Hello everyone! This is the second part of my "Steem Thoughts" series. In the first part I talked about the differences between traditional web apps and Steem apps. In this post, I am going to discuss whether Steem is a fat or thin protocol.
I think before we start, it is important to understand what is a "protocol"? A "protocol" is "the system of rules and acceptable behaviour used at official ceremonies and occasions". When we apply it in the computing context, it is "a computer language allowing computers that are connected to each other to communicate"
Source
Essentially, a protocol establish a set of rules for everyone to follow. Steem is a protocol. It does not allow anyone to just randomly interact with the blockchain. There are established rules on the inputs and outputs and this ensures a fair and predictable environment for everyone to interact with the Steem blockchain.
Fat Protocol vs Thin Protocol
The fat protocol thesis was first discussed by Joel Monegro in the Union Square Ventures blog. Traditionally, protocols are always simple and thin. The HTTP protocol is an example of a thin protocol. If you take a moment to think, the web is quite decentralized from a communications perspective. There are millions of servers all over the globe running on HTTP and thousands of Internet Service Providers connecting these servers together.
Source
The problem comes when we talk about the data layer. As technology progresses, we began to realise that the communications channel is essential but data is more valuable. This means that the more data an application holds, the more valuable it is. Take a look at Facebook and Google. They built an entire business by holding data and transforming them to useful information. Unfortunately, we have grown to a state where data is highly centralized and held by several powerful corporations.
Blockchains and other distributed ledger technologies aim to decentralized the data layer. As a result of that, the fat protocol thesis is born. With blockchain, we can now decentralize the data layer. Depending on how the blockchain is designed, it can be freely accessible, transparent and fair. There are projects that try to build privacy layers on top of the blockchain to allow users to have full control over their data. But that is a topic for another time.
Source
Is Steem a Fat Protocol?
Steem is certainly a "fatter" protocol than any communication layer (e.g. SMTP and HTTP). However, when compared with a smart contract blockchain like Ethereum and NEO, it is leaner. I position Steem as a "lean and mean" protocol. It is certainly not thin but it is not fat either. Steem is designed for very specific functions. To serve as a decentralized content store, to act as a distributed ledger of transactions, and to provide incentivization of content. The collection of these functions makes Steem a viable data layer for most social network applications. The STEEM cryptocurrency serves as a utility coin to make all these functions possible. This is even more so with HF20, as you will need some Steem Power to have Resource Credits to interact with the Steem blockchain.
In terms of capturing value, I think that Steem will not be able to capture as much value as a smart contract platform. Smart contract platforms are multi-purpose. It is like a Swiss army knife. Technically, it is possible to build social network dApps on any of those smart contract platforms. On the other hand, Steem is like a fruit knife. If you just want to cut your apples and oranges, you use a fruit knife. You can of course choose to use a Swiss army knife. It will work. But why would you want to do that when there is a fruit knife available for you?
Conclusion
In the area of business marketing, there is always an emphasis on market differentiation. What differentiate Steem from the other smart contract protocols is that it is designed specifically for content creation and incentivization. So Steem is in a league of its own. Back when EOS was being launched, there were a lot of speculations on how EOS might affect Steem. I think there is no point comparing apples with oranges. Till date, I have not seen any other working platform like Steem that is so targeted on social network applications. With that understanding, I remain bullish on the future of Steem.
In short, Steem may not be the "fattest" protocol, but it is a protocol which is fit for its purpose and will certainly be capturing the value it deserves in time to come.
Links to my "Steem Thoughts" series:
- Part 1 - Traditional Apps vs Steem Apps
- Part 2 - Is Steem a Fat Protocol or a Thin Protocol?
- Part 3 - Inequitable Value Between Users and Apps