Does Steemit Inc Have A Conflict Of Interest?

There was a proposal that Steemit Inc threw on the table last week that they referred to as the "Economic Improvement Proposal". This is not actually their proposal but was put forth by @trafalgar.

The point of this post is not to debate the proposal itself, the shift from linear rewards to convergent linear rewards. This is already being posted about and we will see discussions on this elsewhere.

For those who are not aware of what I am referring to here are two posts. The first is by @steemitblog which provides an overview of the idea. The second is by Steemit Inc's Senior Blockchain Engineer.

https://www.steempeak.com/steem/@steemitblog/improving-the-economics-of-steem-a-community-proposal

https://www.steempeak.com/steem/@vandeberg/reward-curve-deep-dive

The fact they are commenting on a proposal as opposed to being the ones to create it makes a difference. They are not, to my knowledge, the ones driving this.

Yet, there is some cause for concern.

Steemit Inc is a private company. It is incorporated meaning that it is accountable to it's shareholders. The goal of the company, like any corporation, is to return the most to its shareholders. This is why corporations exist. Public or private, they all tend to have the same focus.

This means that Steemit Inc is responsible to Steemit Inc, first and foremost. People invested money (I presume) in Steemit Inc expecting a return. Whoever owns the company is looking to maximize this.

This filters through to people who work for the company. When Eli or @andrarchy speak, they are doing so as paid (I presume they are paid) employees of Steemit Inc. Once again, that is where their responsibility and loyalty lies. Steemit Inc is the priority to them, first and foremost.

While there is the "one hand washes the other", and relations improved, it think it vital to remember this.

Which brings me to the nature of the potential issue.

Source

Steemit Inc is responsible for the programming of the blockchain. They do all the coding, period. While outside "suggestions" can be taken, they are the ones who decide what gets coded. Of course, the implementation is ultimately up to the Witnesses but they are not involved in the day-to-day process. Code is presented as a package for a Hard Fork, hence minor things are not likely to be researched (after HF20, we learned major things are overlooked too).

In addition to being the developers for the blockchain, they are also the owners of Steemit.com. This was the first interface of the ecosystem, a blogging platform. As a private company, the goal is to maximize the return off this asset. We recently saw the addition of Google ads which, according to Eli, is generating $3K a month for them. While that is nothing to write home about, I am sure it is just the tip of the iceberg in their plans. We will see other things to maximize their return in that area.

Here is the issue: over the past few years, we saw the ecosystem evolve. This is no longer just a blogging blockchain. Certainly, there are a few interfaces that cater to this but we are also seeing many more that are moving away from that. For example, we now see a number of applications that use the Steem blockchain for Proof-of-Activity. There are also some gaming applications that are being created that use the blockchain in interesting ways.

The point is we have no idea what is going to show up in the next few years. With the open nature of blockchain, the development is going in many different directions. I am certain what we see in 2-3 years will really blow us away compared to what is available today.

Steem is a unique blockchain. It is one of the few that can offer developers both Fast AND Free. The blockchain is Fast (3 second per transaction) and transactions for the users are Free (no costs for mining, RAM, or CPU). I am not aware of too many that can make that claim.

This means there is no telling what we are going to attract. There is a realistic chance that we not only move away from blogging but the entire content creation model as we know it. Content can take on many forms and it might not be blog (vlog) posts like it has been.

Which is the source of conflict. What is to prevent Steemit Inc from coding things that favor itself? The company is obviously intent on making Steemit.com a big success. This will create even more incentive to protect the asset as much as it can.

It is the nature of business to try and protect what you have. We see this daily with all the attack on this industry. The established entities are doing all they can to defend themselves against the disruption posed by decentralized blockchains. There is no reason to presume that Steemit Inc will not do the same thing. In fact, depending upon the shareholders, the project team will be forced to do that.

The value in open source and decentralization is that a variety of interests can be represented. All are welcome to build what they want and the ultimate decision maker is the user base. They decide if an application is worthy or not.

In this instance, the potential exists for Steemit Inc's responsibility to itself to override the interest of some in the community. What if we get to the point that blogging is a very small part of this platform? I believe this is a likely scenario based upon what the present internet is used for and my understanding of some other technologies that are coming down the road.

Is there a conflict of interest with the ones responsible for the coding of the blockchain also having a vested interest elsewhere?

Food for thought.

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