Steem's Smart Media Whitepaper: A Plain English Review
Bitcoin Market Journal has been sharing content with the Steemit community since January 2018, and in that time, we have noticed that many commenters on our posts ask for plain-English explanations of how Steem itself works. Here, then, is a plain-English explanation of Steem's whitepaper, which we hope will help both current Steemians and those looking to become Steemians in the near future.
The Rise of Steem
In the two years that Steemit has been in existence, the blockchain-based social media and blogging platform has proven its popularity by moving into the top 2000 websites currently in existence. As a website that has been around for a relatively short amount of time, this is no small feat. Following its success, its creators seek to use the lessons learned from the incentive model within Steemit to implement a new token that will help content creators generate an income without involving any third parties.
Social media tokens are "a native digital asset on the Steem blockchain that can be quickly launched by anyone to help monetize online content and create incentives to encourage desired user behavior." Simply put, these are tokens created within the Steem blockchain and are designed to help publishers build communities that are financially beneficial to all participants within the ecosystem. These economic incentives are especially useful when it comes to spurring the growth of a platform.
As is the case with the tokens within the Steemit network, SMTs are set to feature near-instant settlement as well as zero transaction fees. Moreover, they are similar to Ethereum's ERC20 tokens. However, they carry a built-in feature known as "Proof-of-Brain" which facilitates the creation and implementation of a reward system that is specifically designed for digital content businesses.
What Is "Proof-of-Brain?"
As is explained in the whitepaper, proof-of-brain is a combination of two factors that confirm a creator's intellectual contribution to existing content, thereby allowing him or her to lay claim to any financial rewards that arise. Moreover, rewards are also available for users who interact with said content through the provision of feedback.
Two unique properties align incentives and make SMTs "smart and social" compared to other tokens (such as bitcoin, Ether, and ERC-20s). The first is a pool of tokens dedicated to incentivizing content creation and curation (called the "rewards pool"). The second is a voting system that leverages the wisdom of the crowd to assess the value of content and distribute tokens to it. These two unique properties when combined are referred to as Proof-of-Brain.
The proof-of-brain algorithm encourages creators to publish and curate content. These tokens can be distributed through upvoting or liking content. In addition, creators are able to easily launch an ICO with the aim of supporting their project, without having to deal with the technological aspects of launching a new cryptocurrency.
Steem and Third-Party Sites
It is also possible to integrate SMTs into third-party websites through the APIs provided. Due to the economic incentive held therein, website owners can jump-start growth for their sites. Moreover, SMTs seek to provide an avenue for financial compensation for those who participate in a substantial amount of discourse online through the distribution of rewards generated via a blockchain-enabled pool. "This model also creates a business opportunity for developers who want to build the next generation of crypto-enabled Disqus-like companies."
It remains to be seen how successful SMTs will become, but if the token experiences substantial uptake beyond Steemit's own platform, it has the potential to become the go-to incentivized social media payment currency. That would be a rosy future, indeed!
If you want to learn more about altcoins such as Steem and get plain-English explanations of New Finance concepts, read Bitcoin Market Journal and learn to invest like a pro!
I wish I read this before I tried to struggle through the whitepaper.
How about a simple English explanation of how SBD works or is intended to work?
Any why it is not currently working as intended?
SBD - Steem Backed Dollar or Steem Blockchain Dollar
SBD is worth at least one dollar (or thereabouts). But since it can be freely traded, the market may decide that's it's worth more.
That means the Steem blockchain design did not anticipate the market valuing SBD more than USD?
A lot of business models cannot be implemented without the stable currency.
How about we redesign the Steem blockchain in order to try and restore the peg in a way that it can be maintained. I have an idea for that in a post I wrote 7 days ago (just hinting it is too old to earn and therefore my goal is more of sharing the idea):
https://steemit.com/utopian-io/@mkdouglas/decentralized-autonomous-steem-central-bank-for-maintaining-the-1-to-1-sbd-peg-to-the-usd
My understanding of why it became unpeged is when the bots csme to be they only accepted SBD which made it have a huge demand and caused it to artifically go up. Then again i am kind of an idiot sometimes but that is how i have understood it.
