Today there are two revenue models out there today for internet companies.
The first is paying for the service directly, i.e. Spotify, Netflix.
The second is advertising, which is the backbone of the internet as it stands today. All the major internet companies are essentially advertising/marketing companies that use their users information to monetize.
There are inherently many problems with this model.
It's a roundabout way of getting paid.
The most efficient way to do anything is directly. And the advertising model leaves many cracks in the value channel from consumers to creators. That's why scale is so important, you're essentially getting a tiny sliver of the value you are giving.
Privacy
Internet companies today have a disturbing amount of data on their users. But it's not necessarily because they are evil or want to know what you are doing at 1am. It's because that is how they monetize. If you think your service is free, think again. My dad said when I was a kid there is no such thing as a free lunch and it rings true to this day.
It's just inefficient
Advertising is one of those tricky things because ultimately there are only so many eyeballs awake at any given time. And on top of that only so much value is transferred via accidental ad clicks and partner referrals. There is a lot of money being left on the table, it victimizes users, and its a moral hazard to society with the over advertisement we are experiencing today.
Steemit is an attempt at changing this paradigm. Most users of internet are browser's. They consume content in a superficial way on the surface and thats it. But they are being followed and tracked even when they turn off the app. The reason this has continued in this way is due to the technology.
Value transfer in todays fiat central banking world is expensive. And the margins for this service have been driven down to as low as they can go by the likes of PayPal and Visa. This is ok for direct buy and sell relationships but on the micro payments level the cost is just too high.
Enter the Blockchain
Outside of its ideological aspects, it is a massive technological breakthrough in value transfer.
Now we are able to send small amounts of value for fractions of a percentile.
And in the competitive world of content, the most important thing is scale, but now we don't need millions of users to in order to succeed.
We are able to capture the value via likes, posts, referrals and reputation.
This is big and more likely the out come of this whole Blockchain thing rather than one Blockchain to rule them all.
The whole point of decentralized protocols are that they are open. And openness does not bode well for shareholders. Now that anyone can create an internet business model using a blockchain we will see people worldwide tinker with the tech.
And Steemit is enjoying success due to this.
They are building a protocol for a specific purpose, very much like Satoshi did.
And this purpose is to disrupt the revenue model of the internet and, while still in its infancy, is showing great promise.
And on top of everything, it increases user autonomy, on the side of the creator and user.
Google and Facebook better watch out, there is a disruptive force coming.
Its called the Blockchain, and it's going to eat their lunch.