Crypto-Economics: A Steem Example vs Centralized Platform
As I was writing my post this morning about the Dlike bounty, it occurred to me this would be the ideal opportunity to contrast what is going to be the norm in the future.
Dlike is a Steem-based application that enables people to post links they find interesting and informative. This is similar to applications such as Reddit and Pinterest. The users of these applications contribute a great deal of activity that is extremely valuable. The only challenge with this is where the money goes.
When looking at the different paradigms, we see a major difference. Under the centralized structure, value that is generated from the users is filtered to the managers and shareholders. All proceeds flow inward and upward.
Pinterest had a value of $12.3B in 2017. According to the filing, here are the salaries and stock of the executives.
https://techcrunch.com/2019/03/22/this-is-how-much-money-pinterest-execs-made-last-year/
The filing did not state how much the executives would receive once the company went public. What it does show how much is directed upward.
We also see the IPO process taking a chunk out of the value. Offerings of this nature are bought to market by Wall Street banks. Not only do they earn large fees but also are given a lot of stock. This is often sold to their better clients who stand a great chance of profiting from the initial moves.
Here we see the trend in users of Pinterest.
https://techcrunch.com/2019/03/22/pinterest-drops-its-ipo-filing/
This is impressive. As the article just linked shows, the revenues of the company grew also. The site sells ads which, like the existing model, is based upon number of users. The greater the traffic, the more these companies profit.
My question is how much of this value are the users receiving? Are they financially partaking in the growth of the system? Do you think shares were set aside for them?
The answer is obviously not. The users provided their time and activity for free. One could state that they received the enjoyment and recreation of the site. However, this pales in comparison.
Today, there is a better way.
What if the same effort by the users was put into @dlike? This application rewards users in both STEEM and Dlike tokens. Dlike is a distributed application built upon a distributed blockchain. Under this scenario, the value is spread throughout the system.
Here is an example of what it looks like.
Under the centralized system, the value is generated at the endpoints and works its way in. This is where the executives and shareholders are. Most, if not all, of the value goes to them.
When a system is distributed, the value is spread throughout. Each person who has a stake in the system benefits.
So, once again, why would anyone use the centralized platform when there is another option?
The answer to this resides in the fact people are not aware of what is taking place. Distributed systems which can be monetized, are a novel concept. Cryptocurrency is what makes this possible.
This is what Crypto-Economics (or token economics) offers.
Dlike distributes tokens to users for their activity on the site. Users can post links and earn the Dlike token. Since it is on the Steem blockchain, the main Dlike account upvotes posts providing rewards out of the Steem reward pool.
The tokens are distributed as an investment in the growth of the platform. As more people contribute, the value of the network grows. This means each token should increase in value over time. The ones who are benefiting are not Wall Street banks, investment funds, or even management.
Instead, we see a model where everyone who is holding Dlike tokens benefits.
At the same time, since this application is built upon the blockhcain, activity on Dlike enhances the value of the Steem ecosystem. We see a repeat where the additional value is distributed to all stakeholders.
We are going to see this repeated over the next couple of years. Distributed systems offer a great deal more. It will take some time but the benefits are too much for the average person to pass up.
Once the masses learn about the advantages of distributed economies, they will not hesitate to use them.
If you found this article informative, please give an upvote and resteem.
Hi @taskmaster4450!
Your post was upvoted by @steem-ua, new Steem dApp, using UserAuthority for algorithmic post curation!
Your UA account score is currently 6.246 which ranks you at #236 across all Steem accounts.
Your rank has dropped 18 places in the last three days (old rank 218).
In our last Algorithmic Curation Round, consisting of 221 contributions, your post is ranked at #6.
Evaluation of your UA score:
Feel free to join our @steem-ua Discord server
The answer that as a user one should use DLike should be a complete no-brainer and not require more than a millisecond of thought after all the facts sink in. But I'm afraid we have our work cut out for us, as unbelievable as it sounds, to educate the public about the superiority of decentralized platforms from the user's point of view.
