Valuing Cryptocurrencies and Content Creation: Enter Steemit

On the eve of this Thanksgiving, I am grateful to have discovered Steem. I imagine that I am not the only one trying to explain cryptocurrencies over turkey and cranberry sauce. Before being able to fully explain blockchain technology, words such as “bubble” and “tulips” enter the conversations. At the time of this post, one bitcoin is worth about $8,200, about 1,000% higher than it was the year before. So I am not sure if I am early or late to the party. But here I am writing this and here you are reading it. So let’s open something bubbly and toast to emerging technology and problem solving.

In 2011 when the Huffington Post sold to AOL for nearly one-third of a billion U.S. dollars, I and some colleagues were the attorneys representing the class of approximately 9,000 Huffington Post writers. The issue in the lawsuit was essentially: was there a legal obligation for Arianna Huffington and her private investor friends to share their profits with the writers such as Jonathan Tasini who built the site? Long story short: the Southern District of New York and then the 2nd Circuit Court of Appeals said, “no” meaning that the “thank you” e-mail Huffington sent to her writers after the $315 million sale was sufficient, or so was how the judges interpreted the law.

Writers cannot pay rent in “exposure,” which was the currency that Arianna Huffington said she gave the writers. I believed this to be hogwash all along, as it was truly the writers who brought the exposure to the Huffington Post (e.g. have you ever seen a post on facebook or twitter “check out my post on HuffingtonPost.com?"). My purpose here is not to try and re-litigate the case. Rather, my purpose is to applaud Steemit.com for solving a problem.

Since 2011, we have witnessed two phenomena: the public stock offerings of social media companies such as Facebook and Twitter and the rise in numbers and popularity of cryptocurrencies.

A lot of crypto currencies make no sense to me – e.g. I am not sure what you can do with Big Boobs coin or many of the other thousand-plus coins you can find on coinmarketcap.com. Others I find fascinating such as Factom, Cardano and Ark (not to mention Bitcoin, Litecoin and Ethereum).

What is a crypto currency worth? What is a pile of gold worth? It seems one common answer to these questions is “whatever people will pay for it!” Why would someone pay for a “coin” that is represented only in sequences of zeros and ones? The answer can be a circular “because they do” or because, as I believe, they solve a problem.

Steemit.com seems to be solving the problem of lack of compensation for writers who develop content. Youtube.com got it correct it seems in solving the problem of how to compensate content creators in video-world. Facebook, Instagram and Twitter seem only to compensate shareholders and perhaps metaphysically their users in that they get to use the technology (even if mostly enriching the shareholders).

Steem, the cryptocurrency behind Steemit.com, is a cryptocurrency that rewards content creators and curators. I hope to write further posts here in the future and thank you for your interest in my first post. And happy Thanksgiving.