Steem, the latest "Social media" website announced early Friday that the website has suffered "a cyber attack" of an undisclosed nature. (archived)The blog post stated that "In the attack, fewer than 260 accounts were compromised, and less than $85,000 worth of Steem Dollars and Steem may have been stolen." CEO Ned Scott said. The company wasted no time informing the internet police and FBI of the attack, and claim that the hack is now contained and that no user accounts or wallets are at risk and they really mean it this time. The blog post also stated that any users whose accounts were compromised will be completely reimbursed.
Steem the currency currently has a market cap of $ 336,938,441 USD and is #3 in ranking on coinmarketcap.com, just below Ethereum at the time of writing. Each Steem currently trades for around $4.00, and total supply of these cowpies is 83,922,001. 24 hour volume was slightly under 2 million USD. Peace in Our Time.
assgoblinz.
After seeing this make Qntra headlines, I decided to investigate a bit more about the liquidity, versus the purported amount of earnings, along with skimming the unbearable whitepaper.
Steem is a unique scam in that it that speculation is built into the protocol. STEEM tokens turn into Steem Power or Steem Dollars. Steem Power is essentially a bagholder token – it can be converted back into Steem over a 2 year vesting period – the incentive being borderline ponzi – over 2 years 9 of every 10 Steem created is allocated to Steem Power. In short, you convert 1 Steem to 1 Steem Power and over 2 years it turns back into 9 Steem.
Steem Dollars are essentially a token that is incentivized to be converted to a dollars worth of Steem at any time.
Here is the real kicker, STEEM is never transferred in the voting process; the voting process merely determines the future allocation of Steem distribution via "payouts" which are given with 50% steem power and 50% steem dollars.
This likely means only 50% of the dollar payout amount displayed on Steemit.com is ever "immediately liquid" to begin with.
Okay, so I'm going to Buttrex, which accounts for 98% of Steems volume, and I see that of the time of this writing there are 509 BTC worth of Steem bids. That means there is only $335,000 worth of BTC of total of liquidity. A sell this big would of course bring the price to 0.
There is about 400 BTC of Bids on Buttrex right now above 0.002 BTC per Steem, which is approximately 50% of its current trading price of 0.0045. Realistically there is only about $250k of Steem liquidity.
Lets see a worse case scenario where top Steemit posters exit the market at the same time. There are about $70,000 Steam Dollar payouts (given payout statistics are based on total payout not just Steem Dollars correct me if I'm wrong), in the top 15-20 posts per day. This means only 50 posts can fully exit with their payout at any given time, and in result would crash the price (thus their actual payout would far far less, since the payout statistics are using inflated prices).
Steem is a bubble, and unless real BTC capital enters the market to create a sound foundation, everyone in holding Steem will eventually become a bagholder.
Nice. The bastard child of Pirate and Devcoin.
Oh God, just when I had forgotten about the shitshow that was devcoin …. but you're right.