Steem Vs Bitcoin = Betamax vs VHS
If you are here then I assume that you may know a little about crypto currency or maybe you are just curious about this whole crypto thing and want to get to understand it a little bit more.
You could be one of my long suffering but loyal readers that will follow me to the ends of the earth because you know that eventually you will learn something useful. Thank you, folks.
Whatever your motivation for reading this let me state quickly that if you are the type that sticks your fingers in your ears at the mere mention of crypto. Then this is especially written for you too.
Short definition: Crypto currencies are money.
They have all the attributes (and more) of other forms of digital money. For example, you have money in the bank, building society or post office. It’s not really there physically is it? It is held on a computer in a digital format.
The main difference between the old and new system that may be of interest to you is that crypto currencies can be moved around the world without the need for any banks at all. You can carry them on your phone, tablet or computer, your phone or laptop has become your bank. This is known as a peer to peer transaction system.
You have probably been using your computer to do your banking for many years already. This is just the evolution of that defunct and costly system.
Now if you wanted to buy something or send some money to a relative overseas and you wanted to do it immediately Now you can do it yourself and it has virtually no costs attached. You have become your own 24 hour bank.
The money goes directly from your phone to their phone with no middle men taking a huge slice out of it.
Using the existing money exchange system is slow and costly. It is no surprise that the fastest adopters of this technology are developing world economies where every single penny counts towards your family’s survival.
So now you know the fundamental difference between these old and new digital currencies. What is the best one to use?
Security: The ‘money’ you have in the bank is not that safe at all and governments can at any moment freeze or seize your funds. Don’t believe it? It happened in October 2017 in Greece.
Unless you have been living under a rock somewhere just about everyone more or less has heard of Bitcoin.
Bitcoin is one form of digital currency (money) which has been around for a number of years and has become well known for its wild volatility and massive surges in price.
I’m not going to put today's price because it changes by the nanosecond. OK just for historical purposes 1 bitcoin = $8,747.41 25th November 2017. Last year it was worth $751. Bitcoin went up $150+ while I was writing this post!
So now you know a little bit about crypto currency. Let’s move on.
There are currently over 1172 crypto coins as of 6th November 2017 Wikipedia
Are all crypto coins worth a lot of money?
Well no. At least not at this moment in time. We have to ask this question. What is the use case of each coin? In other words. What does this coin do that another coin doesn’t do?
Bitcoin has first mover advantage which means it was the first crypto coin that was adopted by the public and it’s use case is that you can send it anywhere in the world without using a bank thereby saving a lot of money in transactions fees and keeping your business private as Bitcoin accounts are anonymous.
This is where a lot of the bad press about crypto currencies sprang from. Headlines like “Drug dealers and arms traders use crypto to hide their trails” Silk road and the Dark Web.
It might make great headlines but really had nothing to do with crypto coins themselves. Just what uses they were put to.
This may have been true and there were some high-profile cases in the earliest days of this technology but things have moved on and some crypto coins are now seen by a growing number of people as an asset class that is a good store of value. And more importantly. That they control.
Steem vs Bitcoin (Use cases)
Steem is a crypto currency coin which has many use cases. It has a website steemit.com where the content contributors get paid in steem coins and other tokens like steem backed dollars(SBD)
You can transfer SBD instantly out of the steemit website into an exchange and into your own bank account in a matter of seconds.
SBD are pegged to the USD on a one to one rate with a slight variance of one or two cents. You can even get a debit card and load your SBD directly onto the card without going through the banks at all.
How much members of the website get paid is decided by two primary factors. How much money you have invested in steem and by the other content creators on the platform voting for your posts.
Of course, you can just blog on steemit and earn money without investing any money at all. Most people take this route as they are trying to make some money and do not have anything to invest other than their time and skills.
This was one of the primary goals of the developers. Ned Scott @certainassets and Dan Larimer @dantheman Look them up on twitter. They made a platform where anyone can earn from their skills and level of effort.
There is a lot more going on with steemit than this simple explanation and you can read everything about steemit on the website. Everything is open to scrutiny and is completely transparent.
So, it’s use case is clear. It is creating wealth for those people who are creating engaging content and by their interactions with the community on the steemit website. You get paid for commenting on posts too.
As we have seen above. Bitcoin’s primary use value is in its ability to free people from having to use banks to move money around and it is also a store of value.
The difference between Steem and Bitcoin at its simplest is that Steem and SBD transactions are almost instant whereas Bitcoin can take anything from 10 minutes to many hours or even days to confirm payments.
When you need money fast then Steem and SBD is the obvious choice. But very few people have heard of Steem and therefore widespread adoption hasn’t happened…yet!
The two coins have several other differences but the comparison to Betamax versus VHS tapes will now make sense at least to people of a certain age.
Betamax and VHS were technologies for watching and recording films at home. Betamax was considered by some as a far superior technology and yet it failed in the market because VHS was cheaper and was adopted fast by the public.
The public as we know don’t really care about the technology. All they want to know is that it solves a problem for them.
Steem is in the same position today. It is without doubt a far superior technology compared to Bitcoin with far more use cases that will be rolled out in the coming months and years.
In spring of 2018 steemit.inc will be launching Smart Media tokens (SMT’s) These are tokens that any website can add to their comments sections and thereby pay the people that comment on those websites.
Think of it as a loyalty system that rewards people that visit your website. That is just one of the many uses of steem that are in development.
The second issue for steem adoption is that not everyone is a blogger or vlogger and they do not want or know how to write a blog for the public.
Steemit developers are working on a twitter type app called Zappl which will allow you to upload a photo and a short message and get paid for it.
The SMT’s will make this blogging aspect irrelevant for many website owners as you will be able to add them to any website and when your visitors or readers come along you can actually reward them for their loyalty by giving them some tokens.
These tokens will be linked to the steem blockchain which generates the money. If you are wondering what the blockchain is and how it makes money that can also be seen in action on the steemit website.
I don’t want to overload you with information at this point so I will leave it there for now to let you get your head around these ideas.
Next time we will look into Bitconnect another technology that has had a terrible press. With accusations of it being a scam?
Update: Bitconnect has ceased it's lending operation. In a statement on their website it explained the reasons.
Changes coming for the Bitconnect system - Halt of lending and exchange platform
I hope that this has been of use to you and that you know have a better idea about this whole crypto currency movement that is rapidly taking over the world.
Images courtesy of Pixarbay
SMT image courtesy of Steemit