Steem cryptocurrency guide advises where to buy and how to buy Steem. This guide also contains the markets, value, trading, investing, buying, selling, transactions, blockchain, mining, technology, advantages, risks, history, legislation, regulation, security, payment, networks and many other interesting facts about Steem as well its status in the world of cryptocurrencies.
Steem, Wednesday, 2018-05-09
- 1 What Is Steem?
- 2 Beginner's Guide to Steem
- 3 Where and How to Buy Steem?
- 4 Steem Markets
- 5 Where to Spend or Use Steem?
- 6 How Does Steem Work?
- 7 Steem Regulation
- 8 Is Steem Secure?
- 9 History of Steem
- 10 Steem Videos and Tutorials
- 11 See Also
What Is Steem?
Steem is an open source and decentralized cryptocurrency used for powering the Steemit platform. Steemit is an incentivized blockchain social media platform where users are free to curate content and get a reward for it.
Steem is a representation of a fusion of ideas borrowed from cryptocurrencies and social media to create a new type of platform. Therefore, Steem comes to take the focus of cryptocurrency a notch higher and away from the standard models that only focus on payments.
The cryptocurrency uses Delegated Proof-of-Stake to encourage users to create and readers to consume it. It combines two main features; the reward pool and trading system. The Steem network has three types of tokens.
- 1) The Steem: This is the primary token in the Steem blockchain. All other units (tokens) in the Steem system draw their value/ power from Steem. You can use Steem in its form, convert to Steem Dollars, or buy other cryptos in the network. The supply of Steem increases by 100% every year.
- 2) Steem Dollars: This is the token/unit used for rewarding users who curate and post content on the Steemit network. Every Steem Dollar is equivalent to one conventional US dollar. This is important in helping the crypto avoid negative value fluctuations. If you hold the Steem dollars for one year, they will earn an interest of 10%.
- 3) Steem Power (SP): This is a unique token symbolizing the amount of power that a user has on the Steemit platform. The Steem power is the factor considered by the Delegated-Proof-of-Stake to determine who contributes to the voting and transactions confirmation in the network. Over 90% of the new STEEM created in the network goes to nodes/delegated who have a lot of SP. Remember that you can always convert SP to Steem or Steem Dollars with ease on the network.
Beginner's Guide to Steem
What is the best cryptocurrency to join and enjoy higher returns? At a time when cryptocurrencies have become so many, new enthusiasts are faced with the dilemma of making the right decision on the network to join. As blockchain technologies keep diversifying, tech experts are now interested in rectifying issues noted in the previous cryptos.
One of the most promising cryptocurrencies today is Steem. The cryptocurrency was designed to help promote content publication and consumption in the native Steemit network. Its architecture is based on the principle that attaching a fee to a crypto network discourages users from joining and using the network.
But having zero transaction costs is not the only thing that makes Steem desirable. The cryptocurrency employs the ‘Proof-of-Brain’ community incentive that seeks to help people create and curate content on the Steem network. The model makes it possible to distribute tokens using an ‘upvote’ as well as a ‘like’ type of algorithm to get integrated with sites between app owners and community.
You need to find out more about the crypto network to appreciate additional benefits and associated risks. This is what this guide is designed to do.
The guide aims to help users understand the Steem network and how it works. It seeks to answer all the questions you might have and clear every doubt about the network. Do not make an arbitrary decision; learn everything about Steem from the guide.
It explores the history, founders, how to buy, where to sell, markets, profitability, and benefits. It also analyses the risks, security, wallets, and value of Steem. Whether you are new to the crypto world or have been in the industry but want to know more about Steem, this is your guide. Welcome to discover the outlined Steem components and many others.
Where and How to Buy Steem?
Between April of 2016 and mid-January of 2018, the value of Steem rose steadily with more than 500%. This incredible shift demonstrates the potential of Steem to grow even to higher levels. To take advantage of this huge growth, the first step is getting some Steem. Here is where and how to Buy Steem.
- Start with a decision to join Steem. This is very important because there are very many other cryptocurrencies out there.
- Acquire a good cryptocurrency wallet to hold your Steem tokens. This is the location that will hold the tokens while waiting for their value to appreciate or trading.
- Identify a great cryptocurrency trading platform to and register for a trading account. Some of these examples include CoinSpot, Changelly, and Bittrex.
- Confirm your cryptocurrency trading account using personal information such as phone number and date of birth. Note that the info required for this confirmation may differ depending on the selected exchange
- Purchase the preferred quantities of Steem. Note that these tokens will go directly into the trading account. This implies that they will need to be move the Steem tokens from the trading platform to the personal wallet.
How do you store crypto coins after a successful purchase? The answer is a cryptocurrency wallet. This is a digital location for holding your crypto coins or tokens such as Steem. Before checking on the top Steem wallets, it is important to delve deeper into the concept of the digital wallet. While the accepted definition of a cryptocurrency wallet is a storage location, this is indeed a misnomer.
The Steem tokens only reside in the Steem network. Because they are not printed or minted, they cannot move away from the main network. Therefore, what the wallet stores are a set of codes that point and bridge the Steen tokens you hold in the network. The Steem wallet stores two types of codes;
- (I)The private keys. These are used to identify and activate your Steem tokens in the network. Without the private keys, you cannot make any transaction in the Steem network. As the name suggests, the private keys are personal and should never be shared.
- (II) The public keys. This is the address that points to your wallet. It is the code that miners spread in the network use to confirm that you have ample Steem to send or Steam Power to contribute to voting.
