The blockchain based social media network; Understanding Steemit
Steemit is revolutionizing social media by directly rewarding its content creators directly and making it in a decentralized manner. - Antonio Solá
In the age of Social media — Likes, Shares, Retweets, Favorites — all have economic value. Their worth lies, in part from the ad revenue pegged to clicks, as well as the fact this content is highly visible and reaches users in a way that is grabs their attention (footnote to value of attention) and can be persuasive.
Because we spend our precious time viewing ads and creating value (through content) on these networks, in some sense we are more like their employees rather then their consumers. In aggregate, all of our activity on social media generates billions of dollars for companies like Facebook, Twitter, and Reddit. This value floats upstream to the firms and completely escapes the hands of the individuals who are the ones actually creating value for the network.
So what’s the solution to this?
The solution is to directly apply the principles of free market and democracy to social networks. This allows users to receive a return on their investment of time, content creation, and ad viewership in common networks like social media.
Enter Steemit
Steemit represents one of the first forays into this new model of social media. In its user interface and core functionality, Steemit functions in a way similar to Reddit, but rewards its users for creating and publishing their blogposts, images, and commentary. Since its launch, Steemit has quickly grown from a market cap of $7 million USD to a high of $380 million.
The network is built on top of an open sourced blockchain, called ‘Steem’ which functions as a cryptocurrency that is pegged to the US Dollar. Users are distributed steem from other users for producing highly upvoted content. According to its whitepaper,
Steem aims to support social media and online communities by returning much of its value to the people who provide valuable contributions by rewarding them with cryptocurrency, and through this process create a currency that is able to reach a broad market, including people who have yet to participate in any cryptocurrency economy.
In order to participate in the network, users must add liquidity to the network, in a way conceptually similar to the process of investing in a company. Equivalents of debt (with guaranteed interest, like bonds) and capital stock, and convertible notes are integrated into the framework of the network with the respective monikers of Steem (STEEM), Steem Power (SP), and Steem Dollars (SD).
Once users achieve a minimum stake in the network, they are allowed to vote on value allocation. The system is a weighted democracy, so rather than 1 person = 1 vote, the system is distributed so that % of ownership contributes to weight of vote.
Having spent countless hours browsing, liking, and posting to social media — it just makes to receive a stake in ownership of the network. Its ‘just economics’, in both senses of the phrase.
For more information on Steemit check out the white paper at: https://steem.io/SteemWhitePaper.pdf
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By: Kevin Leffew
Upvote for @pseudonymouse!
Thanks dude!