As you are all well aware, the general concept of Steemit is similar to other blogging websites or social news websites like Reddit, but the text content is saved in a blockchain. Using a blockchain enables rewarding comments and posts with secure tokens of value. It is an interesting concept and no matter what happens to Steemit www.thehutchreport.com is looking at many more themes than cryptocurrencies making up the new economy. Regardless, here lies the first issue with Steemit:
The Upvote
The idea that interesting and insightful content can be upvoted seems to be a central premise of this experiment. This would incentivise people to create better and better content and in turn those producing questionable, plagerising or just uninteresting content would fall by the waste side. However, there are many other issues that arise.
Not everybody can create compelling content. It takes time to create good content. It takes writing skills that have to be honed and research skills are required in order to present ideas that have some basis in reality. Instead what we get is the desire for wealth accumulation inticing people to throw out as many posts as possible. They are poorly written and rife with spelling and grammatical errors.
The Steemit community gets rewarded for their upvotes. Looking through the posts with the most upvotes we started to realize that a post with lots of upvotes did not equate to a quality post. Often quite the opposite was true. Therefore, poor quality material is being rewarded and in turn increases in quantity.
In addition, as recently stated on another post, over 12% of new Steem distribution has newly been diverted to rewarding comments, which means that author and curation rewards are dropping by a similar factor.
Steemit is still quite young so there is less competition for rewards. Overtime this will change. As in Bitcoin, over time these rewards for content and upvotes will get harder and harder to come by, at which point there will be no more real incentive to continue.
Founders and Confidence
It is apparent by many of the articles in the Steemit blockchain that many people are still unaware that one of the co-founders, Dan Larimer resigned from Steemit on March 15, 2017. This is not a trivial matter seeing that Dan was the lead developer behind the platform. Also, apparently Dan Larimer also cashed out. Having had experience in the startup / venture capital space we have learned that it is never a good thing when the founder leaves a project.
He expressed his views in an interview saying, “Steem is dominated by politics beyond my ability to control or fix. The code is in good hands, the team is more than capable of implementing any thing the community desires. Let's hope the community chooses wisely.”
Dan Larimer has also had a bit of a sketchy past with the likes of Bitshares and seems to have many people questioning his motivation behind these crypto projects.
In addition, an analyisis of the original Steemit White Paper has shown it to be full of questionable content. A great analysis can be found here:
http://www.libertylifetrail.com/2016/10/23/steemit_started_as_a_scam_and_only_got_worse/
Ironically there is a lot of information right on Steemit with more than a few thought provoking questions.
https://steemit.com/steemit/@deserttree/is-steemit-truly-decentralized
We are skeptical, as anybody should be in the cryptocurrency world. Money seems to bring out the worst in people and it is often surprising the lengths that people will go to, to have lots of it.
This is not about content, it is about accumulating Steem to trade into Bitcoin, to trade into dollars. At a certain point people will cash out at the first sign of real trouble, but the door will be too small for everybody to leave. Keep in mind, there are currently roughly 800 different cryptocurrencies and 182 national currencies recognised by the United Nations. With these things selling off at any sign of trouble, only the strongest will survive. How much time does Steemit have left?