Discussion - What are reasons investors avoid STEEM?
There are almost 2,000 cryptocurrencies listed on coinmarketcap.com. STEEM is currently #32 out of all of them. #32 is good, but I feel that we could be doing much better. I think that a large part of the reason we are at #32 (and not #22, #12, or even #2) is because STEEM gets overlooked by many potential investors. I am interested to hear why people think that is.
What's interesting is that often all of the things that are so important to us within the community are not even on a potential investor's radar. For example, did you know that some potential investors still think STEEM has 100% / year inflation? Some of the things that we are concerned about as a community are probably on investors minds too, but you would be surprised how little they know or care about many of the things that are so important to "end users".
Have any of you actually talked to potential investors about putting money into STEEM and gotten feedback on what their thoughts are? Have you considered investing some of your own money into STEEM? (If 'no', then why not?)
If you had 60 seconds to talk to a potential investor and tell them five things that they may not know about STEEM, what would you say?
Please share your thoughts in the comments below.
Hi @timcliff... allow me, for a moment, to take the 50,000 foot overview of investing, as I have experienced it.
In conventional investing, there is always a tradeoff. High "current income" almost always comes with a considerable downside risk to the price of the asset you're holding. High current income typically comes from high risk "junk" bonds and sketchy Real Estate Investment Trusts (REITs). Sometimes current income can also come from EFTs specializing in currency arbitrage.
MOST investments are a long term (2, 5, 10+ years) proposition hinging on appreciation in the value of the asset, because the underlying project does something really excellent. For example, I had the good fortune to be able to buy 1000 shares of Dell computer when they were "nothing," and I paid (adjusted backwards for splits) about $0.94 a share, and sold them for $40-something, several YEARS later. I made 50x(!) my money back. In that 3.5 year period I never received a single cent of current income!
What does this have to do with Steem?
A LOT, I'm afraid. When people keep pitching Steem as a "current income" investment, you're pitching an idea that REMOVES money from the table. As long as money keeps flowing OUT to income seekers, there's a constant drain on the system. In essence, it's like a bathtub you fill at the top, but because the drain at the bottom is partially open, the "pressure" needed to create an excess of demand over supply (the mechanism that drives price increases) never gets to really build.
I know it may sound like a dandy idea to pump $1mn into a bidbot that generates daily revenue... but consider the very distinct possibility that the delightful $500 a day you get to pull out PALES in comparison to fact that your million dollar investment has declined in value to $600K by the end of the year.
So step 1: Focus more on pitching Steem as a great "buy and hold" investment. If you want "hands on," do something along the lines of what came out in your recent interview with @steemed... delegate it to content and community based initiatives, thereby putting your investment to work at increasing the base value of what you put IN.
Step 2: Look at what KIND of investor we're trying to reach. There seems to be a heavy focus on "big fish," but what about the approach of having several thousand people putting in $5K each? This is a high risk gig. Spitting up $1m for this is a little bit like high stakes gambling. Asking 10,000 people for $5K each? Now we're looking at amounts a lot more people can "afford to play with." It also means any one single player has far less influence... both in terms of selling their stake AND community influence. In turn, a large number of investors gives you FAR more "bang for your word-of-mouth buck."
IF I had money of my own to put in (sadly, I don't — I pretty much live "shutoff notice to shutoff notice") I'd most likely delegate it in manageable chunks to an assortment of proven manual curators, with smaller delegations to promising newcomers... the latter as a sort "retention device."
Leaving issuance out of the picture. Let's look at what makes a currency look like Paypal or Bitcoin.
A Crypto-Currency Dressed in Paypal's Clothing
Bitcoin's main properties: A large amount of wallets, a relatively large amount of services and beggars accepting it, supply has a mathematical limit of 21 million. Now this applies mostly to BTC but BCH is also quickly getting acceptance because those who are early early adopters of Bitcoin didn't buy in to sell for a higher price. They bought in because they wanted to create an alternative to banking transfers and accounts. The early adopters and probably the big holders of BTC and BCH also have the same ethos because really the history of BCH starts the same time as BTC.
Let's look at how a user who doesn't have a really high end machine uses Steemit. Hmm... very few wallets. Only one GUI which is a web wallet. There is very small adoption even for a cryptocurrency.
Now compare say Paypal, with how a user uses bitcoin on blockchain.info. It's the same. You login to a website you spend money there. If something happens to that one website you are hosed. This is a misuse of bitcoin. Using bitcoin but not in a peer to peer way.
Now, how do most people use Steem/SBD? Compare that to how someone who uses say electrum or many other multi-coin wallets use Bitcoin (BTC or BCH). Which of these experiences looks like a legitimate crypto-currency and which one looks like a Paypal clone?
Early Coin Advantage
Before Steem will get attention based on transaction capacity, people will have to exhaust the Litecoin and BCH chain's capacity. That's going to take a long time if it ever happens. These two are doing great in terms of health and they also command a high market cap, which implies that is where the monetary "worth" is.
