Steem – A Centralized System Backing a Decentralized Cryptocurrency
Steem is a cryptocurrency that has gained a decent following since its release through its platform, Steemit. This is a system that allows anyone to make posts and earn money (in the form of Steem) based on others voting up their content. But this system has brought about a controversial outlook when it comes to cryptos.
A Centralized System for Earning
Votes on content are what bring revenue to users. But it’s also based on a user’s power, such that those with more power (that hold more Steem) are those that contribute the most towards giving other users money with votes. Essentially, the more you hold, the more weight your votes have. Looking across the posts, a very common thing you’ll see is that some users will have a ton of votes and little to no revenue, yet someone else can have a single vote and have hundreds of dollars given to them. This is that system in play, and it’s what creates a centralized system – rather than everyone having the same chance and value, those who were early adopters can easily manipulate who is being paid from the system and how much they are paid, in turn helping them gain a bigger piece of the pie and having more power after each time.
Is the Voting System Manipulated?
It’s extremely difficult to tell for certain whether or not Steemit is manipulated, but from the outside, it does not look like it. That said, the issue here is the unfairness due to having a centralized system for paying out Steem – even if it isn’t manipulated in any way, those that are “lucky” enough to get a vote from a major holder are going to make a lot of money, while those that make posts that everyone else loves end up with nothing. For a site that claims it wants to pay out to those that create the best content, this just doesn’t make a lot of sense. Putting everyone on the same level would be a great solution to this problem.
Is the Currency Still Decentralized?
Steem is decentralized, just like most other cryptocurrencies. While the method of obtaining (at least through earning) is not, the usage, holding, and transfer of them still is. As such, when looking at it from a crypto standpoint, it’s on par with others, such as Bitcoin, Litecoin, etc. Assuming Steemit keeps its Steem (pun intended) going, it can still be a fairly safe place to hold funds and ride out the waves. Just know that there are no promises with the system, and due to how it’s handled, it could go either way at any time.
Boosting Your Power
If you plan to get involved with Steemit, you want to increase your Steem Power to gain more voting power. This will not only pay out more when you vote up other content, but you will also get paid for doing so, a win-win situation there. Along with this, taking part in not only curating new content, but also voting on other content you like, is beneficial in that you are rewarded for both actions. If you plan to join for free and just dig in, having a solid following beforehand is pretty much essential – it will help counteract the effects of centralization when it comes to vote power.
