SMT's or Smart Media Tokens. Are they really Steem's saviour?
image from unsplash.com by Fernando Venzano
It has been suggested that SMT's will unlock the ability to add value to Steem in new ways. They may also enable the formation of new communities and enable the onboarding of existing communities to Steem. That all sounds really positive and no doubt, having sub-tokens (whether they are within a dapp on a general purpose blockchain network like EOS, or on an application specific blockchain network like Steem,) will provide added value and flexibility to emerging sub-communities and scope for additional utility.
However, in the case of SMT's for Steem, I have a grave concern.
As the majority of Steemians are aware, there exists presently, an extremely serious and disruptive imbalance within the economic incentives that govern the behaviour of participants on Steem. The imbalance is primarily due to Steem being massively centralised alongside an imbalance in economic incentives between upvoting and flagging content, positive and negative curation.
This imbalance means there are a large number of losers and a small number of winners on Steem. What's more, less scrupulous accounts exploit the network to make huge parasitic gains, growing stronger and potentially gaining influence, whilst everyone else grows relatively weaker. Other strong accounts who might do something about it are either paralysed by the punitive incentive model, passive or joining in to keep up.
I ask you, does this sound like an experiment that is complete and ready as a platform on which to build further economic complexity and risk? Is this a platform on which people should be investing in sub-tokens or moving their existing businesses and communities onto, given the often abusive power and influence hanging over them? A community using SMT tokenX may not be aware of abuse happening on Steemit with Steem, but they will sure feel the effects. All economic potential flows down and out from Steem, which is at the top of the pyramid. Even if Steem is highly valuable, that will make the current centralisation worse and the potential effects even greater. Given the problems within the steem economy, I think launching SMT's are a very bad idea.
The SMT Whitepaper refers to Proof-of-Brain.....
"Two unique properties align incentives and make SMTs “smart and social” compared to other tokens (such as bitcoin, ether and ERC-20s). The first is a pool of tokens dedicated to incentivizing content creation and curation (called the “rewards pool”). The second is a voting system that leverages the wisdom of the crowd to assess the value of content and distribute tokens to it. These two unique properties when combined are referred to as Proof-of-Brain, which is an entendre based on Proof-of-Work, meant to emphasize the human work required to distribute tokens to community participants. Proof-of-Brain positions SMTs as a tool for building perpetually growing communities, which encourage their members to add value to the community through the built in rewards structure."
The name Proof-of-Brain is somewhat disingenuous for at the time the SMT whitepaper was written, I believe the authors were well aware that the current flawed process by which the reward pool is allocated is not that smart and borderline anti-social. What's more, how much of the reward pool is distributed by "human work" rather than bots, trails and payvote services? Communities cannot grow perpetually in a system where the backbone economics is so flawed and though some of the effects may be occluded from view through the use of communities and tokens, eventually the centralisation will become apparent and will have severe consequences. The risks of building a sub-community using a sub-token on such a platform are profound.
The SMT whitepaper focuses heavily upon turning steem into an ICO machine like Ethereum. Does anyone else question this path? There is barely any mention of the potential regulatory compliance issues that may arise and entangle the Steem network. ICO's are widely regarded by regulators as securities offerings and subject to scrutiny.
If the imbalances within the Steem economy could be addressed before SMT's were launched, that would go a long way towards addressing many of the use cases for SMT's. The regulatory compliance issues are something else.
There is a way I think Steem's imbalances could be addressed and I've written about it in several posts already....
I believe the solution is to put a massive amount of Steem Power into the hands of the Steem community, entrusting hundreds of community elected curators to deploy that power to combat 'abuse.' The definition of abuse would be defined by the community and the curators would be held accountable for their adhesion to that definition. The only source of Steem large enough for this and with an outside chance of being deployed in such a manner, is that held by Steemit.inc. The steem held by steemit.inc was always mean't to nurture the Steem blockchain and to support the fledgling community, what better way is there to accomplish those goals?
I would be very interested to know if you share my concerns or if you believe SMT's will not be affected by the present imbalances in the Steem economics.
For an alternative point of view, and I respect @dana-edwards views and contributions very much, please visit this post...
.....and of course, please don't forget to read the SMT whitepaper !
Happy Steeming
Here is my response: https://steemit.com/smt/@dana-edwards/steem-must-improve-and-the-key-metric-for-that-improvement-is-utility
Thank you very much for the time you've taken to add depth and a rational alternative viewpoint to the discussion.
Hey @benjojo,
You've made a lot of good points here and elsewhere lately. These are issues that are uncomfortable for the community to address. I also have to agree with you that there are issues on the platform that need to be addressed before mass adoption can occur.
