I believe in the underlying philosophy of Steem, which is that content producers and curators on social media platforms should be compensated for the value that they create. However, I don't see why using a blockchain is at all advantageous for this purpose.
Firstly getting paid in a crypto currency is far less useful than getting paid in dollars. If i want to cash out my earnings I have to go to an alt currency exchange to convert my steem to bitcoin, then go to a bitcoin exchange like coinbase or circle to convert my bitcoin into dollars that can be moved to my bank account.
I also do not see why a company like reddit or facebook, which use traditional, proprietary databases, could not put aside a fraction of the revenue they accrue from advertising to pay the most prolific content producers in the same fashion as steem without the use of a slower blockchain based application.
While I see steemit being favorable for those in the niche cryptocurrency market, it doesn't seem to add practical value for the majority of individuals for whom it would be far easier to link their bank information to their social media account and withdraw their earnings directly from company that operates the social media platform.
Just wanted to get people's thoughts on the advantages/disadvantages of blockchain for the purpose of social media.
Hi,
I have just watched this video https://steemit.com/steem/@germanaure/the-tatiana-show-ned-scott-of-steemit-dr and I read the white paper the other day(click Steemit logo, top left of screen to access).
I'm no expert, but as I understand it, the blockchain has a couple of major advantages over the system you describe:
There are no need for advertisers and therefore advertising bias, it is the blockchain rewarding you and not a fickle advertiser, who might suddenly decide they don't like your content and don't want to reward you.
It is harder to game the system, the blockchain gives voting power sparingly and therefore you don't get a situation whereby advertisers are prepared to set up digital sweatshops of people upvoting content (like on Facebook)
We are all contributing to the blockchain and so even content that might not be "advertiser friendly" can make a valuable contribution.
The blockchain is generating wealth and represents the company, we can all be part of that in a way that we couldn't in the model you suggest.
Whilst it would be far easier to have your bank account attached, the fact is, this is a very easy route into the world of cryptocurrency. You are being given a front seat ride, in a really nice vehicle. You will have to go through exchanges, however if you are a successful poster, this will be become a moot point, as money, is money, is money.
Plus think of it this way, imagine if Facebook had started this way, would you be that interested in how quickly you could liquidate the assets that Facebook were giving you just for posting?
Maybe I'm totally wrong, like I say, I'm no expert, but watch the video, he comes on about halfway through.
CG
I'll address all your points as you broke them down:
Every company needs revenue. Social media platforms, which are free for users, require ad revenue.
You can implement the same stake weighted voting using some other resource as stake, such social capital - however you might attempt to define that.
Advertisers don't care about the content. They care about whether the content attracts eyeballs as well as whether the social media platform provides data that can allow them to most efficiently target potential consumers.
This goes back to my first point, which is that the blockchain isn't generating revenue, so how then can it be generating wealth? Additionally, as I mentioned in the OP, there is nothing technically stopping mainstream social media platforms from adopting this strategy of paying content producers and curators.
The only applications that utilize crypto currencies and are in some ways mainstream are those that allow you to link your bank account. The general consumer can't use crypto currencies to purchase everyday items. Its also too much of a hassle for the general consumer to go through various exchanges in order to cash out their rewards. In order for the platform to have the same utility in practice as in theory, users need to easily be able to turn crypto currency into cash.
Hi Malcolm; allow me to retort :)
Every company needs revenue - Indeed they do and this one will generate that revenue via a cryptocurrency that gains value as more people use the blockchain.
I'm not sure I understand the point, so won't comment
Advertisers don't care about content - Erm, tell that to Tiger Woods, Lance Armstrong, FIFA and just about any other large organisation that has had scandal. Under your model for instance; you might decide to do a whole series of articles on the evils of sugary drinks. The posts get popular, really popular, people start to notice and share. However Coca-Cola are a major sponsor of the platform, they get annoyed at how popular your posts are getting, so they have a quiet word in the ear of the platform. The platform, not wanting to lose a major sponsor, surreptitiously start removing your posts from the pages of certain demographics, to negate the chance of Coca-Cola advertising to the same people you are telling not to drink their crap.
That's a best case scenario, the worst case is that they start to censure you without your knowledge, so your posts, get edited to sound a little less cutting than you first intended. An algorithm stops you ever seeing these edits.
