The blockchain based social network site Steemit has experienced massive growth in the past week with over 1,000% growth in the value of the Steem token according to CoinCap.io. With a fairly eventful Summer shaping up in the world of cryptocurrencies and blockchain as far as Bitcoin’s halving, the DAO’s collapse and Ethereum’s hard and soft forking debates, a vacuum and opportunity seems to be opening for additional digital currencies to come on the scene and capitalize on the volatility.
Steemit has positioned itself as being an alternative to reddit; a platform that in theory is censorship resistant, as opposed to reddit which is often heavily censored depending on which subreddits and moderators are involved. More information about the impetus behind Steemit’s creation can be found in their whitepaper hosted on their website.
Steemit is an incentive based social network which uses upvotes similarly to how reddit and other forums validate content that has earned community approval. However, the incentives also merge into a payment system where users who post popular upvoted content will receive a digital currency called Steem in their Steemit accounts which are also cryptocurrency wallets.
There are currently two different types of digital rewards associated with Steemit on their website – Steem Power and Steem Dollars. Steem Dollars are the only digital currency which is actually tradeable for other digital currencies on exchanges. A video on the Steemit website claims that a Steemit Dollar is always worth about $1.00 USD. Steem Power is a sort of digital reputation measurement which gives a user power within the community.
As Steemit has only been around since early May, having a Steem Dollar market cap of over $180,000 million USD (at the time of writing this post), the investment and interest in the site as being a way to contribute, engage with and discover content within a rewards based system has garnered much interest.
Steemit isn’t the first blockchain and cryptocurrency based social network to come along – Ethereum-based Akasha is also developing a censorship resistant platform and Zapchain also built a Bitcoin rewarding social content site where users could tip each other.
The liquidity of Steem Dollars remains unclear as only two exchanges support the trading of Steem; Bittrex and OpenLedger. The price per of Steem was well over $4 USD per share and has settled down around $2.50 USD. It appears that users of the site will need to add their own funds to their accounts on Steemit in order to continue to participate in the community over time as they use up the initial value of what basic amount of Steemit Power is pre-charged to their accounts on signup.
The functionality of the site still appears to be in the early stage as there are few features to customize as far as how email notifications are set up and how to create post with content such as video and photos in a streamlined way. Qualitatively, there seems to be some decent blogs being written on the site, however there also appears to be quite a bit of spam accounts and low quality posts being shared, so that’s an obvious issue that Steemit will need to address moving forward in order to make the social network a worthy place to spend time and attention. However, if the market cap and signups continue to grow at the current rate, it seems likely that more improvements will be coming shortly.