Over the past Month or two I've given Steem the old college try, and I was very enthusiastic about the platform after the latest hard fork, but unfortunately my business-analytical mind sees things differently. The price of Steem is insignificant, and that is not what this is about, as the Price of Steem will have at least one more bull run in the next 3-6 months if my calculations are right, and I intend to take advantage of it.
I should explain my reasoning for ditching the social media side of Steem, because I feel that Steem as a social media platform can succeed, but only under certain circumstances. It's a problem of flexibility; Steem is too rigid and unable to conform to the world it exists in, and so it must haphazardly try to mimic how the distribution of wealth works in the fiat finance system, instead of staying true to its original design philosophy.
In theory, inflation is supposed to act as a way to redistribute wealth to prevent hoarding, but true to human nature the greediest of us park themselves in front of the printing presses and absorb the inflation so that they retain their wealth, while the rest of the people (often dubbed the 99%) are forced to give the most valuable resource they have - their sweat equity - in exchange for just enough fiat money to survive and get by. The world has always worked this way to some extent, and while not fair or even rational, it's instinct to survive and dominate others that drives this primitive behavior.
Whether you believe this is right or wrong, you be the judge.
As for Steem, this platform promises investors and users an experience that strips away centralized authority and censorship, but then proceeds to do the opposite in practice. Those with excess wealth in the real world use Steem in the same manner they would a fiat currency, by parking themselves at the source of Steem's inflation and absorbing it. In this case, the source of Steem's inflation is mostly via post payouts and curation.
This is problematic for obvious reasons, and a death sentence for any long-term survival of Steem as a social media platform. Those who hold the lion's share of Steem (whales) have their fat mouths sealed tightly around the inflationary faucets of Steem, and when a new user makes a post and gets a few droplets of water, they first exclaim that they love steem, and can't wait to see their efforts blossom into a dream they thought they could never fulfill. They look at trending and see posts worth tens of Dollars and believe that they too can achieve this one day if they build an audience and produce good content that people want to consume.
But over time it dawns on a Steem user that posts at the top of trending are not there organically, and most of the posts there add no value to the platform to justify their payout. While many might not understand why this is, they intuitively know something smells off.
Steem is in effect a serpent eating it's own tail, aka the Ouroboros. The head of the serpent is comprised of the whales gobbling up the sweat equity of those on the bottom in an effort to maintain the value of their holdings, but because the inflation of the platform isn't reaching those at the bottom, there is no value in Steem for anyone, including the whales.
To be fair, it is possible to build a following and earn organic upvotes and earnings on Steem, but that is the exception that proves the general rule, and as a general rule those holding the lion's share of wealth have no interest in spreading that wealth to the poor unless there's something in it for them. This was the reasoning in part behind the most recent hard forks that adjusted curation and author rewards to be equal. The idea was that if you can motivate the whales to spread out their upvotes instead of circle-jerking and selling their upvote, then the inflation of Steem will be spread out further and those at the bottom can start getting more than bread crumbs that fall out of the whales mouths as they slobber and chew away.
Sadly, I've witnessed no change in the behavior of whales, at least where it counts. I saw increased enthusiasm from minnows, as is often the case, but Whales that sell their upvote, and Whales that give large upvotes to themselves and their friends have the exact same impact on the platform, in that the inflation gets absorbed by the whales and their friends instead of reaching new users that still believe the sales pitch of Steem. In the real world this is known as a kind of crony capitalism, where the economic risk is eliminated via quid pro quo between businesses and governing policy. Not for all businesses, just those that have no qualms about screwing over everyone else.
There is of course the argument from a developer standpoint that they have put their time and effort into building a platform for people to use, and so why shouldn't they be able to control the levers of inflation?
Good point, but irrelevant. If Steem is to behave no differently than the real world, it should be advertised as such. If you truly believe in Steem being a platform where you can avoid censorship and build DApps exactly how you want them to be, what good is that platform if you don't have any eyes on your posts, or users to migrate to your DApps?
My point is, a platform like Steem needs people, a lot of people.There needs to be large amounts of users on the platform that read and share and post. This was the only source of value for Steem until the DApp space opened up. I would say that Splinterlands (rebranded from Steem Monsters) for example is worth more in 5 minutes than Steem is in a month. I'm talking real value, as post payout is paid via the Inflation of Steem and adds no real value to the platform as a whole, and inflation/expansion of the Steem supply devalues each individual unit of Steem if the size of the user base does not grow with the inflation.