Transactions as Opaque as Glass
Although Bitcoin transactions are public there is a pseudo-anonymity to it with it's ugly bitcoin addresses. Which gives people the wrong impression. Steem makes it easier for people to see what transactions are making rather than making it possible.
Perhaps Steem will shine for charities who wish to inspire confidence with even more radical transparency than what bitcoin provides.
Application developers should look at what makes Steem different from the other cryptos before deciding whether it is the best option for an application.
Why steem isnt doing well in terms of perception.
I haven't met anyone with the money to be potential investors, I also don't think I'm the best person to pitch steem to investors. But If i must try i would say something along the lines of;
I get that investors are all looking to make as much passive income doing as little as possible.But My beef is that the current rent-seeking businesses built atop of steem is hurting the whole ecosystem as a whole.While investors still make money vote trailing curators and let them find great content on steem, why do that when pumping money into a bidbot makes more APR?
It's a hard discussion. People will hate my opinion and defend vote-commoditizing / rent-seeking to the death, Im just a minnow. I dont matter.
Much like the users of steem, you have no idea about what is soon coming to steem in the way of functionality, programming, hard forks, and plans worked on for the last year that about to debut.
Steem has gone through huge speculation. The steem speculation is secondary to its true value long term. What it is valued today, tomorrow, or next week, has absolutely no meaning to what it will be worth 5 years from now.
Early investors (which means today)... who see the possibility of exponential growth of a system, will earn exponential profits later. If you want exponential growths, you have to invest early.
Brands that have ignored steem, that are the first to try steem, are going to be the most adopted and trusted. If you know someone that has a brand that wants to get easy adoption and be "first on the scene".. let them know. This social platform is ready for some organization to take notice and be the first to exploit the opportunity.
Steem has proven its existence beyond the first year of operation. It has proven its existence beyond the second year of operation. It's entering its third year of operation and all signs point to a continued operation. Most business fail within their first 1-2 years of operations. If steem was to fail, it would have already. Take a second look and really analyze the potential for growth... most aren't doing that... get in on something explosive now.
Point 5 is based on the idea of the Lindy effect ;)
I recently bought $250 of Steem. Might not seem like a lot to some people but it's a big deal to me. I also regularly trade Steem back and forth on the market to make more. Currently, I use Binance.
I have no idea why investors don't seem to be that interested in Steem. Maybe it's because when they research it, they come across this social network that seems like a get rich quick scheme with tons of people making a ton of money on shit posts. It certainly feels like the crap in trending is keeping the price down. I wouldn't be surprised if it actually is.
As to the 5 things I would say to an investor, I have no clue. I know that to me it seems completely undervalued as a crypto currency that allows users to send crypto to one another with no fees and as a social network. Even with the abuse here, there is a community and a potential that is extremely undervalued.
why do people buy bitcoin? You can transfer money over a the Internet and there is no head office like in Paypal to stop you. Adoption is key. I am seeing better adoption of bcash than Steem dollars or Steem. Randomly people ask for donations in btc principally and to a lesser extent bcash, litecoin and dash. That is the reality of it.
What would people pay SBD for? It seems people who use Steem dont want to spend money on ebooks. There are some fine ones on Steemfiles.com. why is nobody buying?
I haven't even seen anyone advertising a book on steemfiles. Customers are supposed to magically show up? As you said, adoption is key. People need to start seeing more and more books on steemfiles and start checking themselves. Right now, it's early adoption.
Hi there,
Myself, I've been in crypto many years (mined BTC on graphics card) but only recently discovered, by accident, that I had a Steemit account. I googled something, clicked on an article, it brought me to Steemit, and then I noticed I was 'logged in' while on here. Before that, Steem was never on my radar.
So in my month on here what are my thoughts:
So what's the point to hang around? Over time Steem will become more and more centralised in only a few hands.
That's not a community; so most walk away.
Investors aren't idiots, with only hope of riches to come, so they shy away.
I also think Steem may have an identity problem at the moment. How should an investor view Steem:
(A) is it the blockchain that supports a social platform - where writers, photographers, ordinary folk etc can come and socialise, blog, vlog, make friends, have fun. Is is the new alternative to FB, Twitter, reddit etc; or
(B) is it a high tech protocol, that other apps can build on top of. Is it the better alternative to ETH, EOS, Bitshares etc; or
(C) is it trying to be everything.
For those who (1) are in the know and (2) have somehow broken through the initial hard slog -> I'm sure they believe in the platform and how it will ultimately end up successful. For those looking in now - it is not what its cracked up to be.
Thanks for reading (if anyone does)
😕
You are quite perceptive in your short time here.
Thanks.
It's really no different to issues other platforms have - each have similar aspects.
Steem/Steemit/Steemd/DLive/DTube/SMTs..and so on and on... it's too much. They all face similar problems is use-case: the rich get richer while the minnows struggle. Where is all the value of Steem coming from exactly...
