Steemit

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Steemit
Steemit-big.png
Type of site
Social news community
Available in Mainly English
(content is also available in several other languages, e.g. German or Spanish)
Website www.steemit.com
Alexa rank Decrease 1,335 (May 2018)[1]
Registration Free. Mandatory for editing.
Users ca. 950,000 (as of April 25, 2018)[2]
Launched March 2016; 3 years ago (2016-03)
Current status Active

Steemit is a blogging and social networking website that uses its Steem blockchain-based rewards platform for publishers.[3] The Steem blockchain produces Steem and Steem Dollars which are tradable tokens obtained for posting, discovering, and commenting on content.[4]

Steemit, Inc. is a privately held company based in New York City and headquartered in Virginia. The company was founded by Ned Scott, and Dan Larimer, creator of BitShares, and EOS.[5][6]

Concept[edit | edit source]

User accounts can upvote posts and comments similar to other blogging websites or social news websites like Reddit, and the authors who get upvoted can receive a monetary reward in a cryptocurrency token named Steem and US dollar-pegged tokens called Steem Dollars. People are also rewarded for curating (discovering) popular content. Curating involves voting comments and post submissions. Vote strength and curation rewards are influenced by the amount of Steem Power held by the voter.[6][7]

Steemit includes third-party applications, such as d.tube, a decentralized video platform based on the InterPlanetary File System (IPFS) protocol. D.tube is similar to YouTube, but without advertisements, instead uses the built-in Steem currency which gets awarded by users upvoting videos.[8]

Monetary system[edit | edit source]

Steem is based on the Smart Media Tokens (SMT) protocol, developed by Steemit. As of December 2017, CoinMarketCap.com listed Steem with a $475 million market capitalization, and ranked Steem tokens 32nd of 1,358 cryptocurrencies. User actions, such as upvoting facilitates Steem's Proof-of-Brain algorithm, which also factors in the Steem Power a user holds, to provide incentives for content creators and the community by transferring small amounts of the Steem token currency.[9]

Steem began with a highly inflationary supply model, doubling roughly every year.[6] However, due to community demand, on December 6, 2016 the inflation rate of Steem was changed to 9.5% per year, reducing by 0.5% per year.[10]

On July 4, 2016, Steemit, Inc. officially launched Steemit, a social media with virtual currency rewards that runs over the Steem blockchain. On July 14, 2016, Steemit announced on their website that they were hacked. The attack, according to them, has compromised about 260 accounts. A little less than US$ 85,000 worth of Steem Dollars and Steem are reported to have been taken by the attackers.[11]

Unlike most digital currencies which are difficult to access for the majority of the world without any money to invest, Steem removes the friction for the average person to join in the cryptocurrency world by allowing earnings via posting without needing to buy in first.[12]

Criticism[edit | edit source]

Joe Lee, co-founder and CIO of digital currency trading platform Magnr, told CoinDesk, "Whether Steem succeeds as a digital currency will be more a reflection of Steemit’s success as a platform as opposed to the economics of the coin itself. This is a good example of a digital currency whose value will be closely affiliated to its utilitarian value as a social networking and sharing platform."[13]

"I'm skeptical about 'appcoins'/'appchains,' and Steem is very much one," stated algorithmic trader Jacob Eliosoff.[13]

Decentralize.Today published an overview of the platform and blockchain, pointing out how the developers did not allow users to mine Steem and then relaunched the currency to assure centralization (whoever owns the majority of the blockchain can authorize other people's transactions). Tone Vays said that the system is a Ponzi scheme.[14]

References[edit | edit source]

  1. "Steemit.com Site Info". Alexa Internet. Retrieved May 1, 2018. 
  2. Source: [1] (Steem SQL Database)
  3. The Concept and Criticisms of Steemit. Economics of Networks Journal. Social Science Research Network (SSRN). Accessed 25 February 2018.
  4. "Steemit: New Social Media Platform Which Pays You to Post". Cointelegraph. May 9, 2016. 
  5. Steemit Social Media Platform Pays Its Users, Sees Massive Growth; bitcoin.com; June 9, 2016
  6. 6.0 6.1 6.2 Steemit: The Disruptive Blockchain-Based Media Community, Investopedia, July 26, 2016
  7. "Steem White Paper" (PDF). Retrieved March 23, 2017. 
  8. "DTube: Steemit User Builds Foundations of a Decentralized YouTube". BTC Manager. August 23, 2017. 
  9. "How Blockchain-Based Cryptocurrency Can Make Online Publishing More Profitable". Nasdaq. December 27, 2017. 
  10. "Final Review of Steem Economic Changes". Steemit. Retrieved December 8, 2016. 
  11. "Steemit Website Hacked, CEO Promises to Reset Accounts in 48 Hours". Cointelegraph. July 15, 2016. 
  12. "The Social Network Doling Out Millions in Ephemeral Money". WIRED. October 4, 2017. 
  13. 13.0 13.1 "New Digital Currency Steem Provokes Doubt of Market Observers - CoinDesk". CoinDesk. July 23, 2016. Retrieved November 28, 2017. 
  14. "The Ugly Truth Behind Steemit – Decentralize Today". August 19, 2016. 

External links[edit | edit source]