I've been using Steem for some time now and can already see how the system, while having a lot of potential, has life threatening issues that need resolution:
1. Reward for Effort Not Content: Seems people get rewarded for effort. If a post is long, with pictures, nice format, it gets upvotes. This makes sense, because as early adopters most people here appreciate the community an want to support bloggers who put effort into their work. But a real libertarian system will reward content and value, not necessarily effort, in the long term.
2. Posts Are Too Long: Due to 2) above, posts tend to be long and long-winded. Again, showing effort and perceived content value as opposed to intrinsic value. Winston Churchill has plenty to be famous for, one thing of which was his ability to synthesize tons of wisdom in a single sentence. Lengthy posts may be useful now, but for Steem to become mainstream it has to be able to cater to the broader population, which has short attention span. We already are seeing this, with posts that have pictures generally doing better than text.
3. System Subject to the Greater Fool Theory: I made this experiment https://steemit.com/post/@izzy/make-history-now-how-to-get-steem-to-the-limit-in-one-single-step . While it has not been successful so far, it does illustrate a potential issue with a system that rewards curators -- to be frank I am still not sure if an upvoter gets paid forever as long as the post keeps getting more popular, or just gets a one time payment. But if the former is true, it can create an incentive where people upvote a post only because they believe others will do too, not because they necessarily enjoy the content or benefit from it in another way.
This issue is exacerbated by the lack of automatic suggestions that can point reader to related posts based on what they are reading now. Thus, the trending posts get even more trending, while some good posts that may be useful get forgotten.
4. Useless Posts Incentive: All of the above incentivize quantity not quality. Not sure why, but seems any post will generate some Steem at this point, i.e. authors get rewarded for useless posts. I have some some great posts, but there is also a lot of useless crap, plagiarism, copy paste, etc. Even this very post's main purpose is to "test" the platform, not necessarily to provide earth shattering insight. Not sure if this is a temporary issue and the system will self correct. Or if maybe a downvote button is necessary to help correct the market. On this one we will have to wait and see.
5. Clickbait: Did you notice the title? I used the all to common click bait strategy of "10 things you have to do ... " etc. Direct compensation for posts increases incentive for clickbait.
