So recently I had a debate with one of my family members. He loves crypto and is heavily invested in bitcoin, EOS, and some Ethereum. He loves the steemit platform and thinks its a great idea, but he thinks its VERY overvalued. He thinks its a bubble and once there's a major sell off the coin will die. Heres why
So I asked him why he thought it was overvalued and he answered my question with two questions. "Whats the product?" and "Why would someone invest in steem" (He already knew the answers, but wanted to hear my standpoint). I told him that we have the only social media that pays users for their content. In addition we also have ICOs and SMTs on the way.
His standpoint is that most content creation websites aren't worth much. Reddit in particular ( A website very comparable to steemit) is not worth much(At least according to him). He gave reddit a 20 million evaluation based on the fact that their website has always been in the red and has never been able to monetize effectively. Of course, I believe that steemit is worth more than reddit.
So the debate continued. I said, "forget about the website, we also have value in our ICOs, SMTs, and even just as a digital currency." Well, he said that our ICOs are cool but were late to the party. Other coins like EOS already are effective and can do what we will be able to do AND they are focused. Steemit is like a swiss army knife, being able to do everything is both an advantage and a disadvantage. While we may be able to have better ICOs functions for better or worse the steem token will always be tied to the steemit website. (At least in peoples heads) We will be known as the reddit of crypto not a competitor to Ethereum and other ICO coins. Just like a swiss army knife is known as a knife not a tooth pick.
Well, what about SMTs I asked. Surely they bring value. Once I had explained the concept completely (He hadn't done enough research to understand them fully) he said that SMTs bring less value to the steemit blockchain than we think. Like @ned, I used the example of New York Times. I told him about how websites like New York Times will have to lock up large amounts of steem to be able to use the SMT platform. He then crushed my point by then pointing out that New York Times just recently sold for a dollar. That's right, I couldn't believe it either but sure enough, I looked it up and he was right. Websites like New York Times are struggling and some have millions in liabilities. Some described the sale as a “sign of perilous times” for newspapers and the people who run them.
So the debate continued. I pointed out that steem has value just as a currency alone. We have 3-second transactions and zero fees (all thanks to the witness system). Well he believes that if you can't cash out whenever you like (We can't since most of us are holding steempower) then its not a real currency. While I don't totally agree, I can see his point.
So is he right? Well, I sure hope not! The truth is for steem to drop significantly in value there would have to be a major sell-off. Lucky for us, most steem is in steem power and held my VERY loyal investors. Let's just hope that these investors don't decide to cash out soon. Anyways, he made a bet that if I'm right in a couple years he'll buy me a full Whataburger meal (A favourite fast food joint of Texans) I laughed and agreed.
So what do you guys think? Is he right? Am I right? Or maybe we're both wrong! Let me know in the comments below.
Let me know if you resteem ;)
- @edolo