The role of cryptocurrency in the dynamics of blockchain-based social networks: The case of Steemit - PLOS ONE

( June 16, 2022; PLOS ONE )

Description: "To shed a light on this complex network of intertwined layers, we adopt a data-driven approach, by analyzing Steemit, one of the first and most successful BOSNs. By gathering data from the underlying blockchain Steem, we have collected a large longitudinal dataset that contains the main social and financial activities of Steemit users spanning more than three years, along with data external to the Steemit platform: longitudinal data of STEEM value in the cryptocurrency market. "

A shift of paradigm is running over online social platforms: the over-centralization of these platforms is leaving room for decentralized solutions based on blockchain technologies, such as blockchain-based online social networks—BOSNs. Among the many unknown aspects of these techno-social systems, the objective of this study is to propose an analytical framework to assess the impact of the cryptocurrencies linked to a BOSN platform on the evolution of its social network and on the behavior of their users, in terms of production of content and/or its promotion through a voting and rewarding system. The framework has been applied to Steemit, one of the most widespread BOSNs, from which we collected three-year-long high-resolution data on its evolution along with the price of its main cryptocurrencies. On users’ activities extracted from these longitudinal data, we applied a time-series correlation analysis and a correlation analysis between the action allocation strategies and the obtained rewards, in the case of most central accounts. The analysis has highlighted pieces of evidence of the influence of the cryptocurrency price on users’ actions, particularly on actions that shape the structure of the social networks. Second, we also found highly rewarded users prefer actions related to the promotion of content rather than the creation of high-quality content, exploiting the reward distribution mechanisms implemented by the platform. These findings highlight that the shift of paradigm towards blockchain and cryptocurrency technologies might strengthen the influence of financial and economic factors rather than relational/social aspects on the evolution of these new complex techno-social systems.

I don't have time to read it tonight, but I'll try to read it this weekend. From skimming, the authors suggest that cryptocurrency prices drive social activity, but there is little evidence in their analysis to suggest that social activity affects cryptocurrency prices. Also, there's not much correlation between cryptocurrency prices and financial transactions (like transfers, powering up, delegating, etc...)

Interesting bit of trivia is that the highest correlation between price and number of comments is 94% with a lag time of 15 days.
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