The wallet for your Steem should be selected with a lot of care. Special focus should go to establishing that the wallet is secure and will not risk your tokens. Here are the top three Steem wallets to consider.
- The STEEM Wallet (web-based wallet):
- This is the recommended wallet for users on the Steem network who do not want to the trouble of losing their coins. Unlike the standard desktop wallets that require users to manage their private keys, it is different when it comes to Steem wallet. The wallet helps to backup all data so that users can always relax without worrying about losing their tokens.
- As a web-based wallet, it means that the user is at a greater risk of suffering from cyber attacks. Therefore, the wallet moves most of the Steem tokens to an offline vault for extra security. Besides, you can add another layer of security on the wallet by enabling new security codes and verifying personal phone number. The main aim of STEEM wallet is enhancing simplicity in storage and transacting Steem tokens.
- While the Steem development team has put every effort into enhancing the security of this wallet, it is important to appreciate that the vulnerability remains high because it is a web-based digital wallet. Therefore, it is prudent only to access the network from a secure device and avoid visiting high-risk sites.
- The vessel wallet (desktop wallet):
- As a desktop wallet, Vessel requires users to download the application and install on their computers. It is designed to be a lightweight app that helps users to sign transactions without the keys leaving the wallet.
- When you install the Vessel wallet for the first time, it generates the private keys and recovery seed that you must store safely. Experts advise that you should store these codes securely away from the main computer.
- To make management and security of your tokens even more effective, the Vessel wallet allows users to encrypt and transfer their private keys. This means that you can shift the wallet from one computer or device to another without getting worried about attacks.
- The Steem Cli wallet (desktop wallet):
- Though many people prefer using the Steem wallet, the Steem Cli wallet is considered more secure. It comes with more features and allows traders to move more Steem safely.
- The wallet helps users to access the Steem network and run various commands including changing recovery account, claiming reward balance, and creating an account with delegated keys among others. When you install the Steem Cli, it makes you a full node which allows you to become a delegate in the Steem network. To use the Steem Cli, you will need to access and use a PRC server like steemd.
Where to Buy Steem with Credit Card?
When the term cashless society comes up in many discussions, what comes to the mind is a system without notes and coins. Most people are fast to conclude that using credit cards makes the system truly cashless. But this is incorrect. When you make payment using a credit card, it means that you are using actual cash stored in a bank or the respective credit company.
Credit cards have gained a lot of acceptance both in online and conventional marketplaces. Now, you do not have to worry about buying cryptocurrencies because they can also be used to make a purchase. Here are of the places where you can buy Steem with a credit card.
Where to Buy Steem with PayPal?
PayPal is a great payment network especially for people shopping on e-commerce stores. The payment service was designed to take the idea of online shopping a notch higher. However, it is still a representation of the cash you have in the PayPal system. The bad news about PayPal is that it does not allow transactions with crypto related networks. Though they have indicated that they are working towards making such payments possible, people with cash in PayPal can only buy Steem through offloading to the credit cards or bank accounts.
How to Buy Steem with Wire Transfer?
One interesting thing about the crypto community is that no one wants to let go of the conventional bank account. Most people have a lot of trust in their banks. They believe that the banks have invested amply in good infrastructure, risk measures, and are professional enough to handle salaries and even investment advice. Now, you can even buy cryptocurrencies such as Steem using wire transfer. Here is the procedure.
- Start by acquiring an appropriate Steem wallet. This is the location that will hold the Steem tokens after the transaction is over.
- Select an appropriate exchange that trades Steem. Some of the great exchanges that allow users to buy Steem with wire transfer include Poloniex and Changelly.
- Open a trading account with the bank. This is one of the requirements guided by local laws. The accounts will further have to be verified using personal details such as phone number, proof of location and date of birth. These details could vary depending on the selected exchange.
- On the selected trading exchange, navigate to the assets purchase section and select Steem. Pick the preferred quantity and tick pay with a wire transfer. Once you click complete, the transaction will go into a pending mode. It will remain in this status until the cash hits the exchange’s account.
Note: Though the transaction will be completed when the Steem reaches your trading exchange account, it is advisable to move it immediately to your selected wallet. This is important because the exchange puts your tokens at great risk of being stolen by hackers.
Where to Sell and Trade Steem?
Cryptocurrencies have been developing at a very fast pace since 2009. By early 2018, there were more than 1500 cryptocurrencies in the market. With this sudden explosion, the trading platforms have been growing at the same rapid pace to meet the ever-rising demand. Here is an account of where to sell and trade cryptocurrencies such as Steem.
Once you have some Steem, they can be traded on top cryptocurrency exchanges that list them. These are trading platforms that work the same way forex markets operate. However, they trade in cryptocurrencies as opposed to fiat currencies. To trade in these platforms, you need to identify the best one and signup for a trading account.
It is important to note that unlike the cryptocurrency networks such as Steem, Bitcoin, and Ethereum among others that are not regulated by any laws, the trading platforms are different. Most of them operate under the local laws which means that users must create trading accounts and verify them. To put it differently, you cannot trade anonymously in the crypto markets. Therefore, be prepared to create trading accounts and verifying them with information such as the phone number, date of birth, and proof of address. In addition to these considerations, you will need to pick the right trading platforms to use. Here are some useful tips you can apply.
- Only go for the platforms that have utmost commitment to users’ security.
- Note that your Steem are at the greatest risk of getting lost at the trading platform. The ideal trading platform should not have a hacking history.
- Look for the platform that has low transaction fees.
- This is very important to reduce the risk of having all the profit galloped by the transaction charges. This can only be done through comprehensive comparison of transaction charges in various platforms.
- Only go for the trading platforms with a good history.
