Centralized Steemit
Steemit is a remarkable place. And I mean Steemit for the purposes of this post, with full awareness that the Steem blockchain offers much more than this. A social media website where the participants decide how much content is worth.
But recently I've gone through a particular thought exercise, which is to answer the following question:
What would the fully centralized version of Steem+Steemit look like?
Is it possible for this to exist in a non cryptocurrency world? Because from what I hear, the idea of a microblogging platform where content creators are tipped... Well that's been tried and flopped (someone help, I can't seem to find what I am thinking about...).
But let's try to take Steemit's existing structure and somehow inject it into an existing model. Here's how I think it might look:
- Steem Power corresponds to special vesting stock units that cannot immediately be sold and grants voting rights.
- Steem corresponds to stock.
- Payouts are issued as partially Steem Power, and partially as fiat dividends. There is no SBD here.
At its beginning, the company announces a set schedule for the dilution of its stock, which will occur on a daily basis. The target will be to inflate the number of stock units by 8% a year, which will be tweaked as the company sees fit. Of the stock units created, 75% of them are liquidated immediately and distributed to users of the platform, and the rest is granted to steem power holders in the same way.
And I guess the stock holders can convert to the steem power special stock units (does this kind of thing exist where stocks get converted back into some other form of vesting instrument...?)
Anyway, suppose this structure could all be done. I know there just tons of logistical nightmares waiting to unravel ha.... But basically as a user you wouldn't notice, and you get the added convenience that the way you'd be paid is actually in Fiat already.
Is this something investors would be buying? Do you think they'd buy into something which is intentionally being diluted on a daily basis? Would they opt instead to stake and try to recover as much of their percentage of stock as possible? Analyzing in this way, what's the projected revenue? If the platform can get a lot of users, and there's more tools to help advertisers reach them, that's one angle.
This is kind of a follow up to some interesting discussion I've had with @tcpolymath here and in one other place I cannot remember where we discussed this steem dilution aspect...
But anyway, it's like looking at our current situation and removing various layers of decentralization that exist right now and seeing what's left. It is also interesting to note that such a direct system would not be feasible to build. But perhaps a different system with simplified structure could be made but it just wouldn't be the same (like a pure points system where the more points you have, the more influence you have to give more points... And where points can be exchanged....).
What's a centralized Steemit look like? And can it give us insight to the direction of the decentralized version? We focus a bit about this vague concept of currency value, but relying on this is not helpful because we really aren't sure how to reliably evaluate the value of currencies as far as I can tell. Or they are based on the economy of a corresponding economic system. What's steem's economic system? Now adding back what decentralization buys us? And considering the potential of other applications built upon this?
Steems for thought.
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Interesting thought experiment. While there is no inherent reason a company's stock couldn't be used as a currency like in Steemit, for it to be valuable in the wider world it would need to be listed on a stock exchange, and stock exchange rules and well as regulation of public companies would generally make this system impossible.
Yes, agreed there. But the main reason for this thought experiment is really to see if there's something of comparable value, not whether it is practical to make this system :) . In this scenario, I would also imagine the stock wouldn't be used as a currency at all, and it would be purely treated as equity.
Isn’t this merely a decentralization of equity but otherwise a platform like WattPad, except that rather than actually purchasing, you give the “equity” the power to pay out, pay out as in a form of a zero hour contract payment?
The question here would be how do you operate the platform and what method of payment is available to the platform operators? How do they pay their bills, and their “centralized infrastructure”, as well as their crew?
Sounds right? Does that exist? I suppose I'm not too familiar with what's possible.
About operation, it's all centralized, so the company pays out of their budget, which needs some seed funding, and my guess for sustainability would be to involve advertising $$ once a user growth target has been met :P.
So basically:
🤔
PS: I think you designed Blogspot with upvotes.
LOL! Isn't that how it works?
I think what you are saying is that we can ignore the decentralized equity as a parallel track to evaluating the platform, but I think that's also an important part of this thought exercise in terms of investor behavior. Does that change anything? And the fact that users automatically get it too?
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The decentralized equity sort of exists.
You can go on seedfund, you can join round, you can aggregate as investors or invest in an actual fund.
You can go to the stock exchange. Publicly listed is decentralized ownership.
The real question here is, also because using the term investor, what is your expectation as investor? Do you think you should be heard even if you have only 3%? Or will you go the path towards those oh so elusive 15% or at least close in on those and work your profile to get that board room seat with the backing from other investors?
For investors it’s math. They will calculate inflation. They know dilution in future rounds so nothing earth shattering.
The question is... what do you expect from decentralization. What does that mean towards operating?
I have other questions tho:
What CPM and RPM do you expect?
Etc, etc...
It’s merely math for investors and deciding whether the team are seemingly the right ones to execute and take it to a point of favorable math or follow-on funding rounds. The technicalities... I invest in your team: I want two things. You need runway and need sufficient equity yourself to stay motivated and continue for 5-8 years (math).
Without that... you won’t reach going public level. But you will always be benchmark against your actual revenue and burn. Because were talking fiat. Not the utopia of tokens and “this will become the future”. Whatever my equity is worth depends on previously listed points 1-4, on actual growth first in users than in revenue and eventually in profitability.
Investors may potentially give you more an ICO does but... do you still have the equity available to stay interested?
Interesting questions. Yeah so I wonder... could we sell the idea that this platform is going to really take off because we can attract users on the sole basis that we are giving away money and equity to them? I guess that sounds pretty silly. That's like taking facebook right now and making it bleed money to users. If facebook today announced, hey we're giving away money on a points basis determined by a group of stakeholders, is that what this would look like? Hum.
Not as is now, not without any “transactional” factor to benchmark against.
Feeless, ads free... there Ian nothing which consolidated the value of the token.