When I tried to tell my friends and acquaintances about Steem and that the smart move would be to have their online conversations on Steem rather than on Facebook, what I got was mostly, to my utter astonishment, a wall of deafening silence. One guy said the earnings here would be peanuts anyway, so why bother.
It is possible to educate public but it will take time and effort. Above all, it comes down to finding the right niches where the advantages of decentralization are so obvious that they cannot be logically denied. Digital assets in areas like gaming and gambling are obvious applications. Intellectual property and proof of ownership and authenticity are others. Superior apps with superior usability that leverage the strong points of decentralization are key.
We have the disadvantage in that people are already settled in their routine... and, honestly, until something actually upsets them, they'll be tough to move. It's like moving house to one that is slightly better... at some point the advantages aren't worth the effort of uprooting everything you're already established... so we'll just have to keep building until the advantages are clearly worth the effort.
It is going to require the idea of crypto getting into the psyche of people. It is really a catch-22 we find ourselves in: this paradigm will not kick into overdrive until we get enough people involved and the people will not get involved until this kicks into over drive.
As I said below, it literally is one user at a time....
It will happen one user at a time.
That is how the network effect is kicked off. Until that time, it is just a slow grind of adding one after another. Word of mouth is the best way even if it is only 1 out of 10.
I agree on that. We just have to keep plodding along. Adoption follows an exponential curve and we are pretty much on the flat part.
Telling people about what's great about decentralized versions of their favourite sites and stacking up on tokens sometimes makes me sound off like a Jehova's Witness going door to door and getting door after door slammed in my face despite the fact that I know I'm making perfect sense.
I mean, anyone can replace their step counter/sports tracker app with Actifit and get paid in crypto. However little that may be per walk/run, it adds up. Especially when you apply that model in as many areas of your life as possible.
But if you go door to door with Actifit turned on....! Kazillionaire!
It seems like there is Actifit's market...Jehovah Witnesses....
Get Paid to Spread the Word!
It could go over big.
This. Go with God.
Ka-chinnglionaire!
pinterest is still a thing?
My wife is on it literally every night.
your wife is not on steem o.O?!
Very much so. 250 million monthly active users. It's in a completely different league than DLike. For now.
Estimates are it is going to be a $20B thing on its IPO.
Top
Posted using Partiko Android
With as successful as steemhunt has been (pretty sure there is a centralized version of that right?) Im suprised no one has tried a pinterest dapp yet on the steem blockchain.
Looking forward to see what dlike has to offer.
Posted using Partiko Android
There is a centralized version of Steemhunt. They blew it away in the first week.
It is not a very large site in comparison to some on social media. I nice niche but nothing like what Steemhunt is doing.
Continues to show how we are the products on these centralized platforms. However, curious to see the valuation as Pinterest is being assigned about $10 per MAU. It makes out market cap seem more valuable which could make sense on a relative basis.
Posted using Partiko iOS
Very true. Going from memory, they had about a $3 per user revenue rate which, depending upon what you feel that is worth, could make the $10 MAU you cited well within reason.
Thank you so much for participating in the Partiko Delegation Plan Round 1! We really appreciate your support! As part of the delegation benefits, we just gave you a 3.00% upvote! Together, let’s change the world!
It's funny you wrote this as, after your earlier post about dlike, I came on here to read the white paper. I'm currently going to see people in my home town to talk to them about blockchain technology and steem because it has the potential to address many of the challenging questions we are facing today. Dlike would be perfect for collecting together posts about examples that illustrate how steem works, different communities etc etc, so I could flip through the different boards under my profile, as I discussed different aspects of steem. The ease of use makes dlike perfect for explaining concepts to outsiders, and providing a simple way in to steem. I can even provide them instantly with accounts nowadays from the ones I have claimed. I have asked when boards are going to come, and when posts will be saved to my profile, so people can see straightaway how it can be used (and I have all my resources in one place). So, I'm hoping the white paper is going to tell me this.
This post has been included in the latest edition of SoS Daily News - a digest of all the latest news on the Steem blockchain.