Potential Scam
Some market observers expressed their concerns that steem in and of itself might be either a pump and dump scam or a Ponzi scheme.
"My first impression is that it is a 'pump and dump' crypto where accumulators (founders, early adopters) will be looking to cash out on a major pump in price (distribution),” stated Petar Zivkovski, director of operations for full-service bitcoin trading platform Whaleclub. "Whether it survives longer term remains to be proven."
Kong Gao, overseas marketing manager for bitcoin trader Richfund, provided similar concerns about steem. "Most of the articles on Steemit are promoting steem, which makes it seem like a variation of a Ponzi [scheme]. Furthermore, it is the same group of people behind Bitshares." As a result, "I don’t think it is sustainable and I don't take it seriously. I've also spoken with a couple of serious altcoin traders in China” and they have their doubts as well.
Eliosoff reiterated Gao's point that steem might be a Ponzi scheme, predicting that the digital currency "will grow and grow until there are no fresh users to suck in and then quickly collapse," a situation he described as being "the Ponzi way."
