Why The Drop In The Price Of STEEM Is A Good ThingsteemCreated with Sketch.

in #busy5 years ago

We see a lot of people pointing to the price of STEEM and its drop as a major problem. Personally, I think this is the best thing that could happen to this ecosystem.

Of course, if you are a person who is living off STEEM, then the conversion rate to fiat is a problem. However, outside of that, the lower price is a major opportunity to the ecosystem.

There are a couple points that must be mentioned with this.

Distribution

Steem, like all cryptocurrencies suffers from poor token distribution. While I maintain that we have a system that alters this over time, it is a slow process. Earning tokens is something that happens on a daily basis with Steem. There are a little over 300 accounts (net) each week getting their very first SP. Hopefully, over time, some of these accounts will keep growing, adding to their holdings.

One aspect of the system that is vital is the purchasing of STEEM. A lower price can help this enormously since it allows smaller accounts to grow at a faster rate.

With the present price of STEEM, a Minnow is instantly created for around $180. For someone who has 250 SP, doubling the holdings takes under $100. To many, this is money that is out of reach. However, I am certain there are a large percentage of Planktons who could afford this. Hell, there might be some who spend that on a couple meals eating out.

Certainly, the larger accounts can take advantage of the situation like the smaller ones. There is a big difference that gets overlooked. The incentive needs to be big enough. While an account with 200K SP can add, it is not likely to take place unless it is a significant change. To add a few hundred, or even thousand, of STEEM is not enticing. To double an account of this size still requires $72,000. While it is possible someone takes the opportunity to do this, there is a better chance of a few thousand accounts spending $240 apiece.

In fact, unless everyone thinks the price of STEEM is going to head much lower, thus presenting a major buying opportunity, it is something that smaller accounts should be doing.

Steemit Inc.

We cannot talk distribution without discussing the Whale of Whales, Steemit Inc. This single organization controls a great deal of the Steem Power. I never looked it up but I would believe they have close to 1/3 of all the SP out there. This is an overwhelming amount.

Fortunately, their present business model is such that most of their funding comes from STEEM. While they did cut expenses, their most recent transactions show a conversion of 500K SP. This mirrors what took place last month.

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https://busy.org/@kawaiicrush/steemit-moves-a-nearly-a-half-million-steem-again-half-of-that-sold-next-day-steem-about-to-implode

Some will point to the fact that it is still a minimal amount for what they own. That could be true. The point is that each month, a conversion of this size, does add up. Sure, 500K is only 1% of 50M, yet would you like giving up 1% a month of your holdings? Plus, this is a 12% shift in a year, something that was taking place for the last couple of years.

@exyle often points to his belief that, over time, earning STEEM is going to get harder. This makes sense when you consider two points. The first applies to simple numbers. As more people join and get active, the pool is spread out over more accounts. This means each individual will be earning less.

The second aspect to this is when more polished people start to use Steem. For the most part, the majority on here are amateurs. We write a blog or put together a few videos. It is true we get better over time yet we are not big time content creators. Some of them could end up making their way to Steem and bringing big followings with them. Once again, this will only serve to make it harder to earn STEEM via content creation.

Which is why the opportunity we are sitting in is so important. How much would things change if 10,000 put up $100 apiece to add a couple hundred SP to their accounts. The number of Minnows would jump through the roof. While the overall distribution of STEEM wouldn't be that radically affected, it would be a nice tailwind.

I know there are a number of people on here taking advantage of the present pricing to add to their holdings as money allows. In my opinion, this is a smart move. Personally, I have an entry point where it makes sense for me to buy a significant batch of STEEM.

It is something that I think all should be pondering when they are looking at their accounts and the ecosystem as a whole. Powering up does end up paying dividends over time. We are on a platform that ends up compounding one's holdings in many different ways.

The purchasing of STEEM is as much a part of this ecosystem as an upvote is. It all has an impact.


If you found this article informative, please give an upvote and resteem.

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Long term it is the best way to decentralize and move forward but short term it brings challenges as developers and investors will think twice about allocating too much capital to build with the mounting selling pressure. I think they should stop selling Steem and issue a SMT to fund themselves instead.

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At the current rate of sale by our investors, and the way they discuss the inflation like it belongs to them, instead of being theirs to allocated in about 5 years Steem will be a great investment. :) For now, I have no desire to watch the large accounts liquidate my investment funds.

This could be a once in a lifetime opportunity to get a real voice in the future of how the internet will work. The moment always seems ordinary while in it, yet extraordinary once the dust settles and time matures.

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Hope you have some inside 411 when you make a comment like this. 😊

i did bought like half of my steem and that is a kinda a lot here. and i would probably buy some from time to time but there are too much difficulties to buy small.

Netcoins has made it super simple to buy Steem. And, not nearly as expensive at all as the way i tried to buy before. My new self-care activity .... buy some STEEM. Would be awesome if you, me and Mark are right ✊👏😀

Yes, Steem is low in price but so is every other crypto. I'd recommend people to balance their portfolios with multiple coins so you're not literally putting all eggs to one basket. Every serious cryptoholder should have some btc and eth at least as those two are the ones currently gaining mainstream adoption and will continue to do so.

The only relationship between BTC and STEEM is that most of the exchanges have them paired. It seems no surprise then that as BTC increases in value one should expect to get more STEEM for them. A STEEM - fiat pairing may help with that.

here you go...
https://www.lykke.com/exchange

there has been a steem USD pairing for a few months but no one uses it and there is no liquidity. Since no one uses it there is also no liquidity... a true chicken/egg thing

My feeling was that the bottom was around 5275 btc satoshi per STEEM, when buying my Dolphinhood. Did not factor in how BTC's rise would affect STEEM. 😎

I would buy more steem but it is also my biggest holding, I want to pick up some more BTC and ETH now to balance out a bit

This is very true and commit people to stay active and increase the price.

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Reality at its best.
Good timing to pile up steem.
Keep on postin

Posted using Partiko iOS

giphy7.gif .taskmaster4450,YOU are wrong!!!

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