All Change at Steemit Amid Criticism and Plunge in Value

Social media site Steemit has announced sweeping “economic changes” following a 90%+ drop in value of its currency token, STEEM.Also read: Steemit to Hold First-Ever Public Event in Amsterdam

Steemit: Changes ‘Reflect Wishes of Wider Community’

The alterations, published in a blog post on Friday, have already drawn criticism from the cryptocurrency community, which has been suspicious of Steemit since its rocky inception earlier this year.“Change is always controversial, but we feel the changes we have implemented reflect the wishes of the wider community,” the blog post reads.Steemit allows users to earn from posts via a voting system, mimicking sites such as Reddit but using exchangeable Steem dollars and STEEM, as well as points-based rankings knows as Steem Power.The platform saw huge growth in its first month of operation, before a hackin July raised questions about security.At the same time, the seemingly hypnotic popularity of Steemit drew attention — and subsequently criticism — from technical commentators in cryptocurrency. In particular, Tone Vays began publicly highlighting problems with the platform which, he concluded, demonstrated it to be untrustworthy.

‘Ponzi Scheme Aspects’

In July, Vays even held debates with figures such as Jeff Berwick and Blake Miles in which he went into detail about the “ponzi scheme aspects” of Steemit, among other issues. An example was the policy of limited withdrawals available for Steem Power holders, despite users being discouraged from holding wealth in the STEEM token by a 0.19% daily tax.“Once they trap your bitcoin in Steem Power, it’s locked up for 104 weeks,” he explained in the debate with Miles. “And that is what’s allowing them to run what I call a ponzi scheme – where it’s so difficult for older investors to cash out as new money is coming in, but the longer you’ve been in the system, the more it looks like you’re actually profiting.”Since mid-July, STEEM currency value has decreased to almost zero – from 0.0068BTC to a current level of0.00016 – or a drop of around 97%.Now, the sweeping changes will change many aspects of how Steemit operates, including slicing the withdrawal period from 104 weeks to just 13.

Conflicting Media Sentiment

Speaking to Bitcoin.com, Vays maintains his critical opinion and said that anyone still considering investing in any of Steemit’s tokens would be a “moron.”“They (developers) locked everyone in for a one-year duration before they could cash out while they were cashing out,” he said. “They claim all transactions are visible on their site, yet people caught them deleting their own washouts from view, and so on.”