Whales have to eat, and if there's no minnows/plankton around... then they die. Seems the initial feast is over and the rate of starvation is starting to accelerate. Some see it and are trying so hard to plan ahead (this is a great post by @timcliff in this regard), while others are still basking in their fat 'success'.
I'm waiting on the highly reputable whales to lead the way and show us struggling minnows! ;)
It will be interesting to see if you stick around and decide to invest on here.
Yes... we groundfeeders are all waiting to see the 'light'. lol
Hopefully there will be a major shift as to how things work - I'm not too familiar with HF20, but it seems that there is acknowledgement change is needed by the powers that be, hence HF20 - fingers crossed :)
500% spot on, @goose20!
It is option A. It is not at all like Eth. Bitshares has many assets. Steem only really has a couple hard coded ones.
I think most are of that belief too. I personally hope it can grow more 'social' - it can really be something if it works out.
Thanks for stopping by, commenting, and socialising :)
I believe that most investors are scared away by the high amount of really bad bitbot-promoted content which we get to see especially in the Trending section today. It's like watching a movie where 95% is advertising. Unfortunately most of the big Steemit accounts and witnesses embrace and exploit the bid-bot system for their profit without realizing that it's killing the spirit of the platform. Replacing genuine human interaction with automated voting-systems is the poison for any creativity.
It is an interesting view, and definitely a valid concern. I suspect there probably are some investors who have looked at steemit.com as an example of how the platform is supposed to work, and been discouraged / disheartened by what they saw.
I will play devil's advocate though and pose the question - how many potential investors do you think this really mattered to? Do you think that a majority of traders who are buying/selling on Bittrex and the other platforms are actually going and checking out the products behind the coins they buy? I would guess that the number is a lot lower than people would expect.
This sentence made a little light bulb come on so I hope it makes sense when I explain it @timcliff. I agree with the statement above because most investors (average Joe's) in the crypto world don't have the tech background to begin to understand the purpose of the projects behind a coin. Why would they be motivated to do research on something they assume they can't grasp?
Now what kind of project would those same average Joe's understand very well because it has dominated their lives the past decade or more? A social media product. While it may be difficult for the average Joe to understand if Golem or some other project is working as designed it is very clear to most investors that Steemit a "social media platform alternative" is not hitting its mark. That mark is very recognizable to investors because they have lived in that space for years interacting with successful social platforms such as Facebook, Instagram, and Twitter.
Investors take a look and don't like what they see because they know from experience what success looks like for a social platform. Well I hope that came across clear enough.
I wouldn't call people who just trade Steem on exchanges investors but rather traders. All they want to see is the chart of Steem; when the price is low they buy in for a few hundreds or thousands, when it spikes they sell. These people usually don't look at the technology behind the coin. However, if somebody really wants to invest big money into this then they will probably want to know more about it and they'll do their research. Why to buy big into a magazine which only shows ads? Is there even a point in placing ads in such a magazine?
Steemit today only works as a social media platform in small hidden niches. You only get good content in your feed if you hand-pick the accounts you follow. And it's getting less because the revenues are in decline due to SP delegations to bid-bots, thus many people are discouraged to continue using it regularly.
In a large number of cases Steem's 'product', imperfect though it may be, would be miles ahead of those other tokens being traded simply because it actually exists, works, and is being used.
Then again I've heard the argument that actually having a product in this market is bad, because then you can be tested in terms of real metrics like daily active users, growth rate, etc. as well as taking a hard look at things like how those things actually drive token value (or don't). If there isn't any working product it is all based on a good story and dreams of reaching the stars, without any hard numbers or hard reality to hold it back.
Yeah, how else did sbd reach 10$ each? O:-)
I’m not seeing the connection
I'm new to Steemit, so I may be too much of a newbie. However, some observations. The reason people think Pyramid Scheme is because in those MLM systems, the first investors (re: whales) seem to have made all the money and anyone below is just stuck at the bottom. So, a way to reward good content is needed. I write fiction on Steemit and rarely does anyone read it. Which takes me to point two: bid bots. Those are the only way to reward content and it comes at the mercy of the person funding the promotion. So I can invest $5 STEEM with the expectation of earning $7 STEEM. I have to put in the money. This seems a bit like buying into a pyramid. What is needed is a way to show how STEEM can be used for Smart Contracts and other things. Now, I love Steem because it is one of the few coins that actually can show Proof of Work and people are posting things on it and using it. Cynically, I can use more bid bots to earn more STEEM, but I really want readers. We need to find a way to improve discovery and readership. Otherwise, it will continue to be viewed as a way to make money from the pyramid.
@timcliff,
Sorry I won't take 60 secs to explain why invest on STEEM! I could tell it in few words! "SMT is coming", I think more will come and yeah I also invested my RL money in STEEM, yeah at the moment I am not in profit by that investment! But I am focusing long term!
With SMT, more will in and we can be at top 10 CMC!
Cheers~