Dear Justin Sun,
I would like to congratulate you on purchasing Steemit and the accounts that hold millions of Steem. I believe that you have hit the jackpot in terms of potential profit that both Steemit and your holdings of Steem could bring you. You bought at a time when Steem is incredibly undervalued in the market.
Why is Steem undervalued?
There are several reasons that Steem has a lower price and market cap than what it could have. As you know, altcoins have been in a bear market for over 2 years. This caused the price of every altcoin to fall drastically. Steem was hit particularly hard; it fell from over $8 to less than $0.10. During that time, Steem fell from inside the top 40 to around 80 in market cap ranking.
The bear market played a part in the fall in price but there were several other contributing reasons, these include:
- higher than average inflation, which was made worse by the inability to peg SBD
- lack of marketing of new developments
- Steemit’s periodic selling of Steem
- bad publicity caused by Steemit Inc laying off 70% of their staff
- bad publicity from continuous delays in development of SMTs
- the rise of bid-bots and apparent failure of proof-of-brain
- rumours of abusive behaviour and users being chased off the platform
- the looming fear of centralisation of power from Steemit’s large stake
- lack of availability on many exchanges
Why does Steem have any value at all?
All of the above are reasons why the price of Steem has fallen over the past 2 years and has a low market cap. So why do I believe Steem is undervalued? I would like to highlight a few of the reasons I believe Steem has amazing potential value, which the market is currently overlooking.
Source: State of the DApps, accessed 15/03/20202
Steem applications consistently rank highest amongst decentralised applications; only Ethereum has more applications ranked in the top 50 on State of the DApps than Steem. These DApps are successful for several reasons. These reasons include:
- the quality of the applications
- the Steem blockchain supporting these applications
- the community using these applications
- the dedication of the teams running these applications
- the diversity of these applications (i.e. social, games, mobile, photography, video, live streaming, etc)
- Steemit’s Steem delegations, which has been used to help reward and attract users
In addition to the applications, Steem has tribes and communities. Many tribes have their own user interfaces, which provide users more visibility for their content. Tribes utilise tokens running off the Steem Engine Sidechain; this creates more opportunities for users to earn from posting and curating content. Communities can be accessed directly on SteemPeak and Steemit and offers great potential especially once SMTs are released.
The Steem applications, tribes, communities and the many other tools offer so much to the user experience but are greatly undervalued by the market, as they have not received sufficient publicity and exposure.
Source: Bitcoin Exchange Guide, accessed 15/03/20202
Steem is highly ranked in the CCID Global Blockchain Technology Assessement Index. The high ranking indicates the market cap of Steem is considerably lower than what it should be. Many of the other blockchains high on this list have considerably high market caps. I also believe the applicability sub-index does not fully account for the many features of the Steem blockchain.
Steem’s most valuable asset
Steem’s greatest asset is its community; these are the people that look after the blockchain, build applications, run projects, write posts, make videos, create art, share opinions, advocate freedom of speech, and work together when needed to create a better ecosystem for all. I doubt any other blockchain has this type of community.
You have experienced firsthand the strength of this community. Most of the responses to your Tweets are from the Steem community. Your Steem posts consistently receive over 500 comments and the 2 most recent post have over a thousand comments. The community has also responded by strongly supporting their favourite witnesses.
Source: Steemian.info, accessed 16/03/20202
The witnesses that you support with Steemit mined stake are in red and highlighted in yellow. The established Steem witnesses are in blue. I would like you to take note of the number of voters. These numbers should send a clear message regarding what the community wants and are passionate about.
Coming together to address the problems
The reasons for Steem’s price fall are beginning to be addressed. The Economic Improvement Proposal (EIP) has greatly reduced bid-bot usage. The Steem Proposal System (SPS) has enabled financial support for community initiatives and projects thus reducing dependence on Steemit for development. However, we still have a long way to go. SMTs are still not complete. The unpegged SBD still creates added inflation. There is still fear that the large Steemit stake will be used to prevent decentralisation or be sold and crash the price of Steem. Steem is still not being positively marketed for its strengths. Steem is still not listed on as many exchanges as many other cryptocurrencies.
The correct use of Steemit and its resources could help solve all of the above problems.
