I figured it would be a good time to make a post on Steem with some thoughts and facts on it for anyone in the r/cryptocurrency subreddit who may have bought the bottom or FOMO'd in recently and would maybe like to do something else with it than keep it liquid on the exchange. So I wrote this and posted it in the subreddit but figured I'd share it here as well. Feel free to go over to the post on Reddit and share more of your thoughts or things I may have missed that you feel other investors/traders should know about it.
Anyway, this is what I wrote:
With the recent increase in price and many here maybe holding onto it or having FOMO'd in recently I figured I'd write a post with some info about Steem and what else you can do with it than just hodling on exchanges (which kind of penalizes you as there's ongoing inflation).
So this is more for you long term holders/traders who might feel safer holding Steem in your wallets instead of exchanges. Also this info is written off the top of my head of what I think might interest you, to find out more about Steem and things I may not mention here check out the Steemit FAQ page, although some stuff may be outdated there as the chain is in constant development.
Account creation and keys
Steemit.com, the flagship front-end of the Steem blockchain offers free accounts, to avoid abuse of account creation they ask you for phone number and email. There are alternatives though such as https://anon.steem.network/ and users with stake (Steem Power) can claim accounts through the new resource credit system in place which they can use to create accounts for others through websites such as steemworld.org or steeminvite.com. The main difference between creating your account through Steemit.com and steeminvite.com is that the former offers account recovery if your master key gets copied/hacked, where you then can use your email you signed up with to verify you're the original creator and get your key reset. Losing your key, though, means no one will be able to help you, much like with any other cryptocurrency address. My advice when you create your account is that you store your master and owner key off-line and only have easy access to your posting key (used for voting, posting, commenting, following, etc) and active key (used for STEEM transfers, delegations, power ups/downs). If any of these two keys get copied/stolen/hacked you can use your off-line stored keys to change them to lock out the hacker. To make holding liquid STEEM even safer on your account there is a "savings" feature which takes up to 3 days to move your stored liquid STEEM back to your wallet. This gives you time to reset keys in case a hacker attempts to do this and to avoid your liquid STEEM getting stolen instantly.
Steem ecosystem and economic improvement
Anyway, enough about keys, let's get into the specifics of Steem. It's delegated proof of stake where text based content is immutably stored on the chain. When you write a post/comment you can allocate rewards from the inflation pool and they have 7 days to reach consensus on how much rewards the post should make before they are paid out. Since a recent Hardfork you can edit posts and comments even after payout but the original one will always be traceable on the chain, hence be careful not to post something you don't want to be on the chain forever.
Other things you should know about Steem is that there are witnesses/block producers that are scheduled for signing blocks in accordance with the stake supporting them, they receive about 10% of Steem's new inflation for keeping the chain running. Another 10% now goes to the @steem.dao which works similar to witness voting where you use stake to vote up proposals created by anyone who is looking into funding for projects. Of course something that's in the best interest of the Steem ecosystem and having some reputation helps getting funded.
Steem had a linear reward curve for 2 years which brought the rise of "bid bots" where stakholders were selling their votes, since hardfork 22 a few months ago the whole economy has changed and bid bots are now frowned upon and seldom used, here is why:
The new Economic Improvement Proposal (EIP) added a separate downvote mana pool up to 25% of your usual upvote mana to be used for overrewarded content. In the past barely anyone used their downvotes as it cost them upvote mana which meant curation rewards/steem inflation. This addition disencintivized many to use bid bots on garbage posts as the ROI was not there anymore when downvotes followed. Now users either buy votes when they really want a post on the Trending list or if they believe the quality will perform well and not cause many downvotes to occur. Along with this change curation and post rewards are now 50/50 from the previous 25/75 and there is a new curve that incentivizes higher rewards if more voting stake lands on specific posts. This makes "hidden" low reward farming get taxed and those posts that get more rewards often land in the vicinity of others to determine if they agree with the rewards or not. This has effectively brought an end to a lot of leeching/leakage of "free rewards".
