Bitcoins and Steem

#### I had a conversation with my dad earlier talking about Bitcoin and Steem, which prompted me to make this post.

Most of us here are fairly familiar with the cryptocurrency landscape. Some more than others, but there’s a general level of knowledge regarding what a blockchain is, what its function is, and what it can do for us. After all, we’re using the Steem blockchain every time we post (some more than others; I have law finals so I’ve been woefully behind on posting). With the recent price surges in both Bitcoin and now Steem and Steem-Backed Dollars (SBD), I thought it prudent to take a look as to why Bitcoin is surging ahead in price and has been for all of 2017, and what that means for Steem.

Image credit Pixabay

**As many others have pointed out, Bitcoin is not a very good transactional ledger**. As of now, the blockchain can handle seven transactions a second, which is appalling. Given that Bitcoin’s sole purpose is to record transfers between wallets, you’d think that alone would have signed the death certificate for the chain long ago. So why hasn’t it?

– **Bitcoin is Finite** – There are something around twenty-three million Bitcoins that will ever exist. That’s it. Once the coin cap is reached, there won’t be any new ones. Miners are going to have a hell of a day once we get there, and, since the algorithm to sign a block increases in difficulty with each block signed it will take a while, it won’t be happening any time soon. Still, this brings up a very interesting point: *Bitcoin is a scarce digital asset.* Like gold, there’s only so much of it that’s ever going to be around. Even if it became unseated as the primary medium of exchange between coins, it would still gain in value over the long term by virtue of this upper bound of how many there are.
– **Bitcoin is Popular** – This one seems sort of a throw away bullet, but let’s be honest. Bitcoin is the king of crypto right now in large part because *most people have heard of Bitcoin.* As I and others have pointed out, it’s not a particularly efficient blockchain for transactions. Steem is far better suited for handling volume, and that’s without any transaction fees to throttle transactions. Still, Bitcoin has been, and still is, the universal medium of exchange. Anyone who’s used Bittrex knows this. To buy coins, you have to buy Bitcoin. Until that changes (and I don’t expect it to in the very near future), Bitcoin is going to continue to appreciate in value.

Must READ:   Ethereum social news alert — December 1st, 2017, 23:40

**What does that mean for Steem?** As one of hundreds of coins, Steem certainly has its work cut out for it. That being said, I think what has been demonstrated as possible with the blockchain through and soon with SMTs provides all the use cases you’d need to adopt Steem for more than just blogging. The transaction rate alone lends itself to daily use by individuals, and the ease with which transfers happen (to usernames, rather than complicated addresses) facilitates that day-to-day use. Moreover, the blocks can store a tremendous amount of information, well beyond wallet and block addresses. With the recent surge in price for SBD and, to a lesser extent, Steem, there’s going to be more exposure. More exposure means more people thinking of new ways to utilize the chain.

**I don’t know where we’re headed in the short term, but in the long term, we’re going up. I’m just glad I get to hang on for the ride.**

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