My advice to you
Different people are on Steem for different reasons. I assume that your number one reason for buying Steem is to make money. I do not believe that many would object to that goal. The most likely way for you to make money is for the price of Steem to increase; this would also be to everyone else’s benefit. Unfortunately, you have started very badly. I don’t know all the information that was disclosed to you when you bought Steemit but it appears that you have the wrong idea regarding what you have bought. Steemit is an application on the Steem blockchain. It is a user interface for the blockchain. It enables users to engage with the Steem blockchain; this includes posting, voting, transacting, claiming rewards, staking tokens, voting for witnesses, sending memos, and several other activities. Steemit is an ideal fit for Steem as the functionality aligns almost perfectly. Steemit owns a considerable amount of Steem. This Steem was mined for several reasons such as funding development and attracting users. It was not intended to be used to centralise control of the blockchain.
Understanding what you have bought and the expectations behind it are essential to the approach you should adopt. Using the Steem stake to control witnesses or plant your own witnesses is also a bad decision. Many of the large stakeholders of Steem invested and remained invested because they believe their stake has some influence in the governance of the blockchain. If Steemit uses its stake to control witnesses, the other stakeholders or groups of stakeholders will have close to zero influence. There are also several other advantages that group consensus has over one person making all the decisions. If the Steemit stake is used to control witnesses, many will also assume the other intended purposes of the Steemit stake will not be fulfilled.
The use of the Steemit stake has not been enforced through code. This should have been done when Steem was created. Instead, the arrangement was been unofficially held in place through statements and promises. The Steem witnesses recently applied a SoftFork, which removed some functionality from Steemit accounts. To ensure past promises and agreements, the Steemit accounts containing mined Steem should not have the function to vote on witnesses. These same Steemit accounts should have different staking functionality to regular accounts. This is to prevent Steem being moved to other accounts or being sold off in bulk on exchanges. The SoftFork prevented the Steemit accounts from powering down. I believe this was a temporary measure until some form of formal agreement could be reached regarding the terms of usage of the Steemit mined stake. Placing some restrictions on the Steemit mined stake serves to the benefit of both the community and Steemit.
Coded restrictions on the Steemit mined stake is a benefit to Steemit. It is a benefit to Steemit because it is a benefit to the community and other large investors in particular. Such a move will provide investors and potential investors assurance of the decentralised nature of Steem. Any move that attracts more investors is good for the price of Steem and good for your investment.
Moving Steemit to another blockchain would be a bad decision, as no other blockchain would be able to accommodate all the features of Steemit. A Tron Steemit is likely to become a shell of the Steem Steemit. Steemit is not the only Steem user interface. SteemPeak has all the functionality of Steemit and more. If Steemit moved to Tron, the majority of Steemit users will switch to SteemPeak or another alternative Steem user interface. Steemit is valuable because of the users and the community. If Steemit is migrated to Tron, both of these will cease to exist.
My recommended actions
I recommend that you take the following the actions:
- Remove support for any of the witnesses.
- Unblock Steem users on Twitter.
- Apologise to the Steem community for spreading misinformation and jeopardising the blockchain.
- Have genuine discussions with witnesses, large stakeholders, DApp teams and other community leaders regarding the usage of the Steemit mined stake. These discussions should cover code to be applied to accounts holding this stake, allocation of stake for expenses and development, criteria for delegating Steem Power to initiatives, and the relationship between Steemit and the SPS.
- Clearly communicate with the community the decisions made based on the discussions described.
- Learn as much about Steem as possible. This should include the history of Steem and the community; the technical side of Steem; the role of witnesses, the Steem DApps, tools, tribes; the interaction between DApps and the blockchain, the SPS, etc.
- Clearly communicate your vision for Steemit.
- Clearly communicate Steemit’s plans to contribute constructively to the Steem ecosystem.
- Use your influence to get Steem onto more exchanges as well as gain more visibility through marketing and promotion of the positive attributes of the Steem ecosystem.
- Communicate frequently using Steemit or other Steem DApps and then share this communication on other social media such as Twitter.
At the moment, the divide between you and the community is massive. For you to maximise your profits, you need for Steem to grow as a decentralised platform, which is run by the community, which includes you. You could become a very valuable asset to the Steem ecosystem if you facilitate this growth with your skill set, contacts, and financial resources. I hope you take my advice seriously. There is still a chance that we can all coexist for the benefit of Steem.
HOW TO JOIN IN:
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