This is a fun little experiment to illustrate the real price value of Steam. I'm no trader or a crypto guru but I can tell you that the real price of 1 Steem is way more than what it is today.
Because every cryptocurrency goes through Bitcoin, we can assume that Bitcoin is the medium between the real world and the crypto world. Currently, there is just little more than 16 400 000 BTC in circulation. Divide the market cap by the supply and we get the current price of Bitcoin, about 2500$
41,091,995,045 ÷ 16,418,475 = 2502,78
Right now there are exactly 235,569,543 Steem tokens with the current market cap of 409,556,496$. Divide the market cap by amount of Steem and you get 1.7, which is the current price.
Now imagine there were the same amount of Steem as Bitcoin tokens. In this scenario, we get:
235,569,543 ÷ 16,418,475 = 14,34.
So one Steem is worth little more than 14$.
This is just a mind experiment. After all, this market is made up of speculation. I believe the price of Steemit will grow even more. I always do this calculation when I see a new coin to get a rough estimate who much its worth if the coin had the same amount of coins as Bitcoin. This doesn't have any practical applications when it comes to trading, but it gives me a rough idea of the speculative value of a coin, and I feel a little richer knowing I have a relatively large amount of steem in my wallet. Anyway, Steem is priceless!
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Resteemed.... see u on the moon!
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Likewise!
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Haha, see you there.
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Interesting discussion. Really appreciate you bring this to our attention. The decision to buy a coin should be based on real analysis of the coin. I found that people keep buying coins without have any knowledge of them. This is considered high risk. I really advice people to take a look at: https://www.coincheckup.com. This site is really helpful in my coin research. I don't know any other sites with so much indepth analysis.
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So what you are basically saying is that we should imagine that Steem isn't printed non stop (unlike Bitcoin, which has a cap), then make some wrong calculations, and presto, Steem is one of the best currencies!
I'd like to point out the current market situation, which is governed by sound mathematics:
1 BTC = $2400
1 Steem = $1.7
In the future, Steem will go down, as more and more is printed, while the value of Steemit (the only service using Steem) will not increase as fast (or endlessly - because Steem is printed non stop)
In the future BTC will go up, because it is a finite resource, that will not be printed endlessly, like Steem.
I will go ahead and answer your next question - the price of Steem and all other cryptocurrencies went up because of WannaCrypt's money laundering. It may continue going up, because of the new ransomware "Petya".
But, as soon as massive money laundering subsides, Steem will hit rock bottom again, as it historically has proven to do.
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Bitcoin has inflation too.
Steem has 9.5% per year inflation, reducing by 0.5% per year.
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Bitcoin does not have inflation built in as Steem, as it is not endlessly printed. Also, the rate at which both currencies are printed is different, therefore Steem's inflation is much higher.
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Both currencies have inflation, and slowly taper off, but at different rates. Steem requires different parameters to be functional as a blogging currency, and you couldn't run steemit on bitcoin. I'm not worried about the inflation rates.
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I think you should be - this brought Steem's price down in the first place. And you are right that if people are to be given free money to give upvotes it can't be otherwise.
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Steem previously had a much higher rate of inflation, but the rate was changed 8 months ago. Inflation is always a concern, but I think demand for steem will massively out strip the dilution from new coins.
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The rate of printing may have been changed, but influencing the actual market inflation (perceived price of Steem, number of new users, traders interested in this currency, Steem stuck in inactive accounts, burned Steem by promotion) is really difficult.
Remember that despite the efforts of the developers, Steem remained cheap right until mid May, when all currencies went up, because of WannaCrypt's money laundering. And once things return to normal (i.e. a long enough period without new ransomware), its value will drop to its previous levels.
As soon as the price of Steem drops, so will demand for it (most authors don't even make 1SBD on their posts), further reducing interest in this cryptocurrency. It's a cycle that both increases and reduces the price of Steem at fast rates.
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I know all of that, that's why I said imagine.
A great mathematician once said: Logic will get you from A to B. Imagination will take you everywhere.
Anyway, thanks for pointing out the technicalities and difference between Steem and Bitcoin. As for the price, I can only speculate.
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The problem is that most people perceived these calculations as indicators of the bright future of Steem, because they can't comprehend them - you can see that in the comments.
While it is difficult to predict the future of any currency, it is possible to compare two and choose one to be a better investment than the other, which is what I did here.
Ultimately, once Bitcoin stops being produced (and I believe much before that), a new currency with faster transaction speeds will take its leading place. At this point, this is likely LiteCoin or a clone of LiteCoin with ZCash's anonymity.
