Today I celebrate roughy 2 weeks since I started my 30 days writing challenge (that’s also 2 weeks since I’m on Steemit, for what matters). I had something planned for today’s post on my editorial calendar, something along the lines of the last posts, simple and actionable, under 600 words.
But I decided to go for something a bit more speculative, closely related to the future directions of Steemit, as lined up by @ned’s seminar at the Oslo Hackathon last weekend.
The Eternal Steemit Question: Where Does The Money Comes From?
I get this question each and every time I try to explain Steemit to someone. And it’s a very legitimate question. I can go on for hours with complicated cryptocurrency stuff, but, at the end of the day, there is only one question that matters: who pays for what?
As of today, a part of the entire supply of money paid in the Steemit ecosystem is “printed” by the platform. The other part comes from people who are buying steem with fiat currency, either as a long term investment (powered up and locked in Steem Power) or as a speculative investment.
And that rises a very important question:
What Can You Really Buy With Steem?
The only thing you can buy right now is some influence in a social network. Hm, influence for what?
Like, really, what can you do with that influence?
Well, you can re-distribute it to people who are writing content which is allegedly interesting. The more influence you have, the more steem you can direct to those author’s wallets.
Hm, why would you do that?
Or, in other words, who should you be, in order to want to have that kind of influence?
Take a step back, try looking over the computer’s monitor and think abut it. Who should you be, in order to reward people that write interesting content with money?
As I pondered this for a couple of days, I realized that the only merchandise here on Steemit is attention. And that attention is locked in by the means of interesting content.
Here’s how I understand the mechanics behind the Steemit economy:
- as an author, I strive to write interesting content, content that would be seen by many people
- as I grow a bigger audience, I can create predictability: I will know that my posts will be seen by a specific number of people
From that point, it segways in two directions (they may overlap, but they’re essentially independent):
- I want to have the full attention of my predictable audience, as this audience fulfills my needs in terms of rewards
- I want to sell a part of the attention of my predictable audience, because what I get in terms of rewards for that audience is not enough for me (for various reasons, from pure greed to wanting to impact the world in a much deeper way, hence I want to maximize the potential reward of my activity)
The first direction is something that I’m very attracted to. If the platform will evolve in that direction, I can see myself in that spot for a very long time. Because I would love to be rewarded directly for my content, without going through complicated processes, like advertising, or converting that audience into buyers for other products, and so on.
But…
Well, this is a little difficult to take in, because there aren’t too many precedents for this. All other attempts at creating a decentralized economy of content, failed so far.
It’s also true that, before the airplane was invented, there wasn’t any airplane precedent. Just because it wasn’t done before it doesn’t make it impossible.
The second direction, though, is much more realistic. It was done before and it can be done again. It’s not as revolutionary as the first direction, but it’s much more plausible.
It’s the good ol’ advertising thing. @ned hinted very clearly that they are planning to introduce advertising in the platform, one way or another. From a certain point of view, that will be good: it will silence the naysayers or those obsessed with the question “where does the money comes from?” because it will be clear now from where the money comes from. But on the other side, this will create another pack of problems.
It will be, basically, a distributed AdSense, in which the middle man (Google) will be replaced by direct negotiation between the advertiser and the content owner.
If the negotiation between the advertiser and the content owner can be streamlined, this may work out. Probably the most interesting part will be how the money will be split: how much for the author, how much for curators, how much for the network.
One of the possible ways was described by @ned in the following terms:
- a part should be “burned” (distributed equally around the network - that would probably be equal to the value of the traditional “commission” which will not be cashed by the middle man, but by “everybody”)
- a part should be paid to the author
- the rest should go to curators.
I thought of a few questions, and I will leave them here, as a starting point for a discussion. In my opinion, if a reasonable answer can be found to all these questions, then Steemit could succeed as a business, even if it will be just another AdSense. At least, it will be a decentralized AdSense, which is still something.
- how can you mitigate the voting bots? It’s easy to see how someone who wants to create a lot of artificial attention will build some sort of voting algorithms.
- how can you mitigate the price negotiation? It will be done directly by the advertiser? It will be automated? The author may have something to say about the advertiser (refusing him, for instance)?
- how can you define and evaluate the advertiser results? It will be paid by exposure? It will be paid by conversion (which will happen outside of the system)? The advertiser will move the selling processes into Steemit as well?
Let the discussion begin :)
image source
This post is part of a 30 days challenge on business, you can find the entire list of articles here.
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.
