In July of this year I found out about Steemit. I went from knowing nothing about it to making $15,000 in one day (now worth about $1,500!) to becoming a big believer in the potential of the platform.
Up to now I have only been an evangelist for the platform and currency in terms of its ability to make people money for contributing to the platform in the form of writing. And, numerous people I know, who I introduced to the site, have made thousands of dollars by posting on Steemit. These include @larkenrose (#3 in followers), @lukewearechange (#10), @dragonanarchist (#20), @falkvinge (#27) and literally hundreds more.
What I have yet to be, until today, is a promoter of actually purchasing Steem, the cryptocurrency, as a speculative investment.
When I first got into Steemit, Steem was trading at over $2 per coin/share and had a market capitalization of nearly $400 million. For something so new I was shocked at the high valuation. I've been an entrepreneur and investor in internet technologies since 1993, though, so seeing ludicrous valuations is more the norm than the exception, so I sat back and watched to see if it could sustain at that level.
It didn't!
As of today Steem is currently trading at near $0.30 with a total market cap of $54 million.
I have been powering up nearly all of the Steem dollars I've earned since July as I said it was an investment in the platform, as well as to show my commitment to it. If I hadn't, and just held the Steem dollars, I would have over $200,000 today. Instead I have Steem Power worth about $30,000.
That's a loss, on paper, of $170,000! But, as I said, I've been an investor in new web technologies for decades... that is completely normal... you usually either win big or lose big when speculating in new ventures.
However, here's the thing. I still think Steem can be absolutely massive. So much so that I still continue to power up nearly all Steem I earn on the site.
And, with a market capitalization, now, of a much more reasonable $55 million, I think the time may be close to actually look at purchasing Steem Power as a very viable speculative investment.
Here's my reasoning.
THE CASE FOR STEEM
Steemit.com, itself, is still in beta and, even by internet standards, still in its infancy. And, its growth has been very fast to date (and I expect that will only speed up). Thousands of developers and entrepreneurs are already building new technologies and applications on top of the platform... mainly because the platform is designed in such a way to incentivize people to do so. Very few other platforms pay people to develop for it in such an ingenious way.
Plus, Steemit hasn't even come close to hitting the mainstream yet. Hardly anyone in the mainstream even knows what bitcoin is yet, but they will... and the same can be said for Steem in the next few years.
And, once the mainstream catches on that there is something that is better than Reddit, Facebook or Twitter and they can earn money just by being on it, I think we could see a massive adoption unlike anything we've seen in recent history.
Once that happens then venture capital investors may be wondering how they can profit. After all, if the buzz 6-12 months from now, is that Steem is a FB/Twitter killer and has tens of millions of users and is rising fast, everyone will be looking for how they can get a piece of the action.
The only way, of course, is to purchase Steem. And, the only way to ensure your Steem investment maintains its value is to power it up to Steem Power (with a total hold period of 2 years).
If Steemit begins to get that kind of buzz, venture investors will look at the Steem market cap, and if it is still in the range of $50 million or less, we could see a buying flurry.
After all, Facebook currently has a market cap of nearly $400 billion. So, if people start hearing that Steemit can be a FB killer, they'll look at its market cap and realize Steem is currently at 0.013% of the value of Facebook and easily take a punt on it (aka a speculative bet).
If this were to happen, and it is completely within the realm of possibility, a Steem market cap of $1 billion, a year from now, is not at all out of the question. And, if things go really crazy (which paradigm shifting technologies usually do), who knows, $10 billion or more.
By that point, Steem would have tens of thousands of developers working on it, coming out with new services and applications on a regular basis.
The site would be attracting tens, if not hundreds of millions of users, and that would attract advertisers (who would use the promote function to target their audience) and only further the buzz.
RISE OF THE BLOCKCHAIN
In the last few years, billions of dollars have been invested into blockchain related companies by venture capital investors. In other words, blockchain is no longer that "obscure" thing that hardly anyone but cryptogeeks and anarcho-capitalists know anything about.
And, because of that, something like Steem is not completely alien to a growing base of investors. It's all very reminiscent to me of the internet around 1996... hardly anyone really knew what it was... but a growing group of savvy speculators and investors were betting big.
Then, a few years later, the public found out about internet stocks and they went vertical.
Aside from bitcoin, ethereum, maidsafe and a few others, what other cryptos have the potential to capture the imagination of a large swathe of people? In fact, which crypto has the potential to become an even bigger name than any of them in the public's mind? Only Steem, in my opinion... because everyone can and could be using Steem related platforms as part of their daily life in the very near future.
For this reason, for speculative investors, I now think it is time to start looking at Steem as a speculative investment. Of course, that comes with all of the caveats of speculative investments... in other words, it could go to $0. It could also go to $10 billion or higher.
And, for current Steem users, who are earning Steem from their posts on Steemit, if you have no immediate use for the money and wish to contribute to the platform to see it grow, I suggest, at the very least, consider taking 50% of your Steem payout in Steem and the other 50% in Steem dollars and powering up the Steem.
It could turn out to be the investment of the decade... or it could turn out to be a total loss. But, you will be a part of trying to create something special in the process.
I promoted bitcoin at $3 in 2011 (currently over $600) and ethereum around $0.80 in January (currently over $11)... and I am going on record today saying that Steem is a buy at these levels ($0.30).
It could still go lower, and could go to zero, but I think the risk/reward for speculative investors is now tilted heavily towards reward.
STEEMFEST
If you are an investor and seriously interested in seeing what is happening in this ecosystem, then coming to Steemfest (click here for more) in November in Amsterdam is a must attend event. I'll be there and one of the top speakers but I'll mostly be going to get a real feel for what type of community of developers and contributors is developing.
<<Please vote for our Steem witness (click here) at tdv.witness, where we are already developing new technologies for the Steem platform including Steem Trail and a soon-to-come Wordpress Plug-in that could see Steem content easily integrated on every major website in the world>>