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This may be so, but I'm not OK paying 3$ for a hour-long transaction as of today, not to mention in the future.
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The reason you have to pay so much is because Bitcoin is highly sought after (hence its price). And you can't really send Steem to anyone, without a Steemit account.
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True.
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You really think this is going to happen. I hope not because I love the platform
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You can always use the platform no matter what Steem is worth.
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You can always store your crypto in SBD. Actually, it thrived when the whole market went down, in the last few days.
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Don't we burn money through promotions? And it's not only Steemit that's using STEEM. There's busy.org, chainbb... There are also other upcoming dapps such as zappl and SteemQ. I speculate that demand will beat the increase of STEEM supply.
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Yeah, i think you're right!
The current steem inflation is only 9.5%, and i'm sure demand will be greater than that.
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I always spare some SBD to burn on promotion, even this post is promoted. I think it's a win-win situation.
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These are just different frontends to the same blockchain. Can you send Steem as you can send Bitcoin? Not really. Steem is an integral part of Steemit and was never intended to be used as other cryptocurrencies.
Any service using Steem would require the user to enter his account credentials, which allows a third party to obtain his active key. Would you entrust your Steem savings to someone else?
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The point is that they're different when compared to Steemit.
You can send STEEM as you can with Bitcoin. The receiver will only need to have a Steemit account. You can send me one if you want to. ;) Just choose transfer from your wallet.
Maybe your concern is that with the legality. It's true that STEEM is not legal to be used as money but I think that only means "You don't have any protection that you can use during court trials when something bad happens to your STEEM upon transacting with a merchant." That's all. And who knows, it might get legal someday. There also other alternatives to receive the value reflected in your STEEM wallet. One is exchanging it to BTC via Poloniex, Bittrex, blocktrades, etc.
Not all services require everyone's active keys. Some only require posting keys.
With regards to your question. I don't want to give out my active keys to just anybody. I'll only give it to my family. Also, I think there's a way to renew private keys, just not the master key.
Some people say that you can entrust your permission keys to services that are open-sourced 'cos there everyone can tell that the keys aren't being stored to databases that the service can access to. However, there's a risk of them changing it so I still won't. Does changing from open source to closed source happen though?
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Exactly my point - you need to have a Steemit account. Steem is just not the typical cryptocurrency. If Steemit goes down, what happens to your savings?
Legality? Not really. Steem as good as any other cryptocurrency, save for its limitations. In general, crypto markets are not regulated, so you don't have a case for any legal dispute regardless of the cryptocurrency you use - be it Steem or Bitcoin. There are a few regulated exchanges, like Bitfinex or Bitstamp, but I won't have a case even with them - most administrative personnel in Eastern Europe have no idea how to use a computer, let alone have any idea what a cryptocurrency is.
It's true that some services require only the posting keys, but these services can't really handle your Steem (as in moving your Steem there).
Indeed, you can change your keys, but in the mean time your cash will be gone.
Open source services simply provide the code to their software product. You have to know how to read it to reach the conclusion that your data won't be stolen. And, as you say, there's no warranty that they won't introduce some change to their version of the open sourced product, once deployed on the server.
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But that doesn't make it any different than bitcoin. BTC requires a wallet that supports it, which means that it requires an account. You need an account in coinbase, bitfinex, etc to be able to own some BTC as well as trade them. Also, obtaining a steemit account won't be like this for long anymore with the recent proposal for HF 20 entitled Velocity.
May I ask why would they need our active keys? Unless they're banks, which is what every crypo is trying to replace, I can't seem to know other examples of services that will ask for it. Does busy.org ask for it? I think they do but I'm not certain. If it's true, I think Steemit Inc trust the developers behind it hence they tell everyone that they're one of the official front ends being supported by Steemit.
If that's the case, then I simply won't give my active keys to just anyone no matter how good their service is. I think I can trust my funds enough to Steemit wallet.
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The difference is that you can't take your money out of Steemit. For example, the @poloniex and @bittrex accounts have to store all their Steem here. I'm certain they would rather have it in a private wallet, in case Steemit goes down, because that reduces the risk of their million dollar investment.
With Bitcoin you can have your cryptocurrency on any site or even use your own wallet. You can even print out Bitcoin on a piece of paper, if you wish - it's just a public and a private key.
I mentioned active keys for two reasons:
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Correct me if I'm wrong. When I send X amount of steem to @null the coins get burned. I get more coverage, there are fewer coins in circulation, making them more valuable.
