There seems to be a great deal of confusion about the business model in the Internet Age.
Here is a simply universal law of Informational Technology that applies to the entire online world.
NOTHING IS FREE! EVERY NETWORK HAS A COST!
- Servers cost money
- Memory costs money
- Developers cost money
- Hosting costs money
- Domain names cost money
Everything has a cost.
One of the biggest misleading statements on STEEM is that it has no transactions cost. This is not true.
The true reads this way: STEEM has no DIRECT transactions cost.
Make no mistake about it, there is a cost. And someone is paying it. The only question comes down to who?
The uproar since Hard Fork 20 appears to be simply because so many do not understand the system. STEEM is not free now, nor was it before. There were costs to transactions and account creation. It simply is impossible to avoid these.
I see people saying many people are leaving. Where are they going? There is no such thing as a "free" social media site. It does not exist.
What about Weku? People are going there because it is free.
Does that network defy the laws of informational technology? Do they have servers, developers, and domain names? If they do, their system is not free.
I want you to think back to the situation with @dtube. Do you remember how people complained that they took 25% of the reward for a post to cover costs and for further development? This really upset people. So, when dlive came along while providing a free service, many jumped ship.
Of course, unknown to everyone was that dlive had an ulterior motive. Plus they had funding out of a $20M ICO. I bet if @dtube had $20M behind it, that would be free too.
The epitome of this discussion is Facebook. Everyone and their brother knows that behemoth makes a huge chunk of change. How do they do it? Well advertising is one way. Another is through the selling of data. Both of these are fairly well known.
There is another way that just came out. Facebook compiles phone numbers for "security" reasons. I guess if you lock yourself out of the account, they can text for verification. Pretty handy deal.
Do not think for a second that was their reasoning. The truth is the robocalls you get, there is a good chance Facebook is the reason.
It appears they were selling phone numbers that were received under the guise of "security".
So which of these appeals to everyone? We could make STEEM free by having the Witnesses place ads everywhere. That would allow STEEM to remain free. Then people could do whatever they wanted.
Or we could have Busy and Steemit sell all our data. They could install tracking devices, coupled with the ads, to monitor our every move. This would certain raise enough money that "free" would be possible.
Naturally, everyone on here should hate those ideas.
The model that is being embraced is called "freemium".
This is used in many industries. As you can tell it is a combination of free and premium. When combined, both aspects exist within the same system.
An example everyone might be familiar with is Dropbox. This is a very successful freemium organization. People can have free storage up to a couple GBs. After that, the pay model starts. Obviously, those with the free account do not get the same things as those who pay.
From what I understand, many games are this way. The free version gives someone access and a certain amount of activity before it locks one out. Over the next day or two, the system recharges giving access again. If one wants to play more without waiting, money is paid to gain greater access.
This is how STEEM is. People with more SP are able to conduct more activity on the blockchain. Those with less, will be limited. This was a topic on the Witness call yesterday. Obviously, there needs to be a level found where a newer person can interact in such a way to grow the account but does not receive the same abilities as those with more SP have.
Based upon many posts over the last few days, some seem to disagree with this. I guess they believe someone signing up should be given the same rights as one who was here contributing for 6-9 months. Does a new person really deserve the same level of access as someone who worked his or her butt off to get 500 SP?
Do not forget, all transactions do have a cost that someone is paying. I know many on here are into freedom, against socialism, and prefer free markets to reign. If that is the case, why do some who believe in that tout the idea of subsidizing activity?
There is no doubt it is a fine line that the community needs to find. It appears that accounts under 50 SP are the most affected. I know of one who is operating without a problem at 200 SP. She was doing her regular activity and her RC never dropped below 97%.
As I stated yesterday, on the Witness call, it was evident they are very mindful of newer people. We all know that people joining the STEEM blockchain is growth. This is needed.
The other day I put up an article that talked about STEEM becoming "exclusive". Some took exception to that term since it meant some are excluded. This really is not the case. The Resource Credits separate STEEM in the sense that costs are explicitly shown. This is a good thing. If we hope to attract businesses, this is something they need to know.
Another term that many complain about is "pay to play". They do not believe it is a good concept for people to have to pay to be on this blockchain. Well, to start, nobody needs to pay. One can still get an account via other means and grow.
Secondly, as one Witness mentioned, it is not pay to play as much as it is "invest to play". One is not really paying anyone anything. When buying STEEM and powering up, it is still your money. It still resides in your account. This is just an investment in one's activities on here.
Again, if 50 SP is the level where transacting gets difficult, that is about $45 USD right now. I know this is out of the range for a lot of people in the world. In those instances, there are other paths to pursue on here. However, for those who can afford it, like those in the west, that is a month worth of Starbucks visits. It is not the end of the world for someone who is serious about growing this as an economic vehicle for oneself.
The implementation of the Resource Credits simply make the cost of things evident. There was a time, early this year, where many smaller accounts were locked out. This was when the cryptomarket was on fire and the network was more heavily used. We will see the same thing happen with the new model. If traffic is heavy, those with almost no stake on the blockchain will be locked out.
Some might feel this will stunt STEEM's growth. It will not. The reason I state this is where are people going to go? There is no such thing as a free network. People are even waking up to the fact that Facebook and Reddit are not free.
Every blockchain is going to follow the same path. There will be creative ways to get around it but all have the same issue. Ultimately, someone is paying for the network to operate.
Fortunately, with the STEEM blockchain, there is versatility. As a freemium network, people can join through the applications, most of whom have enough RC to sign people up. This will give people basic interaction up to a certain limit each day.
For those who are earnest about being here, there are a number of alternatives to grow faster:
- Purchase STEEM and power up
- Receive SP delegation which also increases RC
- Get RC from the pool (this is not for certain but @ned mentioned this in a post a while back)
Therefore, we see that STEEM is not a free blockchain but a FREEMIUM one. One does not need to put money in to access what is on here. However, when first starting, there will be limitation on what one can do. As one progresses and grows, either via investment or effort, the limitations will be lifted. Each SP will provide one with more access.
And isn't this how it should be? Those who give to the blockchain benefit either through direct SP or delegation from others who believe in them while those have other motives do not.