The Ugly Truth Behind Steemit

You post content, people decide if they like it or
not and depending on how ‘popular’ it is, you get
paid. Being able to monetize your content is
great and it’s about time that we have a way to
do it. However, when it comes to Steemit,
appearance is deceiving.
Through a new account called ‘thereverseflash’,
STEEM was launched on March 24, 2016 under
the premise of Proof-of-Work, No ICO, No
Premine.
At launch there were no compiled wallets and an
error in the setup instructions which allowed
only the developer to initially mine any STEEM.
When users asked for assistance, none was
given.
Later on, user ‘Eclipse Crypto’ discovered that
the instructions given by the developer were
incorrect, accounting for the errors everyone
else was experiencing that was preventing them
from being able to mine.
Once other users were able to join in on mining,
the developer was confronted with another
problem. Overnight, an error on the developer’s
end resulted in all his miners crashing (for the
second time). Other users continued mining
STEEM during this time. The developer, upon
realizing that he had lost some control of the
supply, decided to re-launch STEEM to ensure
that he alone had majority of supply (at least
75%+ of supply). As you can see the developer
did everything possible to ensure almost
complete centralization.
STEEM is not decentralized. From the beginning
it was and still remains highly centralized. The
launch of the STEEM network was heavily rigged
to ensure that the developer and his ‘friends’
had control over majority of supply.
Furthermore, this has major implications for the
Steemit platform.
The top 247 accounts on Steemit (most of which
are probably owned by the developer and his
‘friends’ through duplicate accounts) own
~87.50% of total stake, without including the
main steemit account which is also controlled by
the dev. Although any user can vote for content,
the influence of your vote corresponds to the
amount of STEEM you convert on your account.
This means the typical user’s vote is almost
meaningless unless they manage to acquire a
high stake in total supply.
All content on Steemit is highly censored and
centralized since the few actual users who own
majority of the supply get to decide which posts
make it to the front page and which posts get
higher payouts. Accounts are easy to create and
majority of the top accounts are most likely
controlled by a small group of people making
Steemit highly susceptible to sybil attacks.
Simply put, for any content to make it to the
front page, it is subject to the approval of the
developer and his ‘friends’…
Are you an influential or well-known public
figure? The developer and his ‘friends’ will give
you a nice ‘payout’ so you feel good and start
promoting their shady platform to the public.
The number of people being lured in through
this method is alarming and disappointing. Post
something that the majority stakeholders don’t
like and your post will never see the light of day
despite being well-received by many users.
Reddit operates using an up-vote and down-vote
system and every individual user can up-vote or
down-vote content once. If a post gets enough up-
votes, it can reach the front page.
Now imagine if each vote from the Reddit staff
counted as 5000 votes. This is what is basically
happening on Steemit.
Steemit is basically a version of Reddit that is
almost completely controlled and censored by
the creator and his ‘friends’. The content on
Steemit and value of STEEM is also at their
complete mercy. Unlike decentralized networks,
Steemit is almost completely dependent on the
developer and his ‘friends’.
Simplified overview of STEEM and Steemit.
Rig the distribution process so that you end
up with almost all of the STEEM supply.
Create a platform that allows for the
monetization of content.
Make sure certain users get extravagant
payouts to lure in more users (the payout is
a tiny fraction when compared to how much
STEEM you and your friends own).
As more people are lured in, STEEM
becomes more ‘valuable’, resulting in those
who own majority of the supply getting rich
along with the select few they choose.