Steemit is a nice interest graph intersection for me - both Fintech/Blockchain and Media.
For beginners to Steemit, there are many resources - this is one.
If that gets a knee jerk reaction of “yet another work from home scam” that was also my initial knee jerk. But I also remember my knee jerk reactions to email, social media, e-commerce.
So as I started to hear more about Steemit, my interest grew and I decided to give it a try - to run an experiment.
I don't tend to jump in at the earliest stage. In Crossing the Chasm terminology, I am an Early Adopter "visionary", not an Innovator "techie" and I only jump in when I think there is a chance that it will move across the chasm to the Early Majority.
For example I started using email in 1994, LinkedIn in 2005 and Twitter in 2007. In each case they were a) easy to get started with and b) had a practical benefit for me. So that combination is what I was looking for from Steemit.
First, easy. The on-boarding experience was standard two factor authentication. I assumed I would then start publishing. Then I was told that my application was “awaiting approval”.
I was not the first to find this seemingly manual process step strange as this conversational thread on Steemit shows. I have copied some of the comments below:
“I am not sure the issue but its frustrating me. If i recommend it to someone and they cant sign up? Its not building hype but changing peoples minds about joining.
You will need to do the secret hand shake first.
Seems like it depends on the country. I have been getting friends to join from around the world and some get approved in a few days, while others are still waiting over a week later…
I feel like there are better ways to trap spam accounts though. Like, what is it that they're doing in that 48 hours? Is somebody manually checking these? All I can assume is that if they are querying some of the services available to see if the account has been used for spam purposes... but I doubt they're doing that manually or that's going to be a huge issue as they try to scale the site.
I'd definitely be interested to know what the technical reason is for the delay.”
Reading that I was thinking “well that experiment ended badly pretty quickly”, but when I got back to my email a few hours later, the approval was there.
So I still want to know why they have this approval process and whether it will get in the way of growth, but for now I just assume this is a pragmatic entrepreneurial “do things that don’t scale” that is life-stage appropriate. More importantly my experiment can continue.
So I am interested in the practical benefit question of whether one can make real money as a content creator on Steemit. In Social Media 1.0, the content creators got paid in attention not cash - think Facebook, LinkedIn and Twitter. If Steemit is Social Media 2.0, where content creators got paid in meaningful cash that is a big deal.
I have been a bear on the donations method of micropayment as the way for content creators getting paid. Putting up a Patreon button is easy enough, but donations is not an interesting model IMO. Why should somebody donate to a stranger? If I was a starving child in Africa, the charitable instinct kicks in. But Daily Fintech content is specialised and niche and not a charity case. So my theory says Patreon should not work but if I want to run a scientific experiment I should really run Patreon and Steemit side by side. Without the charity use case, there has to be a cut bono argument. There has to be a reason why somebody will pay.
The reason I think Steemit might work is my experience on a forum like Hacker News. (I say “might” because this is an experiment and this is only a hypothesis) Community curation works on Hacker News. It consistently surfaces interesting content. Getting rewarded in Karma points is cool. As I see Steemit, it is like getting Karma points that I can convert to cash.
Preconceptions from the Fintech/Blockchain realm.
So that is how I see it from a Media POV. Steemit is also interesting from a Fintech/Blockchain POV ie the sort of thing we write about on Daily Fintech.
After my experiment, I will know more. At this time I have some preconceptions:
Bitshares. The founder of Steemit had earlier founded Bitshares, which failed. This can lead to two conclusions:
Whatever he touches fails, so Steemit will fail.
If he learned from Bitshares he is a tried and tested entrepreneur who may make it second time around.
I incline to 2. I have seen many ventures that were simply too early. I think Bitshares was like that. At some point we may see something like Bitshares go mainstream and then Bitshares will be honoured with a footnote in history.
Its Complicated.
You can read about 3 currency units here (key points copied below):
Steem:
Steem are the units that are bought and sold for actual money on the open markets. You can trade them as you would bitcoins or a company’s stock.
But you don’t want to hold on to these for too long because more Steem Units are created every single day. If you hold onto Steem Units for a long time, they will become diluted and lose value.
Steem Power:
Owning Steem Power Units is essentially like making a long term investment in the currency because you can’t sell Steem Power Units for 2 years. But there are a lot of good reasons to have Steem Power.
By keeping your currency as Steem Power Units, you will be able to make considerably more money in the long run because you essentially have ownership in the network. As the network grows, so will your piece of the pie.
And you’ll be heavily rewarded along the way. The way things are set up now, 90% of the new Steem Currency that is generated every single day is distributed to the people who already hold Steem Power Units in the form of additional Steem Units. (The other 10% goes to content creators and curators).
Half of the pay you receive for your content will be in Steem Power Units.
Also, the more Steem Power Units you have, the more your curation vote will count. You will have more influence on the site and you will also get paid more for upvoting other people’s work. (When you upvote someone’s work, they will get paid more as well.)
Steem Power Units also play one final and very important role. They prevent massive price swings and volatility on the open markets. Because everyone is locked in for 2 years, we can’t all sell our currency all at once if the market starts to dip, which would crash the price were it to happen.
Steem Dollars:
Steem Dollars are the third and final form of the currency and never get diluted or lose their value. They are designed to be a stable currency that you can sell at any time. When you create popular content, 50% of your pay will be in Steem Dollars.
And you’ll be rewarded for holding Steem dollars too. It’s not nearly as much as the rewards for holding Steem Power. But because it still keeps the currency in the network, holding Steem Dollars pays 10% interest.
When you earn Steem Dollars for creating content, you have three choices:
- You can convert the Steem Dollars to Steem and sell it immediately on the open market for real money, essentially cashing out.
- You can hold the Steem Dollars, which keeps the money in the network and pays you 10% interest. You can sell them at any time. If you think the value will go up and want to sell at some point in the near future, this is your best option.
- You can exchange your Steem Dollars for Steem Power. If you want to invest in the future of the currency and reap the biggest rewards, this is the way to do it.
My knee jerk reaction, that is too complex and sounds a tad scammy, just give me some cash. So let me run the experiment and see what happens. I do not have a policy on these currency units going into the experiment.
Is it really Blockchain?
The jaded journalist in me sees a classic HypeWord1+HypeWord2 in Steemit as in SocialMedia+Blockchain. Adding Blockchain to anything is a classic hype gambit as in IOT+Blockchain (21) or SupplyChainFinance+Blockchain (Hive) or Adtech+Blockchain (BAT). Some of these ventures maybe real but the concatenation of hype words sounds my hype alarm. The question remains, how does Blockchain really enable Steemit. I don’t know but will suspend disbelief till I find out.