Steemit is a blogging and social networking website that uses its Steem blockchain-based rewards platform for publishers.[2] The Steem blockchain produces Steem and Steem Dollars which are tradable tokens obtained for posting, discovering, and commenting on content.[3]
Steemit, Inc. is a privately held company based in New York City and headquartered in Virginia. The company was founded by Ned Scott, and Dan Larimer, creator of BitShares, and EOS.[4][5]User accounts can upvote posts and comments similar to other blogging websites or social news websites like Reddit, and the authors who get upvoted can receive a monetary reward in a cryptocurrency token named Steem and US dollar-pegged tokens called Steem Dollars. People are also rewarded for curating (discovering) popular content. Curating involves voting comments and post submissions. Vote strength and curation rewards are influenced by the amount of Steem Power held by the voter.[6]
Steemit includes third-party applications, such as d.tube, a decentralized video platform based on the InterPlanetary File System (IPFS) protocol. D.tube is similar to YouTube, but without advertisements, instead uses the built-in Steem currency which gets awarded by users upvoting videos.[7]
Monetary system
Steem is based on the Smart Media Tokens (SMT) protocol, developed by Steemit. As of December 2017, CoinMarketCap.com listed Steem with a $475 million market capitalization, and ranked Steem tokens 32nd of 1,358 cryptocurrencies. User actions such as upvoting facilitate Steem's Proof-of-Brain algorithm, which also factors in the Steem Power a user holds, to provide incentives for content creators and the community by transferring small amounts of the Steem token currency.[6]
Steem began with a highly inflationary supply model, doubling roughly every year.[5]
On July 4, 2016, Steemit, Inc. launched Steemit, a social media platform with virtual currency rewards that runs over the Steem blockchain. On July 14, 2016, Steemit announced on their website that they were hacked. The attack, according to them, has compromised about 260 accounts. A little less than US$ 85,000 worth of Steem Dollars and Steem are reported to have been taken by the attackers.[8]
Unlike most digital currencies which are difficult to access for the majority of the world without any money to invest, Steem removes the friction for the average person to join in the cryptocurrency world by allowing earnings via posting without needing to buy in first.[9]
Criticism
Joe Lee, co-founder and CIO of digital currency trading platform Magnr, told CoinDesk, "Whether Steem succeeds as a digital currency will be more a reflection of Steemit’s success as a platform as opposed to the economics of the coin itself. This is a good example of a digital currency whose value will be closely affiliated to its utilitarian value as a social networking and sharing platform."[10]
"I'm skeptical about 'appcoins'/'appchains,' and Steem is very much one," stated algorithmic trader Jacob Eliosoff.[10]
