"The Ugly Truth Behind Steemit" - Please share your thoughts on this
Hi Steemit,
The main goal of this article is to promote a healthy discussion.
I really like steemit , especially for high-quality content that is delivered by the users , but somehow I still do not understand how this new concept can be sustainable .
And then I read articles of this kind, and begin to doubt about all this .
What are your thoughts on this?
Portuguse fellow here. Sorry my bad English :)
This article was originally published in https://decentralize.today/ by @BlockByBlock
Original link: https://decentralize.today/the-ugly-truth-behind-steemit-1a525f5e156#.dgl8a0o3y
The Ugly Truth Behind Steemit
You post content, people decide if they like it or not and depending on how ‘popular’ it is, you get paid. Being able to monetize your content is great and it’s about time that we have a way to do it. However, when it comes to Steemit, appearance is deceiving.Through a new account called ‘thereverseflash’, STEEM was launched on March 24, 2016 under the premise of Proof-of-Work, No ICO, No Premine.
At launch there were no compiled wallets and an error in the setup instructions which allowed only the developer to initially mine any STEEM. When users asked for assistance, none was given.
Later on, user ‘Eclipse Crypto’ discovered that the instructions given by the developer were incorrect, accounting for the errors everyone else was experiencing that was preventing them from being able to mine.
Once other users were able to join in on mining, the developer was confronted with another problem. Overnight, an error on the developer’s end resulted in all his miners crashing (for the second time). Other users continued mining STEEM during this time. The developer, upon realizing that he had lost some control of the supply, decided to re-launch STEEM to ensure that he alone had majority of supply (at least 75%+ of supply). As you can see the developer did everything possible to ensure almost complete centralization.
STEEM is not decentralized. From the beginning it was and still remains highly centralized. The launch of the STEEM network was heavily rigged to ensure that the developer and his ‘friends’ had control over majority of supply. Furthermore, this has major implications for the Steemit platform.The top 247 accounts on Steemit (most of which are probably owned by the developer and his ‘friends’ through duplicate accounts) own ~87.50% of total stake, without including the main steemit account which is also controlled by the dev. Although any user can vote for content, the influence of your vote corresponds to the amount of STEEM you convert on your account. This means the typical user’s vote is almost meaningless unless they manage to acquire a high stake in total supply.
distribution of stake on Steemit
All content on Steemit is highly censored and centralized since the few actual users who own majority of the supply get to decide which posts make it to the front page and which posts get higher payouts. Accounts are easy to create and majority of the top accounts are most likely controlled by a small group of people making Steemit highly susceptible to sybil attacks. Simply put, for any content to make it to the front page, it is subject to the approval of the developer and his ‘friends’…Are you an influential or well-known public figure? The developer and his ‘friends’ will give you a nice ‘payout’ so you feel good and start promoting their shady platform to the public. The number of people being lured in through this method is alarming and disappointing. Post something that the majority stakeholders don’t like and your post will never see the light of day despite being well-received by many users.Reddit operates using an up-vote and down-vote system and every individual user can up-vote or down-vote content once. If a post gets enough up-votes, it can reach the front page.Now imagine if each vote from the Reddit staff counted as 5000 votes. This is what is basically happening on Steemit.Steemit is basically a version of Reddit that is almost completely controlled and censored by the creator and his ‘friends’. The content on Steemit and value of STEEM is also at their complete mercy. Unlike decentralized networks, Steemit is almost completely dependent on the developer and his ‘friends’.Simplified overview of STEEM and Steemit.
- Rig the distribution process so that you end up with almost all of the STEEM supply.
- Create a platform that allows for the monetization of content.
- Make sure certain users get extravagant payouts to lure in more users (the payout is a tiny fraction when compared to how much STEEM you and your friends own).
- As more people are lured in, STEEM becomes more ‘valuable’, resulting in those who own majority of the supply getting rich along with the select few they choose.
The successful creation of a content monetization platform does not require the developer to create his own ‘token’ or economy but Steemit chose to do so anyways through the use of highly questionable methods. Yours Network(soon to be released) is an example of a content monetizing platform that is designed to monetize user content without the questionable ‘get-rich-quick’ scheme for its creator and does not depend so heavily on its developer and his ‘’friends’. You can follow progress on Yours through the Yours Network twitter account.
Working on slight UI changes for the MVP release of *Yours. Here's a glimpse of what to expect for V1. May change.pic.twitter.com/06tgsZQtrP — @YoursNetwork
More fun UI shots as the Preview release of Yours is continuously iterated. Subject to change. *OwnYourContentpic.twitter.com/JlACHk8SSW — @YoursNetwork
There are various other flaws and red flags present when looking at the economic model behind STEEM and Steemit which will be discussed by Tone through a comprehensive analysis of it’s whitepaper.
1 of XX: So finally reading *steemit WhitePaper, pg1 already has a major flaw but will persevere! *bitcoin *steempic.twitter.com/u15QlsP1Pi — @Tone_LLT
7 of XX: I'm starting to understand the types of *steem on *steemit. It's 100% Ponzi, but do they know it? *bitcoinpic.twitter.com/blSTDGaeOy — @Tone_LLT
8 of XX: It's affirmative, description of *Steemit's *Steem Dollars (SMD) is the re-incarnation of *Paycoin, *sweetpic.twitter.com/qkJdTsQ4iC — @Tone_LLT
To be continued…
# replace by *
It may have been a highly questionable instamine, but from what @smooth says, the initial mining was legit as he was mining alonside others whom he had no relationship with. From what i understand, the instamine was done for legal reasons instead of an ICO or something of that nature. As of now, steem is centralized which is acceptable IMO while it is still in beta. I dont have a problem with it but others may. At least the devs have plenty of funds to dev with.
Here is what happened from my personal perspective:
Draw your own conclusions.
I've definitely caught wind of the way things work here. I like the initial concepts, and maybe Steemit can correct itself before it falls apart, but the inequality between the initial accounts and subsequent joiners is disparaging. I think you can build and audience or bring one in from another platform and do well, it's just not a get rich quick scheme like everyone might like to believe.
From what I've gathered unless you're already a whale on another platform like youtube with tens or hundreds of thousands of followers you have virtually almost no chance of monetizing here, unless of course one of those whales or a steem admin supports your content.
Building a follower base from scratch here seems difficult because almost everyone is thinking about about how to improve their own steem power which involves continuing to feed the whales your votes regardless of the quality of their posts compared to the average Joe. Combine that with the 30 minute rule and I suspect most people don't even read half the posts.
Though frankly I'm here because I actually enjoy and biased towards some of the whales and I like that they're being compensated well, It's just that I don't expect any real integrity in the advertised front page content.
Thanks for this post. It appears that steemit is replicating the feudal system in digital space. An old story.
It is not just "the ugly reality behind steemit". It is the ugly reality behind any exclusive system that is structured to benefit a few at the expense of many. It is the ugly reality behind capitalism itself. The solution is worker-owned cooperatives, i.e. socialization, with strict caps on income/benefits. I'm all for disparity in outcomes, with a few talented hard workers making more than the others. More as in twice as much, or thrice as much, or maybe even ten times as much. But when the disparity gets much beyond that, it is excessive and no longer plausibly represents differences of talent and effort. Just like pay for company presidents, 50 years ago, was ten times that of the lowest grunt on the assembly line. Now, it is more like five thousand times that of the lowest paid, or even more. That's ridiculous, and socially ruinous.
Thanks for the heads-up about Yours Network.
Thanks for sharing this material, I like what you posted. Thank you so much
Thanks 😉
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