There is no Adsense to blogspot. There is no internal ads to Facebook.
There is a Medium which would love to reward its creators an but struggles because doesn’t want to implement traditional ads, with all nowadays compulsory tracking.
But then again many said PayPal and amazon would never pick off either.
One of the beauties of SMTs is that vests will be the one compulsory rewards payment structure. Combined with instant market markers, burning ops, aso... eventually that may lead to STEEM becoming limited supply.
Lol @tcpolymath is definitely the go-to guy for the numbers.
As for a centralized steemit it may not be a bad thing, the ability to remove bad actors from the community would be great, imagine being able to reverse funds stolen in a successful fishing attempt, literally shut down plagiarism and spam, external system like bib bots could either have their power limited or just shut down.
Wouldn't comparing to other crypto projects be an apple to apple comparison ...
Anyone who invests in crypto has the explosive patabolic growth of coins in back of their mind..somewhat different mindset than traditional stock investor..
Yes, but plenty of people are presumably doing that comparison already, and I'm not convinced it makes sense because for example, nobody knows wtf Bitcoin's long term value is going to be (pick a number from 0 to 1 million haha). I'm down for the long term price discovery just by throwing it out there and waiting 10 years to see where it lands, but my comparison here is really just to see if we can evaluate the system in a different way and use that to estimate fundamental value. For example, does the structure proposed, if say it were possible to implement, make sense? It's still not that close to existing social media platform companies.
:thinking:
I invest in traditional internet startups and I have a 30-40x return in mind. Also to make of for the many fails along the road since I actually want 6-8x over around 8 years.
Anything below I can just give funds to a hedge fund manager. Or invest in VC funds.
I like the typo in patabolic though. It sorta explains the utopian mindset... it’s just mash. Mashed patatoes or brains, that I will leave to the crowds.
PS: I am not a trader. I invest long term, I do not trade.
so you are angel investor or series A ...or something like that?
Is that how it’s called?
I think so..for early investors expecting 30-40x one has got to be in on the bottom floor. .
Open to be corrected , since you are the one who has been making such gains. .
I’m indeed very early stage and high risk. Sometimes even capped convertible note early stage, AKA pre-seed.
Yet, I wouldn’t tie it down to a specific round since it all depends on valuation, potential, and of course own financial capability. Often (we aggregate) we will join the next round with follow-on investment as well.
The high target is not because of that “parabolic” dream, it’s to level out the huge number of fails along the road. Otherwise the math just doesn’t work and you’re better investing in an already operational fund (on for example Sandhill Road) or invest in a hedge fund.
Typically I envisage 6-8x across the board but pretty much any average better than 3-4x because that’s available by investing in funds.
Of course, C- and D- rounds often guarantee a much higher financial return since the requirements to join are much higher, but the ROI % is lower. I’m not SoftBank nor Norway though.
The parabolic comment is in context of crypto ecosystem, do you disagree that majority of that crowd is around for the next pump and subsequently cashout ?
There’s a lot of dreamers on this planet. The lottery also always sells more tickets when the prizes have rolled over for some weeks.
So you are angel
Investor or series A
...or something like that?
- itstime
I'm a bot. I detect haiku.
many days this platform feels like centralization to me, the whales are the bankers and planks/minnows working hard everyday to make it out of slavery. now new apps are going to be created to make steemit a "hub" yet we all somehow make coin? yet with the prospect of those who are in control of the apps have our "keys" because to sign in they want those i.e., esteem, etc., which constitute possible hacks or those taking our funds? i've personally had apps take my upvotes and a percentage out of my rewards just for signing up and i missed the "small print." this is all a learning experience but it many ways this has always felt like i was switching out of one banking system into another.
if i'm incorrect please correct me, but you being one of my personal friends, i've come crying to you about these situations. LOL! Sorry E, but thank you for always being there.
If someone said this was going to be easy ... (as the saying goes.)
The bottom line is it takes hard work, engagement, supporting each other and making this a community. Maybe this is idealistic, but it is something i want to have hope in ... that maybe eventually steemit will even out instead of seeing those meme's that make $500 and self-upvotes of $200. who knows?
as i've heard from one of my very wise friends (you), we cannot predict the market. LOL!
yours,
eagle spirit
Heh well I explicitly left out facets of steem that are centralized, but there are a few points I want to focus on here
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@eonwarped i like your heh LOL
+the shift is most welcome, and yes let's see. I'm in total agreement.
you've never steered me wrong! :)
You understand the steem blockchain much more than I do. I look at Steem in a simpler way, new currency are being produced and everybody has a say in who else can get the newly printed currency. To me this is fascinating. I know there are big whale problems, but as it is right now, it's already much more fair than the existing world.
I think the idea of Steem power and stocks are just for the sake of keeping people to stay within the platform and adding more frictions to selling the currency.
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Yes, that's how it is, but the reason I'm asking this question is because I am attempting to discern if there is a sustainable value to the platform when you remove the currency aspect of the equation.
I mean it could work but it would probably be considered a security
Well, I did say that it's a stock :P. I'm not actually sure it would be practical to build this thing though.
Every heard of Synero? It steem like reward but centralized. It never caught on because why invest in it? Not much incentive too. People can call bots bad but they help encourage people to invest in steem
This one? https://www.synereo.com/
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yeah
FOR TSE: It's always interesting to see your mind at work. Scary. But interesting.
Today I learned that Steem might as well function like a company issuing stocks.
It is an interesting way of looking at it, yes. I think the white paper sort of mentions the analogy too, if I remember correctly.
Your votes would be going 50% to curators and authors as now, 20% for shareholders, 25% for company costs and 5% for charity (the fake non-profit company used to evade taxes).
This is how it would go :P
Oooh fake charity. Nice touch lol
I like it, too!!
let make it happen :P