- Talk to others especially in the cryptocurrency communities to understand the commitment of various platforms to their clients.
- Pick the platform that lists many digital assets.
- This will guarantee you that there will always be a profitable asset to pair with Steem when the current one becomes less desirable.
Some of the top Steem trading platforms you should consider include Bittrex, Poloniex, Changelly, and CoinSpot.
How Much Are the Transaction Fees of Steem?
One of the principles used to help advance Steem is that users should not be charged anything when making transactions. The development team asserts that when you attach a transaction fee to a network, many people especially those sending small amounts will get deflected away. It is even worse because these people do not have anywhere to run to since banks are already very expensive. This is the reason why Steem decided to do away with transaction costs. This means that you can send cash from one point to another for free on the Steem network.
At this point, the Steem Whitepaper makes it very clear that even when a small percentage is charged, the actual cost can become very high after the value of such asset grows. One great example to demonstrate this is Bitcoin. Even though the charge may sound small when stated in percentage, it is actually a huge figure in actual currency. In January of 2018, the cost of the transaction at the Bitcoin network was more than $30. This is the situation that Steem wants to avoid in future.
After accumulating some Steem in your account, it is time to start thinking about what to do with them. Some opt to hold the assets waiting for them to gain value over time while others prefer to utilize the value for shopping. However, the most profitable way to use Steem is trading in the cryptocurrency markets.
The cryptocurrency markets are exchanges that bring together sellers and buyers the same way forex markets do. These markets have been growing in numbers and complexity to serve the ever-growing crypto community. Here are the main Steem markets to consider.
- Binance is a Chinese based and a leading cryptocurrency in the globe. It was founded by Changpeng Zhao in mid-2017 by Changpeng Zhao who wanted to redefine how cryptocurrencies operated. He not only made sure that the cryptocurrency has the lowest transaction costs in the market, but also designed wit to support very high transaction costs.
- The platform lists a very large number of crypto assets to guarantee users that they will always have a profitable pair to fall back to in case the current one becomes less desirable. Steem was added to the Binance market in February of 2018. Note that you will require opening a trading account and confirming it with details such as phone number and proof of address.
- The transaction fee at the Binance market is 0.1%. This means that it is one of the cheapest in the market. However, you can enjoy even lower transaction fees by trading Steem and BNB (Binance Coin, the native token in the Binance network). They also offer numerous discounts for those who trade and make payment with BNB on the Binance network.
- This is one of the leading Steem markets in the crypto world today. The cryptocurrency market was started by the famous MinerGate group. This is the team that was associated with the famous MinerGate mining pool that helped people consolidate their mining power to mine the Bitcoin network.
- One of the unique things about Changelly is that it does not require a lot of verification. While other exchanges such as Poloniex and Bittrex dig deep into your details, Changelly only requires users to have email addressed to start trading. However, this level of verification allows you to only trade very low volumes. If you want to move bigger volumes, more verification with phone number and date of birth among other details will be required.
- To trade Steem on the Changelly platform, users are required to pay 0.5% of the transaction volume. Though this is considered relatively low because there are platforms that charge more, Changelly should consider bringing it down for more users to join and use it.
- One of the most outstanding things about Changelly is that it allows users to make payment and withdrawals using credit cards, wire transfer, and even fiat currencies. This means it is a very useful platform especially for new Steem enthusiasts who want to join but only have cash on their credit cards or banks.
- This is a US based cryptocurrency exchange that was started in 2014. The founders, Bill Shihara, Ryan Hentz, Richiel Lei and Rami Kwach, targeted providing a great trading platform that users could use securely and fast. Notably, the exchange is highly committed to operating within the limits of local Nevada laws.
- It is important to appreciate that because of the commitment to adhere to the local laws, Steem traders are required to follow complex verification procedures. These include verifying personal trading accounts with a personal phone number, date of birth, and proof of address. Note that even with these many requirements, the exchange is still highly effective and will create your account within 30 minutes.
- Many traders using Bittrex platform indicate their satisfaction because of the many altcoins it lists in its system. By early 2018, Bittrex had more than 250 altcoins that traders could pair with Steem. It is crucial to note that unlike other exchanges that are hasty to list every other crypto asset, Bittrex is different. It vets all the assets carefully to reduce the risk of leading traders into losses and Ponzi schemes. The platform is particularly cautious with of ICOs and new forks because the risk involved is very high.
- The transaction cost at Bittrex is 0.25% of the trading volume. The low transaction charges have made the trading platform to become one of the most preferred by both expert and new crypto enthusiasts. But this is not all.
- The design of the platform comes with unique features such as stop loss and instant sell/buy that helps users to optimize profitability. This implies that users do not need to be there to take advantage of the shifting demand to make a move. Simply set your trading account to work for you.
- The biggest setback of using Bittrex is poor customer support. Even though its system is very desirable, issues relating to their clients take very long to get addressed. A lot of traders have been complaining that inquiries are rarely responded to while spending issues that make accounts put under review can take a very long time. This means that traders can easily miss great trading opportunities simply because their accounts are under review.
- HitBTC is another fast upcoming cryptocurrency in the market. Many people prefer it because it is easy to use infrastructure and a lot of digital assets. It is among the first platforms to list new ICOs, new tokens, and other assets entering the market. Users are, therefore, assured of taking advantage of every new opportunity to acquire latest tokens before their value start growing. Remember that most tokens such as BNB started at the ICO stage before growing rapidly to hit their current levels.
- Another selling point of HitBTC is its low transaction fee and high liquidity. Traders only need to pay 0.1% of the trading volume as fees. This makes it cheaper than top markets such as Poloniex that charge 0.5%. Besides, the platform has created advanced application building protocols.
