<h2><br /></h2>
<h2><center><img src="https://i.imgsafe.org/f5c24308d2.png" /></center></h2>
<h2>The Problem with Most Cryptocurrencies</h2>
<p>The big problem with most cryptocurrencies is that they are merely vehicles for speculation. Indeed in many ways one could descrie them as a &quot;solution looking for a problem&quot;.</p>
<p>There is little to no real world use for them and I say this as someone who is a strong supporter of cryptocurrencies since 2013.</p>
<p>Even bitcoin itself is used mostly for speculation. Whilst many people would like to think of bitcoin like digital money it is in many ways more similar to a commodity.</p>
<h2>Why STEEM is different</h2>
<p>There have been many cryptocurrencies that have promised all sorts of uses.  Some have been very small scale niche uses others have been very grand.  Ultimately none have delivered in the utitility stakes - many have ended up being labelled as vapourware or, perhaps more cynical observers have suggested there was never any plan to deliver on the use cases.  It was merely a clever way to a pump the coin before the developers moved on to their next pump and dump scheme.</p>
<p>STEEM is different.  It is the FIRST cryptocurrency to deliver on the promise of REAL WORLD utility.</p>
<p>STEEM has STEEMIT. This is the killer app and the use case that could ultimately propel it beyond even where Bitcoin is today.</p>
<p><img src="https://i.imgsafe.org/f60cf55408.jpg" /></p>
<h2>STEEMIT means STEEM has NO barrier to entry</h2>
<p>Have you ever tried explaining cryptocurrency to a &quot;regular person&quot;?  It's not easy.  It is often even harder for someone who doesn't already have some cryptocurrency like BTC to then go and buy it for the very first time.</p>
<p>In contrast to cryptocurrency most people know exactly what blogging is and they most certainly know what social network platforms are.</p>
<p>It is estimated that Facebook has over 1.1 billion users and by 2018 there will be 2.55 billion social network users (source).</p>
<p>The beauty of STEEMIT is that people don't even need to know anything about cryptocurrencies to start using it - it uses the &quot;killer app&quot; to hook them in and start using and creating demand for STEEM before they even know what STEEM is.  It is easier than setting up a bank account and they can start earning money immediately.</p>
<p>If they later go on to learn more about the inner workings then GREAT. If they don't it doesn't really matter because they are making use of it all anyway. Very clever.</p>
<p>Contrast this with the experience that you may have had trying to buy Bitcoins for the first time.</p>
<h2>But it gets EVEN better</h2>
<p>Speculation can in some ways be the enemy of utility. It leads to volatility which makes it a lot harder for people to calculate prices and how much they have to spend. It also discourages long term investment. STEEM deals with this with high inflation - <em>yes that's right high inflation</em>.</p>
<h2><img src="https://i.imgsafe.org/f5c271f772.jpg" /></h2>
<h2>Isn't inflation a BAD thing?</h2>
<p>Not always. In this case the high inflation of STEEM is used to encourage people to convert it (power-up) to STEEM POWER (SP) - this is the long term version of STEEM that also grants people voting influence on the STEEMIT platform.</p>
<h2><img src="https://i.imgsafe.org/e708a5afba.jpg" /></h2>
<h2>SP vs SBD vs STEEM</h2>
<p>SP grows over time and it can't be sold on exchanges. It can only be sold after being converted back into STEEM which is a long process that occurs weekly over a period of 2 years (called powering down).</p>
<p>The majority of the inflation in the system occurs within STEEM putting pressure on people to either sell or convert to SP.</p>
<p>This helps to reduce hoarding, increases use and also promotes long term investment into STEEMIT. In the long term this should prevent the price of STEEM rising out of control and reduce the price disadvantage to latecomers.</p>
<p>I haven't mentioned Steem Dollars (SBD) yet. Posts on Steemit are rewarded in 50% SD and 50%SP. SBD are used as a mechanism to help anchor or &quot;peg&quot; Steem to value of the US dollar.</p>
<p>I think most people would agree that the design of the whole Steem/Steemit system is ingenious.  The full details of the system are beyond the scope of this article but if you would like to learn more please read the <a href="https://steem.io/SteemWhitePaper.pdf" rel="noopener">STEEM Whitepaper</a>.</p>
<p>My ultimate take home message - <strong>STEEMIT is the killer app that makes STEEM viable.</strong></p>
<p><em>[Images are Public Domain and taken from Wikepedia (apart from STEEM logo).]</em></p>
<p><em>@ned @dan @dantheman</em></p>