All systems have flaws and Steem is no exception. The good news is that they can be fixed.
The more successful a system becomes, the bigger imperfections grow. Like cracks, the more strain you put a system under, the more a flaw expands its weakness through the entity.
We have seen this at work with Bitcoin, where the Bitcoin Cash hard fork and the Segwit changes were just outcomes of the runaway success of Bitcoin. That success turned chronic issues into acute situations.
These problems were overcome because of the political structure of Bitcoin. Bitcoin is distributed enabling a struggle to take place that created a positive outcome.
Steem has flaws.
Currently the 'Steem Witness system' is a big flaw.
The Steem witness system makes Steem the opposite of distributed. The Steem witness program concentrates power.
This concentration is demonstrated in the structural form of handing the ‘Top 20’ witnesses over 90% of the revenue from Steem’s ‘masternode’ style witness system.
Almost all the other witnesses, which are meant to be part of the way the Steem network is served and protected, get crumbs from the reward system, with many ‘witnesses’ outside the top echelons getting nothing.
Its like the Top brass of the Police getting all the pay and the street cop getting little or nothing. (BTW This is one of the root causes of corruption in the developing world. The concentration and centralization of power is bad.)
Other masternodes systems do not take this winner takes all approach. If you are a masternode, in say DASH, you get a fair share. This is likely why a DASH masternode has gone from costing $1000 to being worth $300,000. It is also a contributing factor for the coins price flying high.
Masternodes are extremely interesting. I am and have put together several for various coins.
They are fun and profitable too. If the coins go ballistic they will make huge returns for the owner.
For instance I have just set up a masternode for DAS.
(Not to be confused with DASH)
The DAS Masternode is cheap at around $230 and is paying roughly $1 a day. (Over 1005 a year return)
If the coins take off the Masternode will pay out big.
DAS is traded on Novaexchange and featured on excellent, www.Masternodes.pro site.
(There is another doppleganger coin on Cryptopia so be careful.)
DAS is paying me $1 or so of coins a day, while my Steem witness has paid me nothing in the 10 days since its been up.
What is worse is my Steem Witness is nowhere to be seen in the ‘never reach the top to get a block’ Top 200 witness queue.
Now I could dream of reaching the Steem Witness Oligarch Top 20, but that can never happen. When a Top poster and master booster like @jerrybanfield can’t even get higher than No. 50 with a bombardment of posting, pleading and generous help, you know it’s a stacked game.
Contrast DAS, a coin worth a tiny fraction of Steem (Steem $300m v DAS $0.5m)
Yesterday my Steem witness reward for ‘witnessing’ was $0 , while for running a Das Masternode I got $1.
In the next month Steem $0, Das $30.
In a year? My Steem witness rewards are likely still approximately $0, my DAS $360.
….and lets not even talk cost to me, because Steem is about $70 a month and DAS, zippo.
Oh and I don’t have to grovel for votes with a DAS Masternode.
But as a Steem witness I better bow down and get on with it, so:
"Oh pretty please kind fellow will you spare me a little Steem witness vote. I’m ever so in need, I just need a few so I can get
myself enough for a cup of code to help my needy $350,000,000 cryptocoin community."
(Thats not the right way to do it... how can you ever expect to slip your way up the greasy pole of witness-hood with that kind of attitude. Get to work adding to the community that pays the Top 20 so royally.)
In any event, sarcasm aside, the chance of ever earning from a Steem witness system is very small, while the chance of DAS going through the roof is pretty high.
The way Steem concentrating maintenance of the blockchain in a small group of self-interested oligarchs is fraught with risk. Will it scale? If it doesn't, can it change?
If you believe decentralization is good and core to Cryptocurrency success, the Steem Witness structure is a major and potentially fatal weakness.
…and there is another flaw.
Recently two great services have been created around Steem and IPFS.
Dtube and Dsound.
These are great ideas, extremely well implemented. They could be huge.
Dtube is a potential competitor with Youtube, while Dsound, Spotify and the like.
As a video maker and a musician I would love to use them but they are crippled and probably doomed to be used for only piracy and sock puppet Steem income skimming.
What is that flaw?
The fatal flaw is music or videos uploaded will only earn for 7 days after the post is uploaded.
There are no ‘long tail earnings.’ That is to say if people love your work next week, month, year, you wont earn a penny from that.
As a Youtuber I can tell you, 85% of my income is 'long tail' and only 3% is from videos that are less than 8 days old. The same goes with my music, most of my music earnings are made by tracks that are years old.
My music back catalogue pays for me to make the music I do now. Classical Chill which is nearly 10 years old, paid for my latest Album Lullaby. (Available on all good streaming services and iTunes. 😊 )
Lets say by magic, Dtube explodes and I can get as many views on Dtube as Youtube. Lets say I was scraping a living of $22,500 a year on Youtube which is the official US poverty line. Swapping to Dtube would mean my income would collapse to just $675 a year, solely because of the 7 day earning limit.
So the reality is, my videos can noty be financially sustained on a system like Dtube.
It not even worth my wile to upload my catalogue at minimum wage rates…. and that’s even with the systems running with huge traffic.
This is solely a function of the 7-day earnings cut-off, nothing more or less.
If the track could be sat on the system coining in a cent or two, a day, or even a week, then the creator can look into the face of eternity and imagine their work rolling in money over their lifetime. This is a strong emotional incentive, even if it only means a dollar or two a year.
The 7 day rule cripples Dtube and Dsound and invalidates them for use by artists who need to make an income from their work. The world doesn’t need another ‘promotion’ platform for content. It needs a way for creators to be remunerated and Steem isn’t it for music and video with the ‘7 day’ remuneration limitation.
The ‘Steem witness’ system and the ‘7 day’ reward rule are flaws in STEEM that will need to be adapted. If they are not they will cripple a lot of the future potential of Steem.
My guess is that Steem at its core is not distributed and will not adapt.
That will be a pity, because I would love to contribute music and video to the platform and for that matter earn my costs back as a witness, but currently Steem doesn’t enable me to have that relationship with its community.
…but it would be tremendous if it did!