- The main shortcoming of the platform is that withdrawals take very long to be effected. Besides, the exchange was hacked in 2015 and thousands of crypto assets siphoned away. This has been one of the main undoings because every person hearing about the hacking history is likely to walk away.
Value of Steem
To join a specific cryptocurrency network, investors and their communities are mainly interested in knowing its value. This is the value that helps them to compare the network with others and make a decision on whether it is a great option or not. Steem value has been on an upward trend since inception. However, the rate has been very slow compared to other newer cryptos in the market today.
When it was launched in 2016, the value was about $0.6. Then, it grew progressively to reach the highest mark of $7.0 on 3rd January of 2018. The, it fell sharply from $7 to about $3.6 by mid-February 2018. By February, the market capitalization had grown to $1.8 billion from $2.6 million recorded at the beginning. A lot of people are expecting the value of Steem to keep going up in the coming years as bigger cryptocurrencies such as Bitcoin become less desirable.
Is It Profitable to Invest in Steem?
If you target investing in cryptocurrencies, Steem is one high potential option. Between April of 2016 and February of 2018, the value of Steem grew by more than 500%. Though there are other cryptocurrencies that reported higher growth and ROI, Steem is still remarkable. If you had invested about $10,000 by April or May in 2016, the investment would have grown by over 500% early in 2018. Other indicators of profitability in Steem include;
- The cryptocurrency is attracting a lot of interest, and its community keeps growing progressively.
- The Steem development team is very committed to making the cryptocurrency better and demonstrating greater value.
- Investors in other networks are expressing their desire to be on a platform in order to enjoy zero transaction costs.
- The network is better compared to others such as Bitcoin because the transactions are completed faster, and scalability issues have been addressed.
While it is clear that market expectation from Steem is very high, you also need to appreciate that a lot of things can happen and compromise the anticipated high returns. For example, the looming regulations, entry of new and better cryptos, and industry news can easily affect the profitability.
Where to Spend or Use Steem?
One way of gauging the acceptability of a cryptocurrency in the community is checking the stores that accept it for payment. Every cryptocurrency out there is fighting to get accepted as a means of payment in both online and conventional stores. Though Steem has worked extra hard to get many stores accepting it as a means of payment, the number of places where you can use the tokens are very few. Some of these stores include Uwe Reinsch Holzbau–Zimmerei, a timber company in Germany and EINSTEIN kafee Bistro in Potsdam Germany. You can also use Steem in cryptocurrency exchanges to buy other crypto assets.
Note that you should not consider stores that do not accept Steem to be completely out of reach. You can convert Steem to the accepted crypto in the exchanges and make a purchase.
Can Steem Grow to Become a Major Payment Network?
Every cryptocurrency network out there is working towards becoming a major payment network. Though Bitcoin has moved far ahead, it is the other networks such as Steem that are stealing the show. Here are some of the pointers that indicate Steem can grow into a major payment network.
- The cryptocurrency does not have transaction fees.
- Many top cryptocurrencies out there have fallen victims of their own success. For example, while Bitcoin has been very successful, the cost of transactions has become too high. Now, more people are opting to shift to Steem to enjoy free transactions. Because it does not charge clients to make transactions, Steem is likely to become very attractive to users.
- Traders are particularly attracted to Steem because their clients are not charged when making payments. This means they can manage to use their networks and still maintain their cost low as an added advantage.
- The Steem cryptocurrency has been gaining a lot of value, and the community is growing rapidly
- For a crypto asset to become a major payment network, the community needs some assurance it will gain value over time. People want to be associated with a succeeding network. Steem has managed to keep the value on an upward trend, and the growing community is a demonstration of trust. With time, this community will start using the network and make Steem it a major payment network.
- The lead team is highly committed to continued improvement
- Since inception, the Steem development team demonstrated its commitment to progressively adding new features to make the network better. The new features are helping the network to become a better system and raise the chances of becoming a major payment network in three ways; attracting more users, providing good publicity, and growing value over time.
- The Steem cryptocurrency employs SMT (Smart Media Tokens)
- SMT can be launched easily by enterprises and individuals to monetize their online content. The token allows users formulate incentives to drive desired behavior. The SMT are like ERC-20 tokens in many ways but are designed using ‘Proof-of-Brain’ properties to encourage people to use their brains to earn from the Steem network.
How Does Steem Work?
The design of Steem targeted promoting content publication and consumption on the native network, Steemit, using Proof-of-Brain properties. It also employs a unique token distribution reward model referred as Smart Media Tokens (SMT) for the digital content and related enterprises.
When content is posted on the network, user accounts (nodes on the network) can upvote posts and even comments the same way it happens in other social news networks and blogging sites such as Reddit. The authors who get upvoted are rewarded in Steem Dollars. You can also be rewarded for discovering (curating) content. This is a process of voting comments and submissions on posts.
For you to vote and get the curation rewards, you need to have a stake in the cryptocurrency. This means that though Steem allows mining, just like other cryptocurrencies, that is not the sole method of earning on the network. Steem created on the network are distributed to the people who create content and discover it in the Steemit network.
The network operates in its three main tokens that include Steem, Steem power, and Steem dollars. After getting paid in Steem Dollars, you can convert to Steem and sell on the cryptocurrency markets. You can also hold the Steem Dollars to earn an interest of 10% annually. The last option is converting Steem Dollars to Steem Power that delivers the highest reward.
