That chart looks like the price of Steem doesn't it?
Well, its not.
That last red candle on the right is the price of Bitcoin when I launched BitInstant. Bitcoin had just hit an all time high of $36 and then crashed to $1.75. It was at $1.75 when I asked my mom for a $10,000 loan to start BitInstant.
Look at the price in the background of the picture below:
Over the next few years, we all know what happened to the Bitcoin price. Price goes up, everyone is happy, price go down and everyone is sad. Price levels out and everyone is bored.
However over time, we need to keep perspective.
Look at what happened to the price of Bitcoin over the next few years.
Now lets look at the current price of Steem. Currently trading at $0.55 or so, after hitting an all time high of around $4.0. I started buying, accumulating and powering up between $0.75 - $0.50, the same strategy I did with Bitcoin.
This is the current chart of the price of Steem. Scary, no?
If you answered yes to that, so did I. Seeing this chart our emotion takes over and leads us to think that Steem is on its way down, so lets think rationally for a second. Don't these two charts look oddly familiar? Steem has over 95,000 accounts at time of writing and traffic has exploded on sites like Steemit. Trading volume is over 500 BTC a day and price has hit support bottoms.
The other day I had a conversation with a self professed "Bitcoin Maximalist", basically someone who thinks Bitcoin is the only way and everything else is a scam.
His argument comes down to "Bitcoin can do it, why do you need another coin?"
My answer to him was that there is no reason other blockchains can't exist that do things differently or better. As Bitcoin.com says "Decentralized social media has been a goal for Bitcoin entrepreneurs for years now. However, the most successful project to date actually has nothing to do with Bitcoin — other than that it uses a blockchain-based cryptocurrency to monetize content."
We forget that all of these new projects, including Steem take their roots from Bitcoin. The Internet we use today, is not the same Internet of a two decades ago. Additionally, if you look at all of the trading pairs, you rarely see USD. Its BTC. All of the new crypto coins and digital software tokens trade on a BTC pair.
So whats next for Steem?
I believe we need more buying pressure for Steem and less volatitlity. There are two ways this can be done:
1- We need markets where Steem/SBD can be used exclusively. This will require people to use, hold, and transaction in Steem and SBD.
2- We need a separation of retail and speculative buying and selling.
Focusing on #2 in this article, I believe we need to separate retail purchases and sales of Steem (Under $1000) and trading.
Right now, the cheapest and fastest way to buy and sell Steem and SBD are on Poloniex and Bittrex. Blocktrades and ShapeShift also offer retail services, but its in and out of Bitcoin.
If Steem is going to appeal to non techies, we need solid on and off ramps to traditional currencies.
When we launched BitInstant, the only way to buy Bitcoin was on exchanges. Over the next year, we were doing 30% of all purchasing and sales at an average ticket size of $300. Most people don't want to use exchanges nor do they know how. If we remove retail purchases from exchange, we will see less volatility and more healthy growth.
There are many people working on #1, but I don't know of many working on #2.
This is what I will be doing over the next few weeks.
What do you think?
-Charlie
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