If you want to join Steemit, your account will have to go through a validation process. Which, for now, consists mainly in manual approval. And if because the site is getting really popular, there's a huge backlog (a few thousands accounts) waiting to be processed.
Before getting into the nitty gritty of why this is happening and how we got here, let me just saying that this is a good thing. I will gloss over it at the end of the article, but for now just take this: yes, this is a very good thing, for everybody.
User Acquisition Costs
If you ever wanted to start an audience based business (like Steemit) you know there is a very important metric, called user acquisition cost. In other words, it's the amount of money you need to spend in order to actually convince somebody to create an account in your platform. In the gaming industry, "buying users" is a relatively common practice. The price per user can go as high as $60-$90, in some cases.
Steemit has these costs too and they were ingrained in the business logic, from the very early days. But it was a bit counter-intuitive. In order to make an account, you have to pay a fee. That's because creating an account is a special type of transaction and you have to pay in order to broadcast it (it's the same in Ethereum, for instance, every transaction costs some gas). There is a blockchain property called account_creation_feee, which is set up by the witnesses. The confusing thing for the majority of users is that this fee was paid until now by Steemit itself. This is the user acquisition cost and Steemit has a certain account (I guess it's the @steemit account itself) which is designed specifically for this. Every time you open an account, from the @steemit account goes to your account a certain amount of Steem.
Back in the early days of Steemit, the account fee was around $5. When Steem was trading at $0.16, the total amount of Steem you were getting in your wallet was around 30. Now Steem trades at $2.45, so you would probably get 2-3 Steem in your wallet. I think by now you start to realize both the complexity of the platform and the problem Steemit is facing. Because if somebody decides to create 1000 accounts, he will be up for raking $5000 AND he will dump a significant amount of Steem on the market, which, theoretically, will draw the price down. Ups.
3-4 months ago, I was very concerned with this account fee. I had a few discussions in the chat and I even opened a request on Github asking for a way to dynamically adjust this, fearing the consequences of a quick, massive influx of new users, which could have create - potentially - quite a damage to the @steemit account. At that moment, the main feeling about my inquiry was: "well, this is a problem we really wish to have and we will deal with it when we'll have it", hinting at the fact that an influx of new users was the best thing that could happen to Steemit. Well, there you go. Here's your problem.
How do you deal with it?
At the moment, the basic approach is to manually approve all the accounts. But there are many other ways, and some of them can be solved with code. Here are a few directions:
- create a more complex onboarding process (one in which you could also measure some of the activities of new users) including questionnaires and tutorials (i.e. make sure the people understand how the blockchain works, what is a witness, from where the money comes and some basic netiquette rules)
- delay the moment of the first power down for a new account, up to 45 days (a new user will not be able to power down immediately after the creation of the account)
- freezing the
account_creation_feeat the code level (i.e. not having it set by witnesses consensus), peg it to a value in US that will make sense from a business point of view (ex: we, Steemit INC, consider that the cost of acquisition is profitable at $5/user, so that will be always the cost, converted in Steem. If Steem trades at $5, then a user only gets 1 Steem) - block the account fee in an escrow account and don't make it available to the user until he / she passes certain tasks: a certain number of followers, a certain number of posts, a certain level of reputation. Along the same lines will be temporary limitation of the access to all the funds generated: you have first to play around, give some value, and then you will have access to the funds)
I'm open to a discussion with people in charge form Steemit INC if there's a need to take this further (although I'm not holding my breath about a potential interaction, based on past experiences).
Anyway, back to our initial point of view. So,
Why Is This Good For Everybody?
First of all, because this project is not your regular paying site. It's not tsu, it's not Amazon Mechanical Turks, it's something completely new, sitting at a crossroad between utopian Universal Basic Income and the creation of an incumbent attention economy, all of this placed in a very advanced blockchain. Where you mine by blogging.
Huh. Yes, this is an experimental product and if the site will allow a massive influx of people looking for free (or cheap) money, then it may fall hard.
Second, because this waiting list act as a filter. Truth is this filter is a bit expensive right now (because it involve manual labor) and I'm sure it can be improved (hint: look at the directions above). But the result of the filter is good: if you really want to join, you will make your due diligences and wait. If it's important for you, then you'll keep reading articles, educate yourself and start to build a strategy. Because where there's money to be made, it has to be a strategy. Please, pretty please, with sugar on top, if you read this and you're just the regular internet freeloader drooling at the prospect of having free blockchain money, don't take it personally. I think you're a good person, but this is not your place. Really. Peace.
And third, this is a good thing because it forces Steemit to find solutions. Now that Dan, the architect of the initial project, is on another path, the team has to find solutions to overcame these shortcomings. I'm optimistic about the tech competences. And I'm not saying this because some recent improvements in the UI (which aren't) or some major improvements in the next HardFork (which, at the technical level, are not impressive) but because I follow closely the Github repository and I'm aware of all the new sub-projects that are flying under the radar now. These sub-projects will be able to empower the potential developers on the Steemit blockchain very soon. I'm talking about maturing JavaScript libraries, about sbds (a way to access the blockchain via SQL) and many other technical tidbits that are not so spectacular or mainstream, but are very, very relevant medium and long term. So the tech is good. It's the marketing that worries me a bit, but hey, I'll just do that crossing fingers thing and hope for the best.
There are some pains that Steemit has to go through right now. Luckily, these are growth pains. And hopefully, they will be solved.
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.
Posted from steem.city - an experimental service on the Steem blockchain.
Beneficiaries: @dragosroua, @raluca, @steem.city