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You are right that the coins disappear. As far as I am aware, you only get more views on the Promoted tab and nowhere else.
Which brings up two questions:
Something to consider in this respect - there are thousands of dollars in the form of Steem, stuck in inactive user accounts. What would happen if most them return and Power Down?
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I've been promoting my posts ever since I joined. As someone working in the entertainment industry, I cannot stress the importance of promoting content. I had a couple of cases where after I paid for promotion I immediately had a boost in a post. Maybe I got lucky. I can speak only from my own experience.
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But would you say that you always got back the money from promotion, since day one?
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No, I don't give all the credit to promotion. But I believe it did help, even if just a little bit. I don't think finding ways how to make the most money on the platform is its real purpose. I don't feel I lost money, even when I paid more for promotion than the actual payout. I got more coverage, and surely some of my followers found me there.
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..yes ...this is the pure mathematical calculation.
very cool post - made m e think about the difference between steem and bitcoin, and there are some difference
while bitcoin is
in any case ...i believe that by the end of the year the bitcoin will cost at least double then now, above 5k$ and steem will cost 10$ - more then 5 times then it's current price
so the future is bright, man
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Let's say that steemit would have a total of 16,418,475 steem. But wouldn't that mean that the total value of steemit would be divided across the amount of steem currently available? This would pretty obviously mean that the value of steem currency would be much lower, as the currency would have less demand as a result of the new supply of coins.
And still, the thing is that bitcoin is very demanded, while the supply is definitely limited, as opposed to steem currency - both when it comes to the supply, which is not limited, AND the demand, which clearly is not there, since the currency is only worth 1.7 USD.
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demand - this is the main point.
the main force of steem is actually it´s demand that increasing all the time
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Exactly! The demand of steem IS infact increasing, but that doesn't change the fact that the demand of bitcoin is much, much bigger. :-)
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I agree with you
look metaphorically speaking if Bitcoin is Gold - steem is Aluminium
of course Gold is much better but also aluminium is useful
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Let's hope.
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Great times are comin'
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LOL Dude!
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:))))) this is good
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And this analysis ignores all the use cases that Steem has over bitcoin. This surely would be another order of magnitude or two.
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Of course, as I said it's an experiment. You can do many experiments, only the correct ones will prove or disprove it.
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nice train of thought here! onward steem its gonna be an exciting next couple of years here on the platform. all us early users have been enjoying a crazy ride and I think it hasnt even begun to really go nuts yet... with love my friend steem on ;)
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This is just the beginning. Brighter times are ahead, just steem on :)
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God point, I agree that steem is undervalued now. However its good for us to keep buying and powering up asap because when people recomise the value of steem and steemit, price will shoot up. thing by year end you will see spike in price. Keep powering up buddy. Success.
Dont forget to check out my post for a link to collect free crypto..a once in a life time opportunity
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Thanks fro the feedback. I'll check out your blog.
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Welcome and good luck. Lets stay in touch
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Great article :) Steem will go up soon, think so to. Upvoted.
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Sooner than we think.
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This is a really cool calculation! Because technically speaking that should be the actual value. Imagine this calculation becomes so noticed that they just change the value of Steem to $14 :D We will be rich :P
You can check out @ENAZWAHSDARB for the best Entrepreneurial content! If you appreciate what you see, you can leave a follow! :)
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Imagine that :)
I'll check out your blog for sure. Thanks for stopping by.
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Well, the crazy thing is, soon the currency will actually be worth $14 with it's current calculation :D That's so amazing haha! And thanks. Let me know what you think! :)
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encouraging!
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It will go up :) I think next three months we see steem 3.10 $ .
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We will see. I'm also eager to find out, even if we were wrong. There are forces we can't control in the crypto world. All we can do is ride the steem train :)
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I think we have to be patient.
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Just hodl.
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:))
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very nice prediction..
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We will see :)
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For now Steem just rises and falls with the rest of the crypto coins, but at some stage I hope people will realise its real value. Free and quick transfers should make it attractive
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Steem and Steemit will doubble many times in value. Just look at the growth of this platform!
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I believe so.
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Good post as always! I always learn so much from your posts!
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Oh wow! Interesting ☺️
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I think we might want to think about the fact that mind control is seeking to get its greedy hands all over crypto.
Govern = Control
Mente = Mind
Government = Mind Control
They are already trying to figure out how to benefit from it. lol
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help to help,vote to vote,earn to earn= Rich Together fighting all friends
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The market cap for steem is growing by the day.
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