Note that as a cryptocurrency, you can still use Steem to send the value to others spread in the network. To do this, you need to have the right public address of the payee and execute the transaction from your wallet. This is a great method of sending value without going through centralized organizations such as banks or financial services like PayPal.
Does Steem Use Blockchain Technology?
Steem uses blockchain technology. Steem operates on a blockchain-based technology referred as Graphene that allows development as well as the deployment of the app-specific blockchain. It closely mimics the application of smart contracts in the Ethereum network.
The blockchain allows users to use the main asset/cryptocurrency, Steem, with an option of changing it to Steem Power or Steem Dollars. The cryptocurrency utilizes delegated Proof-of-Stake consensus model to vote on various transactions in the network. As a platform that targets to promote content posting and discovery, the users (nodes) are required to hold some stake in the form of Steem in order to be selected to confirm the transactions. The content to be voted on can be content posted on the network or a transaction involving sending of value in the Steem system.
Under the delegated Proof-of-Stake model, all the nodes spread in the network have to select delegates that should participate in confirming transactions. To get selected to participate in voting, you must have a high personal stake (quantity of Steem) in the network. The bigger the stake you have, the higher the chances of becoming a delegate and confirming more transactions. You will also be involved in adding new blocks into the Steem public ledger.
Steem is based on the social media platform, Steemit, which allows users to earn rewards for contributing high-quality content and rating what others have posted. However, people are also allowed to mine the network like other cryptocurrencies. Here is an account of how to mine Steem. The process starts by setting the mining account using the procedure below.
- Start by registering an account on Steemit website. This registration requires users to have Reddit or Facebook account as a method of verification. Once the account is ready, you can go ahead and post content to earn some Steem. You can also commence mining Steem.
- Download and install the Steam Windows Wallet and Miners for Windows. Note that the miner will only operate in a window with more than 64-bit Windows. Run Steemd.exe after extracting steem-win-x64-012-2.zip.
- Once you run the Steem Daemon, it will create a witness_node_data_dir directory. Some additional folders and files will be created inside. Inside the witness_node_data_dir, navigate to the config.ini file using notepad and add several Steem nodes, create a user name and private keys.
- Select the number of threads that you should use depending on your CPU. The higher the number of threads, the higher the hashing rate.
Once you have set the mining system, run the steemd.exe again and allow the blockchain to synchronize. This will take about 30 minutes based on the network connection. Because the Steem blockchain is not very big, it is advisable to ensure you have ample space on the hard drive. Besides, it should also have a large memory. Though 5GB of RAM will work, it is advisable to target 8GB. With all the system clearly set, you only need to relax and wait until your turn comes. The Steem system will queue your system and allocate you the block to confirm at appropriate time. Patience is of essence when it comes to mining Steem. Remember that the reward in the Steem network is done in Steem Power tokens.
What Are the Advantages of Steem?
The main thing driving people into cryptocurrencies such as Steem is the associated benefits. After the cryptocurrencies were discovered in 2009, their advantages have become distinct, and no one wants to miss them. Here are the main advantages that you should expect when trading or using Steem.
- Ability to operate in total anonymity.
- One of the main reasons that make people join cryptocurrencies is the desire to operate with utmost privacy. Banks cannot provide this. In most of the times, your transactions and bank balances are known to all cashiers, managers, and even financial authorities in the industry. Now, Steem encrypts all details of users’ accounts and transaction details so that no one can unmask the identity of the account owner. Even the nodes involved in confirming transactions can only check the Steem balance but not the details of the user.
- Complete cover from third-party seizures.
- If you have some cash in a bank, you are an easy target by attorneys and even authorities. If a case hauls itself into your doorsteps, your account will be the first to get frozen. However, putting investment in a cryptocurrency network such as Steem means that it is completely hidden from third parties. Whether it is the government of the day or your enemies, no one can tell about your crypto account or even have authority to seize it.
- The Steem cryptocurrency is considered one of the most promising in the market today.
- Since the establishment of Steem, its value has been on a steady upward trend. After entering the market, the value of Steem was about $0.6. Then, it grew progressively to hit an average of $3.6 by early 2018. This is a whopping 500% growth. It is an indicator that users can expect even more growth in the coming days.
- Steem is led by a highly enthusiastic team.
- When people and investors look for cryptocurrency networks to join, they are interested in knowing how good the development team is. Steem is led by a highly enthusiastic team that guarantees them of better security and new features.
- Offers a cheap way to send and receive cash.
- For years, the cost of transactions has been very high when using the banking system. Besides, it can take many days depending on the bank, the involved parties, and payee’s jurisdiction. However, Steem has created a new way of making payments faster and more reliably. Because all transactions are peer2peer, the cost of shifting value is very low and indeed faster. It will only take a few seconds to send the value on the cryptocurrency network.
- It is one of the best methods of using and owning the network.
- If you send cash using standard money services such as Visa or even a bank, there is a great sense of passiveness. However, Steem allows users to join, use, and own the network. Once you become one of the nodes, you will have the authority to take part in voting on important matters and during transaction confirmation.
What Are the Risks of Steem?
Just like Steem comes with many advantages, it is also associated with a lot of risks. Well, do not simply look at the positive side. Make sure also to check the disadvantages that come with using Steem and weigh carefully whether it is okay for you or not. Here are some of these risks that come with using Steem.
- The danger of getting attacked
- It is important to appreciate the danger of getting cyber attacks when you join a cryptocurrency network. While the Steem team works extra hard to ensure that the network is secure, you can never be 100% free from attacks. It is not uncommon to hear people saying that their crypto assets have been stolen after attacks. You can get attacked at the network, wallet, or even exchange levels.
