The Concept and Criticisms of Steemit - CBRI Discussion Paper: Notes on the 21st Century

^{(Originally published on 23 February 2018. Updated & revised on 22 February 2021 to reflect changes to
the Steemit context. )}

Usman W. Chohan, Economist at UNSW Business School, Australia, and Research Director at Critical Blockchain Research Initiative (CBRI) has written this research paper to extend the discussion of cryptocurrencies towards their enmeshing with other aspects of technology, including the case of a blockchain combined with social networks and blogging in Steemit, and its challenges of legality, economics, legitimacy, technology, and its cryptoanarchist shortcomings.

The author mentions Steem's unique proposal, which has been acknowledged by external agencies. Weiss Ratings, an American rating agency, published their first cryptocurrency rating report in January 2018, giving STEEM a "B-" grade, which was higher than the largest and most popular cryptocurrency, Bitcoin. Steem's rating has remained stable in successive Weiss Ratings assessments. In their monthly blockchain report in 2018, CCID Consulting, China's largest research, consulting, and IT outsourcing service company, ranked Steem in the 10th position.

Then the author criticizes some aspects of Steemit platform. The purposeful relaunch of the currency to ensure centralization is one risk with Steemit. Another risk arises from system manipulation that undermines cryptoanarchist concepts of self-governance and community policing. Vote-buying, bullying by richer members of the site, monopolization of influence to establish policy, overt control by affluent users, and forced censoring are all examples of this.

To summarize, while the new notion of meshing social networks and cryptocurrencies might lead to substantial advances, the misuse of cryptoanarchist philosophy creates basic accountability issues. Future versions of Steemit and other social media platforms must stay alert and aware of the structural issues that might develop in the widespread use of cryptocurrency.

Abstract

This paper examines the concept and the criticisms of Steemit, with a view to situating its difficulties in imposing a self-regulating cryptoanarchist information network, as well its interesting meshing of blogging and social networking with a blockchain (Steem) database. This raises questions about the structures of accountability in the cryptocurrency realm, and of the abuse of cryptoanarchist principles in practice.

Read the full version of the research paper from SSRN: The Concept and Criticisms of Steemit