While it would appear that the price of steem is set by the open market, the reality is that the value of steem comes from the user base. The true value is being set by the amount of steemit users. The steem price on the open market simply fluctuates according to what was the last price someone was willing to trade a steem coin for another currency or coin. However, the price is forced up by demand or rarity. As the steemit user counts grow, the need for more coins grow, with that extra demand, what people are willing to pay for a coin goes up. This demand is countered by the amount of steem being created.
So, these are not acurate numbers but let's say there is 120 million coins in supply, and this increases by 480 million a year, or approximately 4 times it's present supply. Let's also say that we have 70,000 users. Simple math would suggest that our user base would have to grow four times larger over the next year (the same rate as the coins being created) just to keep the price of steem constant. This does not factor in steem power, because a large portion of steem being created get's put directly into steem power. The simple math above also doesn't factor in how much is right now being held in steem power by all the users. So what's the real supply numbers???
All that I can say conclusively is that the value of steem comes from the growth and size of its user base. The size of the user base needs to increase until its user base demand for steem far out weights the rate of steem being created. And the size of the user base increases because of good content. Good content draws more participants, and keeps them here once they join.
So to simplify all the above: A stable or growing steem price comes from a constant increase of users, in my opinion, because of quality content.
(an example of good content is my new comic "Steem Funnies" .. please check it out for a quick laugh https://steemit.com/cartoon/@quickfingersluc/steemit-funnies-3-my-colonoscopy) I know I just ruined my comment above by a desperate blog plug. But come on, I need some upvotes :)
So if we can not keep up this rate of growth then the Steem would die? I'm not developer and like to keep things simple. This kind of post by Dan makes me think of the negative things that could happen. I have never been and will never be the doom and gloom kind of person but why even bring this up?
In my opinion were barely even started yet. 70,000 users is nothing compared to where we'll be in a year or two.. and if the steem coins get created at rate of 480 million per year that means the follow year will only double supply, and then the following year will only increase it by a quarter and so on.. So once the user base grows, the price will soar.