- The risk of getting involved with criminals operating anonymously
- As an anonymous network, it is very difficult to know the details of the target address. In many cases, sellers and even criminals involved in Ponzi schemes can easily trick their users into making payment to their accounts. By the time you establish that the involved parties were criminals, it will be too late. But the damage will already have been done because crypto related transactions cannot be reversed.
- The looming regulations
- Many governments have vowed to pass harsh regulations that will slow down or halt the growth of cryptocurrencies altogether. In countries such as China and Russia, cryptocurrencies such as Steem are considered disruptive and out to prevent governments’ effective operation. If these administrations live to their words and pass harsh regulations, the chances are that the value of cryptos such as Steem will nose dive. The communities are also likely to shrink over time.
- High volatility
- Like other cryptocurrencies, Steem is a highly volatile asset. This implies that the performance in the market responds to occurrences in the crypto niche, finance industry, and even administrative realms. For example, the value of Steem responded with a downward shift when China banned ICOs, and a cryptocurrency in South Korea was hacked in 2017.
- Threats from newer and more appealing cryptocurrencies
- Every cryptocurrency in the market targets addressing issues identified in previous networks. Just like Steem sought to address problems such as Scalability and speed of transactions found in previous networks like Bitcoin and Litecoin, it is likely you also face the same fate in the future. As more appealing and advanced cryptocurrencies join the market, there is a risk of people shifting to them. The Steem crypto could lose its appeal and even value.
What Happens if Steem Gets Lost?
It has become a common trend to hear people shout that they have lost their digital assets. Whether at the cryptocurrency network or the exchange level, the danger of loss always looms. However, you might want to know what actually happens when a digital asset such as Steem gets lost.
At this point, it is important to clarify that Steen and all the other tokens can only reside in the Steemit native network. Because they are not minted or printed like conventional notes, a loss means something different. To appreciate what happens when Steem gets lost, the best thing is following the channel of loss.
- 1) Loss through hacking: In this case, the Steem tokens are still in the network but under a different person. They have been stolen and now have a new owner.
- 2) Loss through sending to the wrong address: The Steem tokens are still in the network but under the new address. The problem with is that the transaction cannot be reversed.
- 3) Loss through forgetting or losing the private keys: It means that the tokens are still in the network but in a dormant state. They will remain in the dormant state until you get and use the right private keys.
- 4) Losing Steem through damage or loss of Steem wallet: This loss implies that your Steem tokens are still in the Steemit network but in a dormant state. You will need to get the right wallet to restore them.
When Satoshi Nakamoto released the first blockchain network, he never expected the invention to run as wild as it is today. As opposed to only serving as a payment network, other cryptocurrencies have stolen the show in every aspect of people's lives. They are applied in video & gaming niche, education, and media. Now, Steem tokens are used to promote content development and consumption.
One thing that all the cryptocurrencies have in common is digital tokens that are used for sending value, investment, and promotions. The design of these tokens and the entire crypto networks are seen as serious threats to governments of the day. Most administrations feel threatened by the crypto networks because they help to bypass conventional organizations such as banks and make tax collection difficult.
The G20 Summit in Argentina that aimed at addressing the issue of cryptocurrency regulations on March 2018 ended with the same recommendation that community has had before; the need for crafting cryptocurrency regulations. The G20 members appreciated that the blockchain technology represents the apex in fintech. However, they pointed that issues emerging from cryptos application such as tax evasion, investor protection, market integrity, and fraud need to be addressed in using an appropriate legal framework.
Since 2009 when Satoshi Nakamoto released Bitcoin, many countries such as China have resorted to barring crypto related activities such as ICOs (Initial Coin Offering) and freezing bank accounts associated with crypto trading.
However, it is around ten years since 2009 when the first cryptocurrency entered the market yet no country has a legal framework. Some people have been asking why it is becoming so difficult to pass such regulations. Here are some things making countries unable to pass cryptocurrency related regulations.
- The cryptocurrency technology is advancing very fast. Even before the community fully evaluates a new crypto technology, a new one will have hit the market.
- The cryptocurrency networks have brought major solutions to great problems such as Big Data. Now, no administration wants to rush to block these solutions.
- The blockchain networks such as Steem come with two very divergent impacts. Some such as allowing users to send cash faster and at lower cost are very good while others like creating a good channel for fraud are very bad.
- Many administrations are caught unaware by these cryptocurrencies and their blockchain networks.
- The cryptocurrency debate is slowly mutating from a standard logical consideration to a highly political and emotive thing. Now, no administration wants to be seen going against the wish of the people.
NOTE: From the United States to Japan, one thing that comes out clearly is the desire to pass crypto regulations. Therefore, Steem and other cryptocurrency users should know that sooner or later, the crypto regulations will finally dawn.
Is Steem Legal?
Steem is legal in most countries because no jurisdiction in the globe has passed a legal framework. While many countries strongly feel offended by cryptocurrencies, the blockchain networks are still legal. Here is a closer look at individual countries and the status of Steem.
1) The United States
- The United States was the first jurisdiction to note the risks associated with cryptocurrencies. However, it is emerging that the jurisdiction is the biggest beneficiary of the technology because of the emerging problems of Big Data and its management. By failing to craft a legal framework to guide cryptocurrencies such as Steem, it means they are legal.
- The only initiative taken by the Federal administration is clarification from the Commodities Futures Trading Commission (CFTC). CFTC insisted that cryptocurrencies such as Steem should be considered as commodities. This clarification was aimed at helping traders make the right tax deductions to the tax authorities in the US.
