, this seems to be a nice diversion though from recent events.
This is great compared to your normal doom calling posts Jeff. :)
Keep it up!
Yeah when i first started on steemit i invested $1300 and its sad to see that investment go down to $198 😣. But as an invester as Jeff said im also use to seeing my investments go down so low but at the same time i seen them jump massively. So Im not worried as I truly believe in this platform and simply looking forward to my massive gains in the years to come 😆 the time to buy more steem power is now🤑!
Awesome as always sir !
I olso am from few months here and from the point of seen Steemit then when I sign up until low I seen only wonderfull things.
The site grows by the day and we have build a community here that is olso growing.
This moment is a perfect one now at 0.30 $, and investors can profit.
I am very confident steem and Steemit will grow into something even more beautifull.
Jeff, thanks for explaining the investment side of STEEM in a way that the average Joe can understand.
Reading your post today was a huge win for me.
I think I'll stop converting what little STEEM I have been able to earn to date and retain it as STEEM POWER. I may even put some of my Bitcoin back into STEEM.
Jeff un regalo para usted de mi parte :)
Are you saying that holding sbd would have been a better investment than powering up?
Is this the idea behind the savings option?
It is good to see you will still be supporting steemit Jeff :D thanks for the heads up. I don't think Facebook is going to be to happy if we kill it.
Facebook an the alphabet (soup agencies) are not going to be happy at all.
And Facebook is working ever so hard to shoot themselves in the foot, why shouldn't we help with a little push?
Steemit has lots of potential. Lots of upside.
Hell yes. I'd actually bought a fair bit of steem with btc about an hour ago, and noticed this post just now. Confirms my beliefs. Awesome as! :D
Good timing with your post. We could have a bullish engulfing chart pattern here.
Price has been hammered down since the time that you made that post (now 15:55 pacific time).
You are right. No confirmation.
Price went up a bit! .32 right now!
I still don't fully understand how the three types of value (STEEM, Steem Power, and Steem Dollars) will play out over the long term. Aside from technical aspects outlined in the White-Paper, how will the public perceive what the best strategy is? STEEM tokens are continuously produced, raising the supply, is this rate fixed or can it be adjusted (kind of like a central bank - which would defeat the purpose of decentralization)? Thanks for the post!
The rate Steem is generated is fixed at doubling the supply each year; it could only be changed in a hardfork update.
It's been a wild ride over the past 3 months but I think the best is yet to come.
I'm not cashing out yet. I'll keep powering up to get some sort of influence here. Steemit has potential as an economy. I don't treat it as an investment apart from my time. I only paid in a few dollars of bitcoin I had. It's very early days. If and when it takes off it's going to be really exciting. Steem on!
Don't forget, you also promoted Monero at 2 dollars. Within a couple weeks it flew to 14 and presently sitting near 8. Nice job Jeff
Hi Jeff
"There is no Failure in life, just Feedback to learn and control your life"
Success is Learning, and sure I've been learning a lot since your initial podcast on anarchast"
I trying to get B$ to go to anarchapulco with my son (in my wish list since the first one
Keep on the Good Work
i have a few STEEMs in my wallet right now and they've been sitting there for a few days and I'm battling with myself whether to Power UP or convert to SBD. You, @dollarvigilante , just made my choice easier. Thanks for this great post. It's inspiring and we can use some inspiration in times like these. Powering UP!
Thanks for another informative post!
I haven't powered down yet, and I've got no plans to do so. I'm in it for the long haul, and your encouragement to do so only strengthens my resolve!
Why is now a good time and not later, won't steem keep crashing as it has been as long as the dev account steemit on https://steemdown.com/ is powering down? Half of all steem is still held in that account.
this is a good question. if we get an influx of new investment, a steady one to buy up those power downs, then steem would inch (or rocket) higher despite the power downs. Berwick is just saying that he thinks Steem is worth a bet anywhere below .30 cents. But this is for guys that can afford to loose 100% of the capital. And especially for people that won't complain when it drops to 2 cents after they pay 32 cents... But I think that new investment... from the right types of persons would be good.