The bots accepted SBD because it became more valuable than steem..not vice versa.
SBD was Steem Backed Dollar but because the peg failed it became modified in the updated whitepaper as Steem Blockchain Dollar (smart if you ask me).
Not even @dan know why SBD skyrocketed. IT SIMPLY MAKES NO SENSE!
There is a small amount of SBD relative to Steem.
I'm not saying it was manipulated, but it wouldn't take a lot of money for a whale holding a ton of steem to bid up SBD as a way to proxy bid steem, then sell off a ton of steem.
The peg had failed in 2016 but for a long time before the August 2017 whitepaper, the peg had held. So I am disinclined to believe that was the reason for the name change but I can see how the name change modifies expectations:
STEEM Backed Dollar - a cryptocurrency whose US Dollar value is backed by STEEM.
Steem Blockchain Dollar - just another cryptocurrency whose value is determined by market forces. If this is the case then why not just discontinue SBD by converting all of them for STEEM and simplifying the dynamics of the platform for easier adoption and growth?
So demand for SBD went up because it was the currency of the bots?
This can be supported by information regarding how much of the total supply of SBD circulates amongst the bots or rather how much of the SBD circulating is paid to the bots on a daily basis.
https://steemit.com/steemit/@penguinpablo/how-many-of-the-upvotes-are-done-by-paid-voting-bots#@mkdouglas/re-penguinpablo-how-many-of-the-upvotes-are-done-by-paid-voting-bots-20180314t124211980z
To call the conceptualizatiom of SMTs amazing would be the understatement of the year! It's going to be really really crazy if we don't have mass adoption in the future. A lot of businesses out there looking for incentives for their users; what better way to get this than SMTs! Imagine getting paid to browse through a site! Who wouldn't want that!?
Thankfully @ned and the guys are hard at work on this! So can't wait!
good work in the article.really its a good post.you are a good steemer
I don't know what to say. To me it seems that Steemit Inc is working to build the worse enemy that Steem had. A collection of crypto that has the same performances as Steem, with the same built in mechanism of proof of brain...
SBD should better rise for my good plaese...
Hello,
Great piece, as much as its subject matter SMTs looks to be a bright future for both Steemit and the entire blogsphere that is "social media". Mostly everyone here I assume has lived through the Internet revolution and evolution from a strictly social interference to now legitamate interpersonal communicator, social media networks are long overdue for innovation. Though I haven't been on Steemit since the inception, ever since the day I began my blog, I found myself delving deeper into the history of this blockchain based platform.
SMTs, or Smart Media Tokens, I believe will advance social media networking online in many ways, not limited to that of Steemit, or blockchain technology rather. For each type of media uploaded, encoded, and exchanged through a data network now supposes value metrics linked to geniune, active human users interacting with original content and accurately signify authentic sources, novelty, and the potential intrigue of sharing new, illuminating wisdom drawn from the consensus of the crowd. Steemit possesses the potential to serve as a great example for how online communities of people all around the world to create, commune, and communicate ideas freely on a platform that offers earning potential for contributors and collectors alike. Ranked by a volumetric quantity of upvotes, comments, and reblogs, all media would lend to an internal algorithmic system of "checks-and-balances" would near-instantaneously adapt global weights of SBD and STEEM currency. STEEM pegged to the $1, SBD pegged to STEEM @ $1USD would be an ideal external trade mechanism to default the base of this digital token, then within the Steemit ecosystem "Planet" would habitat original, organic content by its user community and cultivate a whole new society.
Further discussions must be held once SMT has proven it's worth in practice. Keep this thread going as long as possible. Amazing topic and such a bold stake in technology we've claimed using Steemit, every day here is an incredible learning experience, I must admit.
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