It’s a bold title, I know, and one may argue it’s not entirely true. To a certain extent, I agree, Steemit has yet to prove many things. Google AdSense is on the market for more than a decade, it (still) dominates content advertising and it's a proven thing.
But there is certainly something worth of attention about Steemit. Despite its shortcomings, Steemit is suddenly relevant. And that relevance is showing that we’re on the brink of a profound change to the way information is disseminated and rewarded.
Centralized Ranking Algorithms Versus Decentralized, Public Influence Groups
Google AdSense is built on top of the Google ranking algorithm. Which, by definition, is a black hole. Nobody really knows how it works (I tend to believe that even Google doesn’t know how it works completely, since they added a bit of AI to spice up that soup). Nevermind. What matters is that the algorithm of distribution of ads (which are paid) is centralized.
Steemit is based on the power of influencers. The distribution of rewards (which are denominated in a tradeable token, called STEEM) is based on a proof of stake algorithm, which is decentralized and public. Everybody knows how much power one has and everybody is free to buy more power if he ore she wants. Everything is public. Everything is visible and actionable.
This approach, the decentralized influence people groups is the key to Steemit value and the cause of a major disruption trend we're witnessing more and more these days. I won't go into the intricacies of how money is generated via ads, in AdSense, and how money is generated by the reward pool, in Steemit. Both processes are very complicated, if you really want to analyze them.
But what is more important than that is how money - once generated - is distributed. And that's where the story gets interesting.
Liabilities Of Decentralized, Public Influence Groups
Having money distributed publicly, through a Proof of Stake algorithm is a huge step forward. But make no mistake, it doesn't come for free, it's not perfect and it won't end world hunger. There are a few liabilities. The most important one is the (in)famous collusive whales approach. If you're on Steemit for less than 2 months, that probably doesn't mean anything to you. But if you're around for more than that, then you know what I mean.
Collusive whales is an euphemism for mafia like groups. For communities of people gathering around and imposing their own will, via proof of stake, forcing other members of the community to accept their leadership.
It came in many flavors: from favoring certain authors which were then "drawing the reward pool", up to creating experiments in which whales were asked not to vote, in order to give more powers to minnows and dolphins. I'm not judging the ethics of these acts, nor the intentions behind them, I'm just witnessing the fact that, in this specific setup, once the stake of a certain group is relevant, the entire community can go rogue. I still remember how, for a couple of weeks, hardly anyone was writing on Steemit, because of the arbitrary flagging going around like a hurricane. If there wasn't another significant event taking place at that time (one of the founders leaving) Steemit would be probably dead right now. I, myself, took a few steps back and drastically reduced my involvement, waiting for a change. Luckily, this time, the change came in time, but that doesn't mean it will always be like this.
Liabilities versus Benefits
So, is this worth the trouble? Having a decentralized, public distribution of money based on proof of stake is better than a centralized, opaque approach?
By all means, yes.
Is the current setup perfect?
By all means, no, but it's perfectible. As more stake is changing hands nowadays, with the price of STEEM going up and a surge of interest in altcoins, interesting things are ahead.
Let's not forget though how advanced is this platform we're kinda taking for granted right now. There are people out there who are still writing content with Google in mind, budgeting based on how much they're paid by the CPM.
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.
https://steemit.com/~witnesses