- The finance department has indicated its commitment to creating a legal framework that will help address the notion of anonymity in cryptocurrencies. The government has taken a global focus to ensure that cryptos do not become tax havens. As the government works on a local framework, it has also started lobbying other states to make crypto regulation global.
- Steem is legal in Russia. Russia had initially indicated that it was unwilling to pass a legal framework to guide cryptocurrencies such as Steem. However, the finance ministry changed the approach early in 2018 by indicating that it was impossible to tell whether cryptocurrencies use was legal or not.
- The central bank and finance ministry started working on a draft law until the end of January 2018. The proposed draft bill is expected to guide every aspect of the cryptocurrency trading. It targets defining and outlining how ICOs should be done, running cryptocurrency exchanges, mining, and development. This approach has attracted sharp criticism especially from the opposition in the country.
- Like Russia, Austria has strongly expressed its desire to regulate cryptocurrencies applications. The country’s administration has indicated that its focus is not targeted at limiting the growth of cryptocurrencies such as Steem. Rather, it wants to ensure that the cryptocurrencies are not used for fraud and tax evasion.
- Austria's finance minister indicated that they are at advanced stages of concluding the draft bill because the EU is yet to provide a guideline for member states to follow. However, he was fast to note that any effort to regulate cryptocurrencies need to take a global outlook because cryptocurrency networks are not owned by a single person, company, or country. Because they are used by nodes and users spread in its system, regulating them in one jurisdiction would have limited impact.
- Since cryptocurrencies entered the globe, Chinese administration has never had kind words for them. The administration feels threatened by cryptocurrencies because anonymous networks such as Steem hamper its efforts to curb cash outflow and corruption. The nation started with banning ICOs (Initial Coin Offering) before extending to freezing bank accounts of cryptocurrency exchanges, and miners. Even with these efforts, China still lacks a legal framework for cryptocurrencies.
- Even with this commitment to slow down cryptocurrencies, Steem and other digital networks have grown faster in the country than any other jurisdiction. In 2016 and 2017, China had some of the most successful cryptocurrency exchanges, digital assets, and pools of miners.
- While other countries such as China and Russia are fast in limiting cryptocurrencies use in their jurisdictions, Switzerland is doing the opposite. The nation has indicated that it wants as many cryptocurrencies as possible to go and set their bases there. The Swiss economic Minister indicated that the administration would stop at nothing in making Switzerland a crypto nation. He was particularly emphatic that he will help crypto networks run successful ICOs in the country as a way of raising funds for various projects.
Steem and Taxes
Like crypto regulation, the topic of taxes is very confusing. A big portion of Steem community and other cryptocurrency enthusiasts feel that the anonymity provided by crypto networks is ample to help them live tax-free. However, tax experts have a very different view.
While the Steem team remains highly focused on enhancing anonymity of all users in the network, the cover cannot last indefinitely. This means that new technology can be discovered in future and all the anonymous details get uncovered. Well, this assertion is not farfetched. Here is a situation that demonstrates you should be aware of dangers of getting uncovered.
In mid-2017, a strain of malware called ransomware ravaged institutions in Europe. The malware was attacking companies and encrypting files before the group behind it asked for a ransom. Because Bitcoin was considered anonymous by then, the wannacry criminals insisted on getting paid in BTC. However, technology advancement made it easy to follow and unmask account users in the network. This reality made these criminals unable to withdraw their crypto coins.
Though you have ample cover on the Steem network, the chances are that newer technologies are coming and could make accessing your details a click away. This reality should not deter you from joining the Steem network and enjoying all the benefits that come with using it. You only need to follow these tips to remain on the right side of the tax laws when using the Steem network.
- Consider any income from the Steem network as taxable revenue. Whether it is trading or mining, always make appropriate deductions to the tax authorities.
- Every time you trade in Steem, ensure to capture important details such as the volume of transactions and value in both Steem and fiat.
- Even when you trade Steem but fail to make a profit, ensure to capture the transaction in your books of accounts.
- For traders who move large volumes or accept payment in Steem, it is advisable to work with a tax professional for assistance.
- Be on the lookout for crypto-related laws and closely check the crypto laws related debates. If you sense that the laws will have negative implications on Steem, your investment, and tax considerations, scale down.
Does Steem Have a Consumer Protection?
Steem does not have consumer protection. Like other cryptocurrencies, Steem is owned by the users and nodes spread in its network. The moment that the founders of the crypto network completed and released the core code, they ceased being the owners of the cryptocurrency. At Steem, the users spread in the network are responsible for consumer protection. This means that you are on your own when operating in the Steem network.
If anything such as sending Steem to a wrong address happens, you do not have anywhere to report to. This is made worse by the fact that cryptocurrencies are not regulated. Therefore, you cannot seek redress from the court of law. This reality brings about another question; how can you operate safely on the Steem network? Here are some useful tips to consider.
- Start by selecting the trading platforms with great care.
- Always triple check the public address when sending the value.
- Make sure that you carefully secure the private keys and backup the cryptocurrency wallet.
- If possible, only use the same computer when making Steem related transaction. This computer, as well as the Steem node, should also be up to date.
- Only invest the amount you can afford to lose when trading Steem in the market.
Illegal Activities with Steem
Many criminals consider cryptocurrencies great targets because they provide privacy form scrutiny and authorities. They know that running Ponzi schemes gives them ample time to trick unsuspecting cryptocurrency users. Despite this reality, no illegal activity has been reported with Steem.
Is Steem Secure?
Steem is considered one of the most secure cryptocurrencies out there. From its architecture to the development team, a lot of focus was given to the security to lower the risk of hacking attempts being successful. Here are the main things that help to keep Steem system secure.