Bump this
The funds generated from sales by the steemit account are put towards future development, so I view this more as something closer to a company selling shares to grow their inherent value base.
Great post Jeff, I bought a nice chunk of Steem the other day. Now my wife and my Mother are taking Steemit serious. My Mom is posting twice a day and making decent money which is like putting gasoline on a creation monster fire. I look forward to where this platform goes.
Im totally in to powering up all the steem i get! I deffinatly believe in the platform and im here for the long haul! I realize your a very busy guy, but if you get a chance heres my latest post thats up to 70 upvotes and 25 replys! Please check out my post! YOU WILL LIKE IT!
https://steemit.com/steemit/@karenmckersie/is-steemit-crashing-oh-the-horror-please-say-it-isnt-so
I have a sense of urgency about accumulating Steem and powering up because I believe in this site...but I've never been anywhere close to making thousands of dollars - especially on one post. But I have to say that my ears perked up at the mention of a Steem plugin for WP! YES! That would be amazing.
So do you feel this way only about Steem or for other decentralized social media platforms? Do you think this is one isolated incident, or do you see other DSMs like Synereo, Yours.Network, Mask Network, etc. having the same potential? I am thinking Steemit will have a run for its money very soon and will not be the one to beat Facebook by any means. But like you said, its all speculation at this point ;)
Thank you, Jeff. You want to know what inspires investors? Sexy new Dev, such as SteemQ. That's the only info that's moved the market. People respond when they can see the potential for mass adoption. "It's a blogging site" is not sexy. Therefore, 'Market'-ing is key. A month out from Steemfest, there's plenty of time to get together new development promotion. Let's go Team Steem!
I just bought for the first time after reading this article.
I don't have a lot of money to throw around, so I only purchased 0.1 BTC worth of Steem. I love this platform and I really hope that this downward trend it value changes direction soon!
hodl!
I do think that the price of steem is undervalued as well.
I thought it would bounce back a long long time ago.
That said i do think some things here can be improved. I have published an idea of how i think steem can be better. Please read and support it. I really would like to get your feedback.
Thank you @dollarvigilante for your work!
I stumbled upon your site about a week ago.
I love how passionate and knowledgeable you are about the economy, fiat currency, central banks, the elite class, and various investment classes like gold, silver, stocks, cryptocurrencies.
I Am curious to see what will play out in the near future now that we are in the Jubilee/Shemitah period and just passed the Yom Kippur.
I wish I had known of your work back when you were recommending Bitcoin at $3 and Ethereum at $0.80!!!
Hi Jeff big fan here. Here is my writing on how I see it. https://steemit.com/politics/@greenman/war-mongering-in-the-next-30-days-is-100-political-to-scare-you-into-voting-for-the-establishment-moving-to-computational-trust
Thanks for this invaluable info. Another author says that one should wait til the price of steem goes up a bit before buying because the 2 founders of Steemit and other Whales are dumping their Steem recently in large volumes.
Agree?
Up voted and Look at my newest content about my orphanage life at age 7.
Sums up_
"Aside from bitcoin, ethereum, maidsafe and a few others, what other cryptos have the potential to capture the imagination of a large swathe of people? In fact, which crypto has the potential to become an even bigger name than any of them in the public's mind? Only Steem, in my opinion... because everyone can and could be using Steem related platforms as part of their daily life in the very near future."
Good Steem analysis, thank you.
This is a convincing argument for plowing back earnings but I am concerned that the coming financial storm will hurt the digital currencies almost as badly as the fiat paper. Perhaps worse if we see widespread and prolonged outages of the digital infrastructure.
Great post Jeff, i shoot you an ReSteem ;-)
Steemit is printed too fast – it will be very hard for it grow. Considering the current lack of significant announcements, I expect the price going down close to 1 satoshi.
I'm going with @dollarvigilante on this one. 100 fold!
Hey Jeff, don't you think that the 100% inflation of steem per year might kind of dilute the price which makes it a bad long-time investment?