The general public in the common days are not that interested in Blockchain nor directly in Cryptocurrencies lately, as the price is still recovering from the latest rush in 2017. We can check this trend also on Google, where the keyword 'bitcoin' had its peak in December 2017.

Source: Google Trends

1. Understanding the history

Due to this fact it had been difficult since the end of 2017 to get fundings for blockchain-related projects. Even projects that got funded and were not able to encash their fundings into FIAT found it difficult to keep their projects running. To understand this kind of environment we need to understand how blockchain projects had been funded.

• The main funding method had been Initial Coin offerings (ICO)
• A traditional ICO at that time was just to offer a blockchain project-based token (likely based on ERC-20) without having any blockchain available
• Almost all of these projects were offering a solution or vision that had been concentrating on the Blockchain technology itself. (Speed, security, economic model, minting etc.)
• The funding started with a piece of paper and not a working prototype.

So if you remember how a traditional Venture capital company would invest in a startup, the Blockchain ICO world was more a marketing crowdfunding on steroids, like the wild west time before the Internet bubble. As always, this kind of investing started a new era of innovation but also buried a lot of burned money on its way.

Nowaday with regulations from governments and the learning curve from investors, it is difficult to start an ICO in general and keeping all the regulations. Not to mention the get the attention of potential investors.

The biggest problem even for successful blockchain projects was that they faced the issue that a working blockchain itself is not enough to keep a project running nor the price of its main token. There is still not a single token in the blockchain environment that is not affected by the main driving force of Bitcoin.

2. The nature of Steem

Steem is a blockchain that had been co-created by the founder of EOS Dan Larimer and Ned Scott as a combination of a Blockchain, community, and social media. It is the home for crypto-enthusiast, free speech seekers and investors. As part of its function as a social media channel, the community on Steem is diverse in interests and opinions which is also driving the communication between the members.

Currently, the main functionality that Steem provides is a blogging platform similar to Medium but decentralized and censorship-resistant. This blogging platform can be accessed from different platforms where the main is Steemit.com, which is directly offered by the company Steemit Inc. which is behind the development of the Steem Blockchain.

A big difference between a normal blogging platform like Medium, Huffington Post or a blog based on Wordpress is that you can get rewarded directly by other users when they like your content. The reward itself is created trough inflating the cryptocurrency Steem and distributing it on a daily base to their users. Other cryptocurrency projects are usually distributing their inflation only to miners (nodes), but the Steem blockchain is empowering their users to distribute the inflation among themselves.

3. The reality of Steem

During the peak time of the blockchain rush, the user and account numbers for Steem increased quickly and also the transaction volume. But after two years of low and a falling price of the Steem currency, the blockchain faced several issues similar to other blockchain projects.

• Falling user numbers as a blogging platform
• Investors leaving
• Cash burn rate for Steemit Inc. (the company developing the blockchain)

Steem had no ICO but only a short pre-mining period, which means that the developing force behind the Steem blockchain (Steemit Inc.) needs to sell its own token on the market to keep the developing running. But based on simple market economics and similar to stocks, if you have more people selling then buying, the market prices are falling. This had several impacts on a project like Steem, as there had been no cash stocked and a lower market price would mean lower income and resources to use. It resulted in a restructuring of the company Steemit Inc. and also in spending a lot of resources to create fast and instant income streams besides selling the own token. The results are not compensating the incomes selling their own token at high prices, but it seems that Steemit Inc. is now again able to concentrate on developing the Blockchain to the next level with a small but dedicated team.

4. The community behind Steem

Besides all the technology and cryptocurrency driven issues like price development, the real strength for Steem is a human factor, the community.

It is a niche and not the biggest one, but a very dedicated and specific community that is able to drive their own innovation. This is much more important than the technology behind a blockchain because a flourishing community is key for any social media service to survive until it can prove and scale itself.

We have seen big companies failing in understanding the social behavior of users like Google + and seeing that even big Facebook is missing trends about a Chinese social media app called TikTok. It is showing that there is a difference between understanding the technology behind a service and understanding the community. Also, that is is not really easy to create a service to recreate a specific community.

So what are the specifics that are making the Steem community special?

• Decentralized community that is driving and deciding the evolution and innovation of their own platform. (Steem DAO, Community Witness involvement for Hardforks)

• Creating diverse sub-projects with active users based on their platform (@splinterlands, @steemhunt and much more)
  

  

• Running blockchain project with active users for over 3 years.

Community members have created successful applications based on the Steem Blockchain and have driven the innovation on their own. And it is the only blockchain community that was able to develop its platform to something that they are seeking for.

5. What is coming next

The Steem blockchain is currently preparing the next evolution called SMT, which is a Smart Media Token that allows users and projects to create their own token and communities based on the Steem Blockchain. With this development, there are a lot of changes coming to this blockchain projects, which can be projected like followed.

• Perfect solutions for niche communities to create and reward their members.
• Solution for existing communities to add the ability to distribute rewards.
• Discussion about keeping Steem as a reward-based token or move this function to SMT's
• Economical discussion and implementation with the community how the inflation of Steem could be handled in the future.

As you can see, Steem is not only a blockchain project where users can start their own business but also can raise their voices to influence directly the economic impact of their macroeconomic cryptocurrency environment. This is a phenomenon that has never been sited before and which is going to be an effective booster for the project when cryptocurrencies are going to be a common issue again.

Disclaimer: The author of this article is invested in Steem and had been active on the platform about two years. This is article should be used only for information and is not for any kind of investment advice.

This article had been shared at Medium for better outreach.

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