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Steem: Long-Term Potential Worth the Risk?

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Steem is one of the three currencies created by the Steemit platform and it presents an interesting investment opportunity.

While leisurely perusing the Steemit whitepaper, I started seeing something valuable in Steem, despite some extensive downward pressure.

Now, this article isn’t to be taken as investment advice for any short-term or long-term gain, but it will help present a few of the thoughts I had when reviewing this token.

The Problem:

In order to understand Steem, it’s useful we dive into the Steemit platform and the overall problem Steemit is looking to solve.

The battle for attention:

More than two million blog posts are written and published EVERY DAY, and each has to find a way to break through the noise. Many content creators utilize some sort of combination of owning their own platform (ie. www.alexmoskov.me), guest posting or being a contributor on various other sites.

The onus of content distribution falls on the content creator, and many content creators end up finding that content distribution can take more time and effort than the creation of content itself. Then, you’ve got content creators who operate at a much larger scale and are capable of creating much bigger impressions through the use of different marketing strategies.

This means that the content you see on a daily basis isn’t necessarily the best, but it might be the best marketed.

The Steemit platform helps alleviate this problem by rewarding content curators. People who upvote and comment on posts get rewarded. The more Steem Power Units curators have, the more their vote will count, the more influence they will have, and the more they will get paid as well.

The battle for monetization:

Unsurprisingly, The current content dilemma circles around money. The Internet has provided virtually anyone a platform to voice their opinions and ideas.

The digital environment has given multi-million dollar media companies a new outlet, and content creation has developed into a full-time job for many individuals.

The problem with content is how content is monetized. The most viable ways to get paid for content for many media companies and individuals are either through advertising, affiliate marketing, or some sort of payroll.

Creating unbiased content often comes at the expensive of the content creator. The audience expects high-quality stuff but isn’t so keen to pay for it.

The Steemit platform offers a solution by directly rewarding content creators for their content. If a piece of content is genuinely popular and valuable, the writer ends up being compensated. This money comes not from the audience, but from the Steemit network itself.

Steemit: the Solution the Content World Needs

Steemit is an extremely interesting solution. Here are a few quick hits of what you need to know.

Steemit has three different currencies:

Steem: The currency that can be bought and sold on most open markets. This is how most people using the Steemit platform “cash out”. Steem currently “erodes” at an annual rate of 9.5% every year due to the production of new Steem.

Steem Power Units: Steem Power Units (SP) are a more long-term offering. When you buy SP, you’re locked into it for 2 years. This limit is meant to keep people invested in the platform long-term and stop people from suddenly dumping their units on the market. Holding SP entitles the owner to a proportionate ownership share in the network. 90% of all the new Steem made every day goes to people holding SP. Additionally, half of what content creators receive when paid out per post is in SP.

Holders of SP receive a higher weight to their upvotes, helping users to build up more of an authority and influence on the site.

Steem Dollars: Steem Dollars are pegged to the U.S. Dollar and are a bit more stable. 50% of the compensation comes in Steem Dollars. Holders of Steem Dollars are able to do one of three options:

  1. Convert them into Steem and sell them on the open market.
  2. Hold them and essentially earn 10% interest when compared to Steem.
  3. Exchange Steem Dollars for SP and hold for the long term.

There’s a lot to Steem and the Steemit platform, but many of the intricacies fall beyond the scope of this article. I recommend learning more about Steemit and the role Steem plays in detail (the whitepaper is a great source).

The Opportunity

So, one of the biggest questions I had is “why would anyone hold Steem if it’s got downward pressure of at least 9.5% every year?

Well, my bet is on the opportunity outside of just market forces surrounding Steem. The Steemit platform is far from nearing how big it could potentially be, and it’s got a few big ingredients working in its favor:

  • Building an engaged community. The Steemit platform is doing an awesome job of not only incentivizing engagement through monetary compensation, it’s also started to attract a highly engaged and loyal community (much like Reddit and 4chan).
  • The call for influencers is appealing. Soon enough, influencers with large audiences will see the value of being on the Steemit platform by holding Steem Power Units. It seems like very few influencers (even in the slightly esoteric crypto crowds) are currently making use of this.
  • Lethal engine for growth. Users of Steemit are best incentivized to refer their friends to their site and link to their articles. The onboarding of Steemit has some serious potential.
  • Steem’s not even close to its previous ATH. Steem was hovering around $4.00 momentarily in July 2016, and only started to slowly pick back up in May 2017.  
  • Establishing an audience and building the Steemit platform go hand in hand. Many content owners can find a home in Steemit and are able to invest in the platform to have more influence when it comes to voting or reaching consensus.
  • Steem Power Units. While SP is locked in for 2 years, holders get to enjoy some pretty substantial benefits such as accumulating extra SP every day.

