I often see posts here talking about how undervalued STEEM is and how it will go to $10+ within the next 6 months to a year. But I never really see any clear explanation as to WHY or HOW that will happen. It won’t just happen because we all want it to.
The market cap of STEEM is currently about $250M, so to get to $10 / STEEM the market cap would need to go to $2.5B. It will take a LOT of money coming in to make that happen. Money is flooding into Bitcoin and a lot of altcoins at this point due simply to speculation and FOMO of future price increases. There may be some of that in STEEM but I don’t think we should count on that to bring us to a $2.5B market cap.
Steem is the World's Advertising Network
The primary way that money will come into STEEM will be from advertising. Yes, you heard me right - advertising. You may think that Steem is supposed to be an ad-free zone, but that’s not at all the case. Steem is built and meant to be the world’s advertising network! Don’t take my word for it though, take @ned’s word for it. Check out the below video starting at around the 5:30 minute mark:
Why do we want ads on Steem?
The thing that differentiates Steem from other content publishing services is not that it will have no ads, it’s that the money spent on the ads don’t go to a central company - they go to the content publishers and STEEM holders through increase in the value of the STEEM token. That is, they go to us!
So what’s going on, where is all the ad money coming in? Right now the only money coming in is small people like me buying some SP and SBD to promote our posts, but to get to $2.5B we will need a lot more than that. I think the biggest thing holding the Steem platform back from starting to bring in serious advertising dollars is that Steem is currently synonymous with SteemIt.com.
No serious advertisers that I know of would want to advertise on SteemIt.com. Advertisers are usually very, very conscious about their brand and would never put it up alongside all of the questionable content here. This is where the SMTs and communities will come in.
SMTs and Communities to the Rescue!
SMTs will allow new sites to be built on top of Steem with their own token and focus on specific topics or communities, vs SteemIt which is just a hodgepodge of anything and everything. This way advertisers who want to target that specific audience can buy the SMTs, which brings money into the Steem platform, and know that their ads will only show alongside the content that they want for their brand.
One good example that’s live right now and which I’m very excited about is Utopian.io. Utopian is a steem-based site which focuses specifically on open-source project contributions. If this becomes successful and attracts a large group of open source devs, then it will be a great place for advertisers who want to target that demographic.
For STEEM to go to $10+ we’re going to need a lot more sites like Utopian for a lot of other topics and communities and they’re going to need to be popular and bring in advertising. So if you have any ideas for such a site - build it, and then go after advertising dollars!
We will get there...
The SteemIt, Inc. team is definitely going in the right direction with SMTs and community features. They also need to focus on the development side of things - making it as easy as possible for developers to launch new sites on top of the Steem blockchain. SteemConnect is a good start, but I’ve been trying to use it recently for some projects I’m working on and it has a long way to go in terms of developer-friendliness, polish, and documentation.
But I think we will get there, that’s why I’ve invested so much of my own money in STEEM and plan to invest more in the future. Let me know your thoughts in the comments!