Content discovery and curation has never been better on Steem than it is today. Most previous bid bots are now curating along with other curation projects effectively trying to find good quality posts that have not received a lot of rewards. They then promote them to other stakeholders/their followers as they get compensated for it with higher curation rewards for having cast their votes early/first on the posts. I run a curation project personally as well and I can tell you it's not easy finding under-rewarded quality content anymore.
Communities is something that has been planned for Steem for a long time and is now finally available on the beta page. Anyone can create their own immutable communities (think similar to subreddits). On top of that Smart Media Tokens are now on the testnet to be deployed in the next hardfork, along with possibly a shortened timer for power downs (unstaking your Steem Power back into liquid STEEM) from 13 weeks down to 4.
I'm gonna try and keep this short even though as someone who's been involved with Steem in the past 3.5 years it really is not easy as even at a 98% price decline from the top so much is happening on the chain constantly and still so many people involved.
Pros and Cons
Pros of Steem:
The DAO is new and with a higher marketcap of STEEM could help fund a lot of things, including development of the chain as to not only rely on Steemit Inc in the future.
Inflation is now down and the swings in prices have caused for much better distribution. Inflation is set to decrease 0.5% per year until a constant 0.95% in ~17 years at around 800 million STEEM in existence.
Easy way to get an account, will become even easier in the future with "guest accounts/light accounts" and with many front-ends and projects also offering temporary accounts so users can "earn their account" through being active. Low account cost of only 3 STEEM or being able to claim a free account once every 5 days as long as you have around 7k Steem Power staked.
Easy introduction to blockchain technology for non-crypto folks. Many are already familiar with Reddit so the jump into Steem is easy for those not caring about the specifics but just wanting to blog, share, interact, etc.
Better user retention rate due to the new economic improvements. Voting is less selfish, those attempting to increase their ROI through constant self-voting/vote-trading get penalized by downvotes from the community. Many have stopped attempting though as it's not worth it considering doing good/early curation is more rewarding and they realize it helps the ecosystem by empowering proof of brain and content discovery. Along with that, distribution has improved drastically as a lot of stake is actively curating or delegating to curation projects that take a cut of the rewards for their work.
Steem is a great application specific blockchain that realizes not everything needs to be decentralized for it to work. For the lack of smart contracts it makes up for it with a very scalable chain which is catering to all kinds of dapps. If you prefer smart contracts there's nothing stopping you from creating a side-chain that uses Steem to validate the code, the same way steem-engine.com does. Steem Engine has already started creating a lot of smart tokens, including NFT's.
Steem has had the advantage of being one of the first to move into the social media aspect of blockchains but with first mover advantage comes also first mover cost where everything is still so experimental and every move you make wrong. There is always someone to fork the code and start their own project stating how "they will do things right". Many have attempted and forked Steem but any have yet to pose a real threat.
Cons of Steem:
Steemit Inc being the main developer of the blockchain; although they have made sure it will scale well many functions such as Communities and SMT's were delayed by a lot due to the harsh bear market and corporate operational issues.
Early hyperinflation caused very bad distribution and the initial 2 year powerdown lock up caused many not to invest in Steem. On top of that, some early miners who found out about Steem managed to get a lot of stake early on. That includes Steemit Inc itself, which engineered itself to be the prime miner with the majority of mined stake. With hyperinflation, it didn't help.
Dan Larimer being involved early on and his reputation.
Steem is a really cool experiment that survived the bear market and kept on building. Social Media needs a certain amount of users that know someone in their circle who are on there to really pop but with a robust blockchain that is ready to scale and maintain it's userbase with a very high TPS throughput I am confident the future of Steem is bright and the protocol will only keep improving over time.
PS! We also have a subreddit where we post some news now and then if you wanna stay up to date with Steem: /r/steemit although not much happens there since most Steemians prefer Steem rewards over Reddit karma. :P
You can request for some free Steem accounts through steeminvite.com in the subreddit as well, check one of the pinned posts.