STEEMIT – The Business Case – Part Two: Gap in the Market
Social Media, Content and the Blockchain
Developers continue to experiment with content, monetisation models and social media. With the invention of Bitcoin and the blockchain, technologists now have a new tool in their arsenal. This tool offers the potential for novel and exciting ways to provide these services.
The leading platform for internet content curation is still Reddit. For social media it is Twitter and Facebook. These are useful tools.
Still, many find its incentives structure lacking. Reddit itself even went as far as hiring a digital currency team headed up by Ryan X. Charles. The objective was to see if Reddit could incorporate blockchain tech., to improve aspects of its operation.
Reddit – A Brief History
Reddit was founded in 2005 by University of Virginia students. It is based in San Francisco, and currently has well over 500 million users.
In 2014 the site raised US$50 million giving it a value of US$500 million. Content curation and aggregation, in the style of Reddit, is big business.
By July 2010 the website had seen five years of huge growth. It was at this stage that the site started to introduce incentive structures, rewards schemes and monetisation models. These include Reddit Gold.
The Gap in the Market and Steemit
Under the current model, social media services provide a platform and software. Huge teams of developers working for these centralised services provide incremental upgrades of uncertain value. It is the company that gains from the content provided by its users. Users provide the value and gain no financial benefit. Only the platform profits.
The gap in the market is obvious. Blockchain tech. Has been theorised as a solution. Enter Steemit; the new kid on the blockchain.
Ads are annoying and paywalls are tedious and cumbersome. Steemit is curated content on the Blockchain. It pays contributors without the need for either.
Social media platforms are difficult to do, even with the most favourable of circumstances. A great platform is nothing if the bootstrapping problem is not overcome.
Network effects are difficult for a standard social media platform. To incorporate an entirely novel technology like blockchain requires an entirely new approach.
With Steemit, monetary incentives for those who contribute content are built directly into the platform. This type of direct incentive encourages the growth necessary to overcome network effects.
That is exactly what is happening. With a blockchain and some very novel algorithms, the platform is growing massively.
Upon sign-up users are given US$ 3 worth of Steem credit to start with. From there, every contribution one makes earns in direct proportion to its value to the community.
Content is curated by voting, in the same way as Reddit. However, in the case of Steemit, upvotes are worth money. Users are free to withdraw this money and use it like any other digital currency.
Uncensorable Platform
Steemit is the next evolution in social media. It directly rewards contributors rather than platform providers. This is novel and highly valuable. It leverages blockchain tech. to achieve this. But blockchain tech. also provides even further value.
Services like Twitter are highly centralised. It is not uncommon for users to be booted from Twitter if they run awry of the platform providers. In this respect the centralised service has a huge amount of power.
A users can spend many years accumulating a lot of value through followers. They can contribute huge amounts of value to the platform in that time, through content contributions and curation. Only the platform benefits from that.
Then, overnight, the providers of the service can remove the user account, at their complete discretion. All that accumulated value is lost, with little recourse for the users.
Steemit is an uncensorable blockchain platform and the natural evolution of social networking.