<p>It may seem unfair to compare Steem to Ethereum. The second largest altcoin by market capitalization and the second-oldest currently traded altcoin, Ethereum is the dollar to bitcoin's gold. Ethereum has positioned itself to be bitcoin's successor and heir to the throne.</p>

<p>Despite this, Ethereum has been seen as representing the "creators first" method of revenue distribution, where the founders and creators of the sites and services receive all the benefits of viewers' viewership and stewardship. This is the model that Steem seeks to disrupt.&nbsp;</p>

<p>However, with the introduction of <a href="https://techcrunch.com/2018/03/05/hexel-lets-you-create-an-ethereum-token-for-your-community/">Hexel</a>, an ERC-20 startup that seeks to use Ethers as a reward token, Steem may be facing true competition from the Ethereum camp.</p>

<p><center><img src="https://www.mediashower.com/img/52A61B5C-1211-11E8-B3CD-C0660EF2EB34/leather-3080553_1920(1)_600x.jpg" style="width: 600px;" class="fr-fil fr-dib"></center></p>

<h2>Tales of the Tape</h2>

<table>
	<tbody>
		<tr>
			<td width="33.333333333333336%">
				<br>
			</td>
			<td width="33.333333333333336%"><strong><a href="https://coinmarketcap.com/currencies/ethereum/">Ethereum</a> (ETH)</strong></td>
			<td width="33.333333333333336%"><a href="https://coinmarketcap.com/currencies/steem/"><strong>Steem</strong></a><strong>&nbsp;(STEEM)</strong></td>
		</tr>
		<tr>
			<td width="33.333333333333336%"><strong>Utility</strong></td>
			<td width="33.333333333333336%">Programmable "smart contract" platform</td>
			<td width="33.333333333333336%">Stemmit network store of value, social network reward token.</td>
		</tr>
		<tr>
			<td width="33.333333333333336%"><strong>Number of Holders</strong></td>
			<td width="33.333333333333336%">Approx. 1.6 million</td>
			<td width="33.333333333333336%">500,000+</td>
		</tr>
		<tr>
			<td width="33.333333333333336%"><strong>Community</strong></td>
			<td width="33.333333333333336%">Very Large</td>
			<td width="33.333333333333336%">Large</td>
		</tr>
		<tr>
			<td width="33.333333333333336%"><strong>Market Capitalization (2017)</strong></td>
			<td width="33.333333333333336%">$84,596,244,441</td>
			<td width="33.333333333333336%">$940,021,504</td>
		</tr>
		<tr>
			<td width="33.333333333333336%"><strong>Daily Trading Volume (High, &nbsp; 2017)</strong></td>
			<td width="33.333333333333336%">$4,891,390,000</td>
			<td width="33.333333333333336%">$3.987,600</td>
		</tr>
		<tr>
			<td width="33.333333333333336%"><strong>One-Year Performance (2017)</strong></td>
			<td width="33.333333333333336%">8,960.7%</td>
			<td width="33.333333333333336%">4,835%</td>
		</tr>
		<tr>
			<td width="33.333333333333336%"><strong>Public Awareness</strong></td>
			<td width="33.333333333333336%">High</td>
			<td width="33.333333333333336%">Low</td>
		</tr>
	</tbody>
</table>

<h2>Generalization vs. Specialization</h2>

<p>Ethereum and Steem exist on two different scales. With a capitalization in the billions compared to a capitalization in the millions, there are no fair comparisons of Ethereum and Steem. Ethereum outperformed Steem in just about every metric and in every conceivable way. Ether are traded more, have more market recognition and presence, and are more liquid than Steem.</p>

<p>When looking at the potential of the coins, however, it is worth noting that Steem has seen a nearly 50-times increase from its low and high in 2017, compared to Ether's 90-times increase. It is also worth noting the coins' original purposes.&nbsp;</p>

<p>When Ethereum was created, it was in response to a specific problem.&nbsp;</p>

<p>Bitcoin was the "proof of concept" for altcoins, the first viable and deployable blockchain/token combination. The intentions of the currency, as demonstrated by the shockingly large number of "genesis" coins that are now "lost," was to prove that a mathematically-derived decentralized currency can store value and hold value securely despite being traded and redeemed in transactions. Questions about long-term suitability were ignored or thought to be impractical to consider at the time.</p>

<p>As bitcoin, in part due to FOMO price speculation, grew in public awareness and use, these "shortcuts" in development became harder to ignore. Ethereum, the world's "first initial coin offering," sought to address many of the problems that plague bitcoin even to this day. They include:</p>

<ul>
	<li>Difficulty in implementing the bitcoin blockchain for uses other than transaction verification</li>
	<li>Difficulty in using the bitcoin token in non-currency related applications</li>
	<li>Transaction processing bottlenecks due to the small block size</li>
	<li>Price speculation due to the forced scarcity of the token</li>
</ul>

<p>Ethereum became the first "utility coin," or coin whose purpose is not primarily to hold a monetary value. The coin is a token that represents a "smart contract" or a peer-to-peer agreement that was negotiated, signed, and enforced without the need of a third party. This type of economic exchange allows for a wider array of transactions, including voting, lending and borrowing regimes, and loyalty systems such as Steemit.</p>

<h2>The Larger Question</h2>

<p>Steem is not ERC-20, but the idea of having a framework where companies can create daughter coins as part of their loyalty rewards program and where content creators can upload and curate their own content for coins had its origin in Ethereum. While the question of whether "Reddit with a reward system" can be viable is another question, Steem asks a deeper question. <em>Can a specialized system compete with a generalized system, when the generalized system can create ports like Hexel that can directly compete with the specialization?</em></p>

<p>Only time will tell.&nbsp;</p>

<p>Want more altcoin analysis? <a href="https://mediashower.com/ce2/66080/2051/4059" onmouseout="window.status='';" onmouseover="window.status='https://www.bitcoinmarketjournal.com/top-10-altcoins/';return true;">Learn more about the Top 10 Altcoins by market size</a> with Bitcoin Market Journal!
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