After it gained momentum in July, catapulting in value to over $400m, Steemit’s digital currency (Steem) has currently cooled to an approximate market cap of $170m, which still makes it the fourth-largest on the market. Steem has outperformed the open source P2P digital currency LiteCoin and Ethereum Classic (ETC), which recently split from Ethereum after the DAO hack and the “Hard-fork” activated.
Launched in March and gaining prominence in July, Steemit is a social media with a blockchain backbone that rewards people for creating content. At first the idea generated a lot of skepticism, however, two weeks after Steemit first paid people who posted on its website on 4th July, its market cap soared more than 2,000% from $17.9M to $411.9M, according to data revealed by CoinMarketCap.
The brain-child of Daniel Larimer, founder of BitShares, (which currently rates 20 in terms of market cap) and Ned Scott, a former financial analyst, Steemit is similar to social media websites like Reddit and Facebook in the way it operates. Unlike them, however, the content is saved in a blockchain. Members can upvote content that they consider as high quality, and the authors who get upvoted can receive a monetary reward in a cryptocurrency named Steem.
Steem is the typical transferrable, freely moveable token similar to the popular bitcoin & ethereum. It can be put into two different types of smart contracts: Steem Power & Steem Dollars.
Steem Power is the backbone of an account’s voting-potential. Simply put, the more Steem Power an individual has, the stronger their vote is on Steemit. Steem Dollars, on the other hand, is a debt-like instrument that promises to distribute $1 worth of Steem to the token holder at some point in the future.