Sounds far fetched? Google the following term: Facebook engineers admit to censoring Oh and do that in an incognito Google window and look at the difference in results. Now those stories are talking about Mark Zuckerberg and Facebook in general censoring for political reasons, however faced with losing contracts, news givers will listen to advertisers. This has rung true since the first company paid the first newspaper money to advertise.
OK, I'm not going to labour this point, because I'm not an expert, but as I understand it the blockchain is generating wealth by creating Steem Dollars which (as it stands) have a monetary value. These Steem Dollars are then distributed ad infinitum.
This argument is a good one and I have recently written an article on here addressing those points, if you're interested you can read it here if you're interested.
What I would say though, is that at one time, I was a general customer and then I heard that something I buy regularly was offering 33% off paying by Bitcoin. It was painful to go through the process at first, but once I did it one or two times, it was fine and I became a cryptowarrior :).
Ultimately, if you want to use this system as a way to a quick buck, it will disappoint for the reasons you mention and more, however if you want to get in at the bottom on an innovative platform that may well change the way we blog, then Steemit is for you.
Also like you mentioned briefly, other platforms can and will use the Steem blockchain, as once Ned and Dan reduce their stake past a certain point, the blockchain becomes available to whomever (I think). So hey, it's an experiment, a social one and one that I personally think can work. Maybe I'm wrong, only time will tell.
The reasons for being on a blockchain are many, but perhaps the single biggest is that "ad revenue" only represents a small part of the potential value of an ecosystem. Facebook's profits just topped $1 billion dollars. With revenue of $22 billion, it pales in comparison to the market cap of Facebook which is $332 billion dollars.
So if Steem were to be as successful as Facebook then each year it would allocate rewards worth $33.2 billion dollars, which is 33x the rewards that Facebook could pay its users by distributing 100% of profits and greater than the $22 billion in revenue facebook sees. Early on facebook couldn't have possibly bootstrapped its ecosystem if rewards depended upon actually having profits.
The secondary reason is that a blockchain currency is inherently more valuable than a centralized currency. Blockchain currencies are decentralized and largely independent of governments. So in addition to the "business value" that Steem creates, it also creates Monetary Value.
If Facebook shares could be used as money it would significantly amplify the demand for those shares. Furthermore, if owning Facebook stock gave people power over facebook curation there would be still more demand and value.
Looking at things through the lens of sharing ad revenue is missing 99% of the value of the platform.
The reason that facebook has such a substantial market capitalization is because of its earning capability. I have not heard a single revenue stream for steem presented, so comparing steem to facebook in the way that you have doesn't make any sense. You can't really base the success of a company on the speculative interest of a crypto currency - it certainly didn't work for bitshares. If the platform doesn't have revenue, don't expect for there to be investors to bolster the market cap upon which the payout scheme depends.
Additionally, I think it interesting that you talk so frequently about the subjectivity of value and make a claim such as "a blockchain currency is inherently more valuable than a centralized currency." A centralized currency with more widespread use than a blockchain based currency is indeed more valuable to the general public. If the use of steem and steem dollars is confined to users of steemit why then does steem have to be a blockchain based currency. Venmo works perfectly fine with crypto currencies.
Yess!!
In that model how to you evaluate subjective values of posts? The idea of using the blockchain is that processing all of the social transactions happens as part of a decentralized system that's made specifically to encapsulate the social capital of those interactions in a cryptocurrency. Even if you decided to let people cash directly out to fiat, you still need a way to be assigning valuations to interactions on the site, and for that a blockchain ends up being the simplest and least centralized mechanism available for that.
Then there's the benefit that social sites, microeconomies, and by extension cryptocurrencies all rely heavily on network effect to succeed, so by baking them together it makes for a pretty potent combination should the community continue to grow.
What if those Steem Dollars could be spendable directly from a crypto-backed debit card? Then there's no need for conversion. I have a feeling this option will arrive at some point. I have Shift Card and a CoinsBank card that allow me to spend my Crypto (BTC for now) right at the register.
You are not seeing long game.
It prevents abuse of power, it's auditable and accountable. Which is something other platforms can't be. Also, it allows to distribute the money not from a central point but from the other users directly. For the moment, there is no STEEM Dollars to Bank...but it will come. Someone could use a service like shapeshift that allows people to buy things in bitcoin directly from steem dollars is a possibility.
In any case, it's an easy door into the world of crypto...which might accelerate the adoption of bitcoin to new niches.
Bitcoin is better that the dollar