Steemit —  Skam or Incentivized Social Media Platform?

No doubt,  the world has seen a number of innovative, obscure, and often suspicious  looking social platforms popup on the web in recent years. The latest  to hit the social scene is a platform called Steemit, who’s CEO Ned  Scott, calls it an “incentivized social media platform” that pays its  users with the digital currency Steem to post blogs on their favorite  subjects. While I’m all for trying new social platforms, and I’m not  discounting its worth checking out, I’m definitely approaching the  platform with extreme caution, as there’s a few details about it that  just don’t add up. As the old saying goes, if it sounds too good to be  true, it probably is. Whether or not that happens to be the case with  Steemit is left to be said, but there’s a few things you should know  before jumping in and assuming you’re magically going to get rich from  it.For  starters, Steemit pays users based on the engagement their blog posts  garner from the platform’s audience, specifically from thumps up on  posts. The more thumbs up your posts get, the more likely you are to get  paid. The platform has already made its first lump sum payout to users,  a whopping $1.3 million dollars back on July 4th. Half of this was paid  with the Steem currency, the other half with “Steem Power”, a platform  specific currency that gives users more voting power.The  problem is, such a system that relies on thumbs up metrics to gage the  worthiness and overall value of content is a system that’s likely easy  to game. Anyone could simply register with as many virtual IP’s as  possible and thumbs up their own content in mass.Another  cause for concern is the fact neither the platform nor its CEO can  explain where they’re pulling revenue from. While Scott stated they had a  quote, “Super Angel Investor”, this doesn’t explain much to the public  as far as how much capital they received, and how exactly they’re  earning revenue. How does a platform that has no source of revenue of  other than investors afford to pay out millions of dollars to its  members when there’s no money coming in?I’m  highly skeptical for the simple fact this platform can’t explain where  its revenue comes from, and its magically paying people to blog.On  the hand, the digital currency utilized by the platform is currently  rated as the 5th largest in terms of market capital, out of an estimated  657 digital currencies currently tracked by Coinmarket.What’s  more? Since the platform made its first initial payout back on July  4th, the Steem currency’s value has skyrocketed more than 1,000%, with  one Steem being the equivalent of $1.75 U.S! That was the currency’s  price on Tuesday July the 12th, when the Steem currency’s market cap hit  the $158.8 million mark, a huge leap from its previous value on the 4th  at roughly $13 million. Today however, Coinmarket cap shows the Steem  currency at $4.23.


Are Incentivized Social Platforms The Future of Social Media?Without  a doubt, Steemit isn’t the first social platform to offer incentives  for people to jump aboard. TSU was the first of its kind to offer  payouts to its user base, although there’s striking differences between  the way’s TSU and Steemit both operate. With TSU, the platform pays  users a cut of ad revenue share, along with a cut of revenue from those  who used their short links to sign-up for the platform. But Steemit is  totally different, as the platform is powered by a digital currency  that’s easily converted to Bitcoin.As far as TSU goes, I’m yet to see one person who’s ever earned anything more than a few dollars from the platform at most.On  the other hand, with Steemit, the platform has routinely paid out  substantial sums of money to its users, often in the thousands range for  a single account.One  thing to note about the idea of incentivized social media is that,  where there’s money, there’s also the potential for rampant fraud, as  well as mass spam. When TSU first launched, our social networking  community on Google+, Strategic Social Networking, got hammered with  short links from the platform as users hoped they would get others to  join so they could earn more revenue.TSU  really looked more like a pyramid scheme than anything to be honest. In  fact, those short links were so out of hand we banned any links from  the platform itself to keep spammers out of our communities.Does  this mean that incentivized social media can’t prevail? No, definitely  not. In fact, bloggers and independent journalists have long been on the  lookout for more viable ways to monetize on their account, especially  in a world where third-party ads are typically blocked by ad blockers,  and ad revenues as a whole have been sliding off a cliff for years. Back  in the glory days of blogging, bloggers used to make good money from  things like Affiliate ads and Adsense, but I know from personal  experience that those once tried and true forms of monetization are  sliding off a cliff and are soon to meet their demise.


Why You Should Be Skeptical:Upon  first glance of Steemit, I noticed the profiles that were earning money  were typically earning thousands, and often had post after post with  hundreds of dollars of tallied revenue on hand, while other accounts had  nearly as many if not more posts of the same quality, yet they had  almost no revenue at all. One has to wonder if some of these profiles  are merely sock puppet accounts formed to create the illusion of easy  money. It all just sounds way too good to be true.Also,  as I mentioned earlier, the platform itself can’t seem to explain how  it earns its revenue or where it actually comes from. We know from the  recent news stories across the web that Steemit invested heavily in the  Steem currency, which has risen sharply in value in just a matter of a  few short weeks; but if this just so happens to be their only viable  source of revenue, that means they’re essentially gambling in hopes of  earning revenue.One  attempt to add credibility lies in the fact The platform is powered by  Steem’s open source block chain, in which Steemit’s CEO Ned Scott  insists the entire platform can be replicated on any front-end  application, and viewed using any block chain explorer. Scott insists  censorship is easy to prove for this reason, and so users can feel  confident to post how they really feel.This  could be a good thing as, the public is definitely getting tired of  being censored across social platforms where they often have no valid  way to determine if the platforms they use are blocking their opinions  or not. Some platforms like Facebook appear to be quite overbearing when  it comes to controlling the visibility of users, their ideas, and the  content they post.


The Potential For Fraud:Digital  currencies have long been the subject of fraud. From the hundreds of  millions of dollars worth of Bitcoins that magically disappeared from  Japan’s Mt. Gox exchange, to the many unknown and often shady digital  currencies that come and go, and often manage to make investors money  disappear when they do.The  fraud that took place with Mt. Gox is also worth noting, especially  considering the fact it was handling roughly 70% of the world’s Bitcoin  trades at the time it folded. How does this relate to Steemit and the  Steem currency? Investors appear to be pouring money into the digital  currency on a large scale. One Steemit user stated they’ve already  invested $20K of their own money into the Steem currency so far.Let’s  face it, many have already had their Bitcoin wallets get burned, and  financial institutions appear to be treading with caution when it comes  to digital currencies as a whole.


Why Aren’t Others Offering Incentives?Besides  the incentivized platforms, other social networks like Empire.Kred have  long embraced a virtual currency system they use within their platform,  that believe it or not, once upon a time had some serious marketing  power! Previously known as Empire Avenue, the newly minted Empire.kred  platform uses a virtual currency called Eaves that can be used to invest  in other members upon the platform’s virtual stock market. Eaves can  also be used to run “Missions” where users are paid with the currency to  check other members content across the web.There’s  some stark differences between Steemit’s model and Empire.kred’s  though. While Steemit uses a digital currency that’s easily convertible  to Bitcoins, and subsequently U.S dollars, Kred’s virtual currency  doesn’t appear to have any real world value. While there currency only  has value within their platform at present, it’s possible things could  change in the future, especially if more incentivized social platforms  continue to popup across the internet.Unlike  Steemit, Kred has a few things that could really add value to their  virtual currency, including the fact that some of the world’s top  bloggers currently utilize the platform to help measure their influence  and social impact across the web, and even major players like Nokia and  Intel have accounts there.All  being said, the entire idea of incentivized social media is still in  its infancy for sure, and its likely someone will eventually get it  right. While whether or not Steemit is actually legit is left to be  said, there’s one thing that’s for sure, either the platform is set to  forever disrupt the world of social media in incredible ways, or its the  world’s biggest scam. When the day comes that an entity can make  incentivized social media work, it’s more than likely we’ll see a  massive shift of social users follow.