Final Thoughts

While I can’t and won’t make any predictions on price, I think the evidence supporting the Steemit platform is hard to overlook.

If I were to surmise a prediction, I could see Steem Power Units being a practical investment for content creators (or any other digital marketing talent) looking to explore a new avenue for their content.

A few words of caution before we close this out: Steem has the tendency to be fairly volatile. It’s been around for awhile (relative to other cryptocurrencies) and experienced a pretty sharp drop from $4.34 to $0.102 a few weeks in 2016. It has seen a decent lift starting May 2017, but this could simply be due to the general rise in most cryptocurrency prices. Additionally, the downward pressure of 9.5% can be a tough pill to swallow.

Finding a way to capitalize on the potential of the Steemit platform and the current Steem prices could be incredibly lucrative.

Disclaimer: Author has no investment stake in Steem.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 18 rated postsAlex Moskov is a writer and entrepreneur with a passion for building and creating awesome things. Alex has experience in music tech startups, digital marketing, and cryptocurrency investing.




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Cardano Price Analysis: ADA/USDT Smashes Out of Wedge, but Saved by Critical Demand Zone

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  • ADA/USDT testing a huge area of demand and a breach by the bears could be catastrophic.
  • Cardano Foundation confirm reshuffle, as Michael Parsons, the former chairman, steps down.

ADA/USDT has continued to be victim of downside pressure after its latest bull run. The price had gained a chunky 20%, between 31st October and 6th November. ADA/USDT managed to peak just above $0.08200 territory. This was the highest level seen since 15th October. Shortly after, gradual selling started to take place, to then see all the gains plus much more taken by the heavy bears.  It appears current bull runs are not sustainable, very much vulnerable to being sold- particularly as these tend to happen in an explosive manner within a short time frame.

Cardano News Flow

Cardano this week made an announcement that Michael Parsons, the former chairman, has resigned from his position at the Cardano Foundation. Prior to this rapid departure, there had been much history of community members demanding for him to be removed. The position will be filled by the Council Member Pascal Schmid, a University of St. Gallen graduate and a financial expert. Cardano’s creator, Charles Hoskinson, accused the foundation and Parsons of neglecting their duties, in addition to bringing in close friends and family into top positions within the organization.

Technical Review – ADA/USDT

ADA/USDT daily chart

ADA/USDT is running at three consecutive sessions in the red- a move which is inline with the broader market, a mass cooling across all major cryptocurrencies. The price was forced to drop a hefty 13% in the late part of the session on Wednesday. Price action was initially moving within a wedge pattern. This had been the case since the back end of September. ADA/USDT was contained within this formation.  Given the noted heavy selling pressure that was seen across the market late Wednesday, the lower trend line of the wedge was forced to give way to sellers.

Looking to the downside, ADA/USDT has been saved from further declines thanks to a critical demand zone. The area is seen tracking from $0.07000 down to $0.06000. It has proven to see strong buyers swoop in. The price last traded down here between 12-18th September. Buyers kicked in to then drive ADA/USDT to the north, seeing gains just shy of some 50%. The bulls were able to run the price up to $0.09500 into a known supply area. A peak was seen, and this rally was then gradually sold.

Should the above-mentioned demand area fail to hold and see a daily close below, it could be catastrophic. A development such as described, could leave the door wide open to a fresh wave of heavy selling.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 50 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Crypto Market Flash-Dips 12%; Bitcoin Price Hits New Yearly Low as ETH, TRX Bleed Out

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The global cryptocurrency segment experienced a market-wide sell-off on Wednesday afternoon, losing $25 billion, or 12% of the overall market cap.

The bulk of the losses struck in a brief one-hour window, between 15:30 and 16:30 UTC. The sudden flash dip came as a surprise to say the least, and followed this morning’s $7.5 billion sell-off which, without the benefit of foresight, seemed significant at the time.

Just When We Thought We Were Out…

Now the altcoin setup looks radically different, with several coins threatening the yearly lows of August-September once again following an entire quarter of recovery.

All of Bitcoin Cash’s recent gains have disappeared, with BCH sinking 30% in the last week alone, and close to 20% in the last day. The same pattern persists among all the recent market growers, as yet another great correction unfolds.