I've read your proposals about delegating more power to more minnows/dolphins/users and while I don't know if it could work, I appreciate the fact that you're bringing some sort of solutions to the discussion. I honestly think, in the very least it could be experimented with. Even though you've powered-down, I think that you're someone who's been on the platform longer than most and have a good idea about the platforms strengths and weaknesses.
When I think about the state of Steem it worries me that some of the most glaring problems seem to be completely ignored. If Steem/Steemit is to be successful, the issues need to be brought out into the light of day and addressed directly. Inequality and power being concentrated in a small number of accounts is a real problem. If mass adoption is to occur, and new users flock to a platform that is severely imbalanced and operates much like an oligarchy, I don't think their going to want to stick around. Just my two cents.
Thanks for saying it like it is. Steemit/Steem can still be something fantastic that benefit so many and I hope it does but if Steem inc and the community continue to ignore some of the underlying issues they will boil to the surface and could cause irreversible damage to the platform.
Hi V4vapid, I really appreciate your words of support. I'm far more comfortable being a cheerleader and advocate than a stick in the mud. I'm here raising these issues because steem and steemit have given me so much, is the most incredible community and example of what is possible. There are two questions I think it is extremely important to answer....can steem/steemit be drastically improved in a timescale that is relevant? If not, can the best of everything here be salvaged?
Despite having powered down, I feel I still have a responsibility to this community. The best way I can think of to help is to raise these issues, generate discussion and see if they can be addressed.
The way I see it, we all need to end up on a platform like this because there is so much scope for improving life everywhere......I don't much care which one it is as long as it works as best it can. So the best way to find out is rigorously challenging all of the options available, including Steem until one shines through.
I hope everyone get's the most they can out of Steem and Steemit, but preserves at least some of the value they are generating. Being aware of issues can give people perspective and help them make decisions.
None of the issues I've raised are easy to solve but I think we need to try a little harder to do it or like you say, eventually it will all catch up to us.
Thanks again bud.
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Hey @benjojo. I hope your day is going well, my friend and thank you for such agreat post explaining your thoughts really clearly. I'm not as familiar as I could be with SMT's and their potential for the future of steem but I do share your concerns about the condition of the platform now and going forward, especially in terms of the abuse taking place and it's implications for expansion.
I've just posted a suggestion for confronting the abuse of vote buying and selling on the platform by way of the creation of a community bot to tackle the problem in a different way. If you have a few minutes, I'd appreciate your thoughts. It's a stab in the dark from a guy with not much technical understanding but I think it's an idea that could work.
https://steemit.com/steemit/@tonyr/a-suggestion-for-ending-the-vote-buying-era-on-steemit
Cheers mate. Enjoy the rest of your day! :)
I'm new on Steemit, and after discovering it I have been a "head in the clouds" about it type person since I joined. Since I'm a noob, I really only understood what a bot was recently , I also didn't know how the reward pool works. I have to say, its important to read about the potential problems with Steemit too. I like to think of myself as a balanced person usually, seeing both sides...that really isnt the case with me and Steemit so far. Now that I have read this, looks like I have some more reading to do. I only read about SMT yesterday, so I have no idea what the implications of them are. Looks like I have to come back to Earth a little bit.
Welcome to Steem and Steemit! Please don't let the politics and economic intricacies stop you from enjoying what is an astonishingly incredible tool. The most important thing to remember is that Steemit allows you to connect with people in a new, refreshing way. This is a community that will endure whether it is on Steem or elsewhere. All the passion and concern that you read about Steem or Steemit is there for good reason, because it's worth it and because people are being inspired. That's great however you look at it.
There is a steep learning curve but there are a lot of very good guides that have been made by fellow Steemians. It shouldn't take you long before you are up to speed and adding your opinion to all the debates or just ignoring that side of it :) I hope it's the former because this technology is changing the world and it deserves our passion, attention and time to make sure it's right.
I wish you the best of luck.
Thanks for making me feel better, :). I do plan on giving Steemit a real go. Just gotta give it my best and see where it leads me. I have never written content before so all of this has been overwhelming. Goodluck to us all :)
Good post!
steemit.inc could restore balance... but would they? These problems exist for so long yet nothing has really changed.
I agree.
Success is a journey, not a destination.
I'm not inspired by the SMT developmental updates so far, as responses regarding questions almost always refer back to the white paper, which itself is ambiguous in many areas, such as the SMT creation fee. I recently asked about it and have yet to receive a response that the lay person can understand.
upvote..!!!
sorry my vote not be make money..!!
cause my steem level is so little..!!
i need mercy please upvote my post just one i really happy thanks myy buddy..!!!
Some really astute questions there @benjojo, I will need to go and read your other posts as I just found this perusing the new section. But the concerns are real and with a new released based on them may just exacerbate these issues. I am not tech savvy enough to offer solutions, just a thanks for this intriguing concept.
Thank you. I really hope to generate some attention and debate on these issues that could affect the long term viability of Steem.