Steem protocol is a social blockchain network that rewards its users for uploading various contents. The social blockchain network is responsible for facilitating social media apps like the Steemit blogging site. Steem allows every user to become a stakeholder on the platform and distribute rewards based on their contributions.
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Steemit Inc was established by software engineer Dan Larimer and financial analyst Ned Scott in 2016. After its launch, Steem protocol was immediately developed to serve its clients making it the first app to take off on the Steem blockchain. However, the partnership between Scott and Larimer wasn’t strong enough to last as Larimer left the organization in 2017.
How Steem works
Steem employs an operational model of one-Steem, one-vote which enables users with significant contributions within the platform to influence how contributions are evaluated.
Steem also makes available additional features like escrow services, stolen account recovery, savings accounts, and a reputation system to better serve its clients. The Steem blockchain is modeled to be efficient, and fast offering the support needed for the huge amount of traffic predicted of a popular social media platform.
It provides free transactions and three-second confirmation times to users. Presently, Steem has surpassed bitcoin in terms of several transactions and can still improve to support over 10,000 transactions per second.
Steem coin is the native token running on the Steem blockchain. Web application developers can build Smart Media Tokens (SMTs) as original digital assets to create incentives for users. These incentives then motivate users to participate in the platform which in turn fosters its growth.
The protocol operates a rewards pool of tokens to incentivize the creation of content as well as its duration. There’s also a system of voting that allows members of the community to evaluate the value of each content and help distribute tokens.
Stream calls this approach ‘proof-of-brain’ a term synonymous with the concept of ‘proof-of-work’ used by other blockchains to verify transactions. The ‘proof-of-brain’ approach helps to reiterate that human effort is needed to distribute tokens to every member of the community.
Steem has positioned itself with the ‘proof-of-brain’ approach as a tool used for establishing an ever-growing community. This has encouraged members to add quality to the community via the reward structure put in place.
Steem tokens are produced at a constant rate, a single block every three seconds. According to steel, the rate at which new tokens are produced was pegged to 9.5% each year since December 2016. The production rate will decrease at the rate of 0.5% every year or about 0.01% for every 250,000 blocks. This inflation will gradually continue until it gets to 0.95% which will take approximately 20 years.
For every new token produced each year by the Steem blockchain;
- 10% are allocated to block producers within Steem’s DPoS consensus protocol and to Witnesses.
- 15% are allocated to converter content curators
- 75% are allocated to the content curators and content creators in the reward pool
Is Steem a good investment?
Steem currently trades within the price range of $0.45 and ranks 352 on the list of biggest cryptocurrencies in terms of market cap. With a circulating supply of more than 300,000,000 tokens, Steem has experienced a daily transaction volume of over $24,000,000.
Steem seems to be getting positive price predictions from various analysts to come 2022 and the year beyond. A good sign we must say especially when the entire crypto market is just recovering from a downward trend.
Wallet CryptoGround also made some positive predictions saying Steem could trade around $1.02 by 2022. However, CryptoGround expects the price to fall before picking up again and climb up to $3.69 come 2023 and a new all-time high of $5.66 by 2025.
That being said, if you’re considering buying Steem for long-term investment, you will be making the right decision. Steem presently trading at $0.45 presents a great opportunity to invest now.
Undoubtedly Steem has an excellent use case in the real world, an indication that it passes the test of time. If you have the patience, investing in Steem is definitely the right call.
However, you shouldn’t rely on the predictions made by these experts. The crypto market is highly volatile and speculative and rarely follows these predictions.