BTC/USD Hits 13-Month Lows

Bitcoin did however strike new yearly lows, or thirteen-month lows to be precise, after BTC/USD fell to $5,765 – a level not witnessed since October 2017. That puts BTC on 9.8% losses over less than twelve hours, after falling from this morning’s $6,395.

Of Bitcoin’s $6 billion volume at time of writing, you have to look eleven places down the charts to find the first cryptocurrency that BTC has been significantly traded against. The top ten most concentrated trades are all against either fiat currency (USD and KRW), or dollar-pegged stablecoins – specifically Tether (USDT).

Ethereum Sinks Along With Mining Profits

As covered earlier on Hacked, Ethereum’s initial fall below the $200 mark resulted in Ether mining no longer being profitable. However, the $189 price quoted in the article continued to fall further, landing on $179.49 and resulting in a 14.4% crash for Ethereum from last night’s high of $209.78.

That’s still slightly above the $170 valuation recorded during the dip of September this year, and saves ETH from notching up a new yearly low along with BTC.

Tron (TRX) Threatens Yearly Lows

The value of TRX fell 16% from $0.022358 to $0.018757 for Wednesday, pushing the coin closer to the lows of August when TRX hit the eery number of $0.016666 before rebounding.

This time the price rebounded to the $0.019 level, which is a hopeful sign for the altcoin, although TRX losses now stand at 22.5% for the last seven days.

All of the coin growth surrounding BitTorrent, record transaction volumes, coin listings and everything else that came out of Tron HQ in recent months has now effectively been wiped out.

Few coins were spared the bloodletting, and even the stablecoins were shaken by the sudden sell-off as Tether dipped to the $0.97 range once again. Despite the numbers quoted above, the worst of the losses came from the lesser altcoins, with recent gainer Basic Attention Token (BAT) now down more than 40% for the week.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 88 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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Update: Crypto Selloff Deepens as Bitcoin Hits New Yearly Low

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The cryptocurrency market underwent a massive selloff Wednesday, as bitcoin breached new lows for the year and major altcoins booked double-digit losses across the board. Bitcoin cash experienced the largest percentage drop, effectively erasing gains made in the run-up to Thursday’s hard fork event.

Market Update

Cryptocurrencies have given up a combined $25 billion in value over the last 24 hours, as markets approached new lows for the year. The selloff intensified through the late morning session, driving the crypto market cap to a low of $187 billion. At the time of writing, cryptoassets were worth $188.4 billion collectively, according to CoinMarketCap.

Trade volumes surged 33% to $17.6 billion as investors rushed to liquidate their positions amid the selloff. All major exchanges reported a sharp rise in daily turnover, with volumes on Huobi, Bitfinex and LBank surging 100% or more in the last day.

Bitcoin’s price collapsed more than 10% on Coinbase to reach a session low of $5,530. At the time of writing, BTC/USD was worth $5,675.

Bitcoin cash, the fourth largest cryptocurrency by market cap, relinquished a whopping 18.1% to reach $433. In doing so, it completely reversed all the gains made in the last two weeks.

Ethereum fell 12.1% to $184, XRP lost 11.9% to $0.4576 and Stellar XLM declined 12% to reach $0.2303. With the exception of USDT, a dollar-backed stablecoin, all cryptoassets in the top-20 lost 7% or more on Wednesday.

The following snapshot, courtesy of CoinMarketCap, highlights the extent of the selloff.

Bitcoin Dominance Grows

While bitcoin certainly wasn’t spared from the latest rout, its share of the overall market climbed back above 54% on Wednesday, a sign that remaining capital was consolidating in the largest asset store. Bitcoin’s dominance rate has since fallen back to around 53.1%.

Extended periods of volatility for altcoins and tokens have provided bitcoin with a linchpin of support since the bear market began earlier this year. This has been most recently demonstrated by narrower price ranges and sharp declines in volatility for the leading digital currency. As Hacked recently reported, bitcoin’s volatility index fell this week to its lowest level in over two years.

Although there was no immediate catalyst for the rapid decline in market prices, anxiety over the future of bitcoin cash likely factored into the equation. The protocol’s primary implementation, dubbed bitcoin cash ABC, has won support from major industry players ahead of Thursday’s hard fork. However, recent data show that the network’s hash rate has tipped in favor of bitcoin SV, a competing protocol being pushed by Craig Steven Wright, Calvin Ayre and some very large mining pools. This information may have contributed to a sharp spike in SV futures prices on Wednesday.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 664 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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