The market watch saw Steem reaching the $5 mark on Wednesday, an impressive increase from its value of 25 cents on the 8th of July, making it the third-largest cryptocurrency after Bitcoin and Ethereum. The crypto market saw a slight price dip to $4 on Friday, following Thursday’s official announcement of a platform hack.
The team behind Steem launched the coin as a reward incentive for the users who publish content on the Steemit social media platform. Users receive tokens based on the popularity of their posts allowing users to profit from content creation - the higher popularity, the larger the token reward is. Also, those who recommend content receive rewards based on the popularity of the recommended post.
Ned Scott, the co-founder of Steem, stated that even if people are spending time and effort on social media platforms for free, they should get paid for the work they are doing.
The business model of the new social media platform has been praised as revolutionary by some, yet others believe that it lacks sense and even consider it a scam.
Members of the crypto community have raised concerns that the token is controlled by Steem’s founders with an approximate amount of 50% of the total float, causing the price surge. On Friday, Steem’s market cap reached $330 million.
Scott, joined by his business partner Daniel Larimar, has previous experience with cryptocurrencies. Lamiram was part of BitShare’s team for several years, which reached a market cap peak of over $60 million at the end of 2014. Later, its value collapsed.
To answer any scam allegations, Steemit’s founders stated they’ve created platform features that are encouraging users to keep their coins, like Steem Power. The feature grants users more influence and promotion powers if they agree to hold their tokens.
They added that they are proud of the accomplishments of the platform, and the team is excited about the upcoming developments and features.