- Using the delegated Proof-of-Stake consensus model.
- Identifying and using a highly tech-savvy Steem development team.
- Working on progressive updates that help to seal all vulnerabilities.
- Advanced encryption.
Is Steem Anonymous?
One of the attractions that drive people to cryptocurrencies is the notion of anonymity. Many people are interested in joining anonymous networks because they help them remain private even when moving large quantities of value. The architecture of Steem network targeted providing users with utmost anonymity so that they can have the confidence to make it a major payment network.
The main method of enhancing anonymity is encryption. Steem uses advanced encryption to ensure that no miner in the network or even third party can break and unmask users. Even delegates who confirm transactions on the network can only check the account balances and not the individual identities.
Has Steem Ever Been Hacked?
Yes, Steem network was hacked on July 1st of 2016 and about $85,000 worth of Steem Dollars and Steem stolen. Though this attack came at a point when the crypto was still very young, the Steem team used it as a critical lesson to strengthen its system. Their efforts have borne results because no other hacking attempt has been successful.
How Can I Restore Steem?
Many people in crypto forums out there are always seeking assistance on restoring their lost cryptocurrencies. It is important to appreciate that the moment you join any network such as Steem, the risk of loss is always a few steps away. However, it is possible to restore some Steem depending on the nature of loss. Here is a closer look at the methods that can be used to restore Steem.
- Loss through forgetting the private keys: In this case, restoration is only possible through acquiring the right keys. You should use the private keys seed phrase generated when you first used a Steem wallet.
- Loss through damage of Steem wallet: In such a situation, you will need to use a backup to reinstall the wallet. You can also get another similar wallet and use the private keys to reconcile it with the network.
- Loss through hacking and sending to the wrong address. If you lost Steem through any of the two methods, no strategy can be used to restore them. They are lost forever.
NOTE: The bottom line to the successful recovery of Steem is maintaining a clear backup, securing the seed, and keeping the private keys safely.
Why Do People Trust Steem?
The fast-growing number of cryptocurrencies has opened immense competition in the industry. Many people are faced with the dilemma of the cryptocurrency assets to buy and the network to join. However, the community has developed total trust in the Steem cryptocurrency. Here are the main reasons why they trust the crypto-coin so much.
- The crypto network is led by a tech team with a huge commitment to growth. This gives them the impression that they will keep growing the network and edging ahead of others.
- The cryptocurrency has been performing very well in the market. This is s demonstration of community approval as well as assurance of high ROI.
- It is one of the few cryptocurrency networks that do not have transaction costs. This operational design has made the crypto enthusiasts including followers from other networks opt shifting to Steem.
- As many cryptocurrencies especially the top ones appear to be approaching the climax of their growth, Steem is only gaining momentum. This means that people who come to its network are sure of enjoying huge growth in the coming years.
- It is one of the cryptocurrency platforms that have several tokens aimed at helping it remain stable in the market. Because one Steem Dollar is equivalent to one conventional USD, it implies that users can operate freely without worrying about high volatility in the crypto world.
- The Steem cryptocurrency allows users to use Proof-of-Brain properties and Smart Media Tokens to craft high high-quality content for their communities as opposed to managing blockchain. This leaves means that you can get as much as you want by crafting high quality content for your enterprise.
- The cryptocurrency is linked to the Steemit social platform which helps in two ways. One, it popularizes the cryptocurrency in order to keep growing its community. Two, it allows more people to join through content generation and consumption. You can simply post, comment or discover content to get rewarded with Steem.
History of Steem
While the history of Steem dates back to periods before Bitcoin was launched, many often track it back to March of 2016 when Steemit Inc was founded. This is the company that is responsible for Steem development, maintains the Steemit website, and funds all ongoing development.
- In March of 2016, the Steem whitepaper was released. This paper demonstrated how the Steem blockchain would work without charging clients transaction fees. It was a major deviation from the norm because no ICO was involved. The price of Steem was about $0.6 USD.
- By the close of May of 2016, Steem market capitalization hit $405 million. This made it the third largest cryptocurrency.
- On July 2016, a hard fork was implemented, and $1,300,000 of Steem and Steem Dollars were paid to Steem users.
- On March 15th, 2017, Dan Larimer announced that he was resigning from Steem. It has emerged that he opted out of direct operations of the network so that he could concentrate on bigger ideas for the network as well as new inventions.
- By May of 2017, over 170,000 Steem accounts had been created.
- By Mid January of 2018, the value of Steem rose sharply to reach $7 before shifting downwards to$3.6 by mid-February. Even at $3.6, it was still a remarkable improvement from the starting point of $0.6 in 2016.
Who Created Steem?
Steem was created by two computing experts; Dan Larimer and Ned Scott. Scott is a top advisor of APPICS (social media platform) while Larimer known for his crypto work especially in the creation of BitShares and EOS. EOS is another cryptocurrency that shares a lot of similarity with Steem though it is not targeted at the social media.
Many reports about Steem demonstrate that it was the brainchild of Larimer. Larimer holds a Bachelor of Computer Science from Virginia Polytechnic Institute and State University in 2003. In 2009, he was focused on discovering blockchain technology when he found Bitcoin and immediately started communicating with its founder, Satoshi Nakamoto.
Most of the unique applications in Steem are borrowed from his earlier work especially in BitShares. Larimer describes BitShares as a network, a ledger, a bank, company, exchange, community, and currency. He pointed that BitShares was probably 15 years ahead of time and that the world will finally get there. Now Steem is only tracing that continuum. It can only keep getting better.
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