SteemIt (STEEM): Smart Blockchain Social Media Network Rewards Token?
The Steem offering is a “blockchain-based rewards platform for publishers to monetize content and grow community,” according to the company website. In a nutshell, Steem is the popular forum Steemit’s native currency. Employed as a “native digital asset” to the Steem blockchain, STEEM coins can also be minted by anyone to monetize online content and provide an incentive in marketing or other legitimate network applications.
In ways similar to the ERC-20 token, Steem has inbuilt ‘Proof-of-Brain’ attributes with a “token distribution reward system designed specifically for digital content businesses.” Emulating an emerging phenomenon in the subscription media arena and others, the PoB algorithm generates token rewards that encourage users to both create and then curate content. Tokens are issued via “upvote” and like-based protocols and they can be integrated with sites to facilitate and boost aligned aims between community members and application owners.
Acknowledging that maintaining a decentralized rewards-based social network called for new advances in blockchain technology, the company claims Steem as a “next-generation blockchain, uniquely designed to run real-time applications with near instant, fee-free transactions.”
On the network, peer rating ranks contributors who are then rewarded alongside voters with Steem tokens that accrue a crypto value over time. The network is already processing more transactions per second than Bitcoin. As a result of its popularity and entrenchment as an online space, Steemit has released Steem to enable its becoming a social network that rewards its community.
Essentially a blogging platform, Steemit’s release of a native currency should further spur growth and also delineate valuable content from the myriad of casual snippets to be found there. Users can now enjoy a ranking system to find the most popular and ostensibly valuable posts.
The Steemit Ecosystem
From a popular social network platform, Steemit is now a popular social network platform that pays users. For everything that users do there – liking others’ contributions, commenting and posting content – they are rewarded with fractional percentages of Steem that accrue into account savings that can be cashed out in time if desired. Apart from being a next-level marketing overture towards growing the user base for the existing model, the release of Steem will also enable app and mostly blockchain project developers to not only fund a project but also release it to a massive potential subscriber base.
Aiming to demonstrate the “future of the web” with its release of the native currency, Steemit’s tokens are given to content creators and content curators of any description on a daily basis.
Rewards are determined by community voting, and the currency can be easily swapped out for Ethereum and Bitcoin. The consensus algorithm employed by Steem sees voting weighted in proportion to an individual's interest. The model also eliminates the need for content creators to seek monetization of their efforts through advertising, as they can now find a cash value with Steem, assuming users vote for their content.
The Steem network has three different asset classes within its currency structure: Steem (STEEM), Steem Power (SP), and Steem Dollars (SBD). All of the other tokens derivatives get their value from STEEM. Steem Power (SP) is a token geared for a long-term perspective.
Noting that start up companies require long-term capital commitment, the company issues the token to enable longer-term cash flow for startups who need time to scale and return profits. Steem users can commit their STEEM to a 13 week vesting cycle that generates SPs and grants them greater benefits within the platform. Unlike STEEM, SP is not easily traded on cryptocurrency exchanges, and both SP and SBD (below) are truly native currencies, operational behind STEEM itself.
Steem Dollars (SBD) are the final asset type on the Steem network, one that acknowledges the need for stability in an economy. Steem Dollars are an attempt to deliver stability to the cryptosphere as well as to users who operate on the Steem network.
Similar to convertible notes, Steem Dollars offer terms that allow the holder to convert to the backing token in short notice at the then-current market price of the token. Essentially a currency backed by Steemit and its user base, the token-convertible-dollars will enable blockchains to grow their network effect while increasing the gains for holders of the tokens.
Final Thoughts On STEEM
Launched in 2016, STEEM has been met with mostly appreciation by users, although some are asking where the money is coming from to fund such a rewards program. While as simple as paying cash to posters and voters – with very few twists – some users are concerned that honest, core value will be lost in a monetized attempt to earn through unethical behavior that carries no legitimate value for others. Voting or trawling for instances that optimize earnings is a spectre that looms for many and holds the promise of a deflation of core value.
That said, the prevailing ethos and current user base should be enough to maintain the broadly egalitarian behavior now encountered on the platform. Also due to the fact that payment is balanced insofar as it is neither opulent nor cumulatively negligible, no great surge in a new, unsavory direction has been noted since the currency’s introduction.
Although the digital token’s introduction into what was already a thriving social commentary has now made other pursuits possible, most users have not deviantly shifted from their original participation in pursuit of funds. Although the prospect of a mercenary bent emerging on the platform remains, behavior to date hasn’t substantiated that phenomenon and the planned incentive that Steem enabled has rather further optimized user experience and grown the company’s user base.