Sadly, the userbase of Steem cannot grow because the inflationary faucets have greedy whales drinking up all the inflation, and thus the social media side of Steem is prone to being mostly an illusion of wealth creation. Nobody is getting paid, really, the pie is just being divided into smaller and smaller pieces, and for most of Steem's existence the whales have been absorbing nearly all of that inflation.
The mechanism of staking, or powering up your Steem is a way to hide the inflation and keep it out of circulation, as powering up your Steem allows you to earn more Steem through curation, or through other means. Again though, this only works if Steem is constantly bringing on board new users, and retaining those users. Trying to convince Steem holders to power up their Steem only acts as a band-aid, an attempt to slow the inevitable end that all fiat currencies face. Make no mistake, Steem is a kind of fiat currency, backed by nothing more than confidence in the profitability of Steem. But like any pyramid scheme, Steem requires new wealth flowing into it from the outside, because Steem does not create new wealth on it's own. It's like a sponge; a sponge doesn't create water, it soaks it up and holds it. The more you can get people to power up their Steem, the better Steem is able to retain external wealth instead of people cashing out.
If I'm being completely honest, I think Steem (the social media side of Steem, not the DApp side) is a dumpster fire. The crypto community tends to see Steem in the same manner, having to plug their noses every time they get a whiff.
Is it too late for Steem to turn the course around and actually deliver what it promises to new users? I would like to think it can, but after a few years and repeated attempts to stop the misuse of the platform, I have strong doubts that Steem will ever be anything more than a launch pad for DApps, and I'm not upset about this at all. I bring up Splinterlands only as an example, but there are other games, apps, sites, etc attached to Steem that have real value. I can only speculate why Steem Monsters was rebranded to Splinterlands, but logic says that if Steem had any real value, then it would make more sense to keep the name Steem Monsters.
But it is really the other way around. Steem desperately needs the value that comes from these DApps, in order to add value to Steem. As I've said, there is not much value in the social media side of Steem; there simply is no market for it. The internet is saturated with websites offering censorship-free environments, and many using their own crypto. Does it matter if Steem did it first? Normally I would say yes, except that the business model of Steem has proven to be a failure without branching out to DApps and Smart Media Tokens (the latter of which is long overdue and probably antiquated by the time SMT's launch).
Please understand that this post is not about how we feel about Steem. I feel deeply about Steem because of it's potential, but I know that Steem's potential has been squandered thus far. Whether that potential is realized in the future depends on events in the real world, and whether a large enough demand will exist for what Steem purportedly offers. I'm afraid that by that time there will be better options out there. In fact, I'm afraid there already is.
For me, I will park my Steem as liquid, powering it down, and taking my profits during the next (and possibly last) bull run for Steem. It's not much, I have maybe 20K across multiple accounts and through staking, but its a small portion of my portfolio overall. Steem is a fun investment, something interactive to be a part of. Now that I've had time to watch Steem operate from a business angle, and to analyze where (if any) value exists on the platform, I have my answers and must act on the same instinct that drives the whales on Steem to destroy the very thing they bought into. Ironic really.
There is a place for centralization, and there is a place for decentralization. I think Steem is a great idea, and the currency itself has a very bright future in my opinion, but not for social media. It's too volatile, manipulated and at the same time too inflexible for big content creators to consider. Youtube is a flaming mess, so 3speak is definitely in the right place at the right time, and I am stoked to see how they do in the long term. Steempeak is a nice robust site that makes steemit.com look like a first year programming student wrote it. So much potential everywhere, yet I see that the base platform of Steem is an illusion that relies on market bull runs to attract and retain new users.
Anyway, I'm going in circles now, and if anyone actually reads this I'm sure there will be people that disagree. On a sentimental level I disagree with much of what I just wrote, but I'm hard-wired from years of operating business and studying trends to peel back the layers of sentiment and examine the engine underneath the hood, so to speak.
For those who hold onto their Steem long term, you will be glad you did. I'm likely going to keep a few thousand Steem powered up because there are big things coming, but I can't justify losing tens of thousands of dollars of potential profit on the hopes that human nature will change in the short term, because it won't.
As always, thanks for reading. Please stay safe, keep your head up, and take care of those closest to you. Tell them you love them (if you do), and don't get too greedy - greed is your worst enemy.