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http://www.coindesk.com/steem-provokes-doubt-market-observers/
Potential Scam
Some market observers expressed their concerns that steem in and of itself might be either a pump and dump scam or a Ponzi scheme."My first impression is that it is a 'pump and dump' crypto where accumulators (founders, early adopters) will be looking to cash out on a major pump in price (distribution),” stated Petar Zivkovski, director of operations for full-service bitcoin trading platform Whaleclub. "Whether it survives longer term remains to be proven."Kong Gao, overseas marketing manager for bitcoin trader Richfund, provided similar concerns about steem. "Most of the articles on Steemit are promoting steem, which makes it seem like a variation of a Ponzi [scheme]. Furthermore, it is the same group of people behind Bitshares." As a result, "I don’t think it is sustainable and I don't take it seriously. I've also spoken with a couple of serious altcoin traders in China” and they have their doubts as well.Eliosoff reiterated Gao's point that steem might be a Ponzi scheme, predicting that the digital currency "will grow and grow until there are no fresh users to suck in and then quickly collapse," a situation he described as being "the Ponzi way."
So, I first came across STEEM and didn't think too much about it. I even created an account, posted 1-2 articles and thought, oh ok , this is still beta.
After some time passed, I noticed the price rising to around the 60 cent mark. When it hit a dollar, I decided from a trading standpoint, it was late, but I need to buy in now.
Then came the rise to $5 and I sold and took my profits, but that is when I finally started looking seriously at the platform. Specially when the dump came and it didn't plummet back to the $1 range. It stayed true around $2.80 - $3.80. It is holding value.
I know that STEEM, Steemit, Steem Backed Dollars, etc., is not the norm for crypto. However, most crypto currency worth investing in is actually backed by projects or platforms that have actual uses, and solve real-world problems. Steemit seems to do this.
Now that I've paid more attention, I've noticed that many news sites and a few Steemit posts are floating around the word "ponzi."
I just don't see it with this platform. If you want to see the definitions and root of the word ponzi, check out this video below:
Bitcoin and many other legit digital currencies have always had to answer the ponzi accusations. And time and time again they have proven wrong.
Yes, in the crypto world, there are plenty of scams and ponzis, or just flat out failed or abandoned projects, that have cost investors, and users money. However, I don't see the argument for Steemit.
So, my questions is, why is Steemit, a legit platform, seeing so many articles claiming it's a ponzi, or could be a ponzi? I don't see the argument compared to many legit ponzi's in the bitcoin space. Is this just part of the normal growth cycle of many legit digital currencies? Many Bitcoin purists, are quick to call any alt-coins scams and ponzis. Even platforms like #factom, #ethereum, #the-dao have been called scams, to cypher money from #bitcoin.
If you want to see true ponzi's, check out things like #onecoin or many of the #savings, #investing, or #cloud-mining platforms that steal money from people daily.
I'd love to hear opinions supporting both sides. Please upvote, comment and share.
I was listening to World Crypto Network show yesterday that is hosted by Thomas Hunt (Mad Bitcoins) and usually has a handful of guests. I generally like and respect these guys who have been around a long time (in crypto years) and have a pretty good track record. Overall they are saying 99% probability it is a Ponzi. They don't like the issuance of steem, the 2 year lockout, and the vagueness of the white paper.
I am willing to suspend disbelief at this point and see if this is truly sustainable, or is a novel mode of failure. I don't think it is an intentional scam because Steemit as a platform is working, is fun, has brought many new people in, and has taken real effort to create. I suppose you could say the same about some classic Ponzi schemes too.
While we're figuring this out don't bet the farm (i.e., careful with those powerups) but continue to use Steemit, have fun, and take some profits.
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Yeah, I never bet the farm on any digital currency, including Bitcoin. Rule #1, diversify. I am still curious why they think that locking in for 2 years is indicative of a ponzi. It seems like a legit way to promote long term users, since influence is based on those long term users locking in.
It's def a weird platform, even by crypto standards, and I'm still reading as much as possible trying to figure out some of Steemit. The community has been great in explaining things to new users.
I never think badly of anyone blowing the whistle. Even I have called out some friends and people in the Bitcoin space on things that seem shady, such as onecoin, or cloud mining schemes.
I'm def interested in hearing some more hard facts that point towards a ponzi. I'll have to check out that WCN show to see what points they are making.
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