The Real Value of Steemit
I have read a lot from users that are hooked on Steemit because it pays them to write and share their views on the internet and of course this is great and I am glad that we have so many excited bloggers are writers that are finally getting paid for their work instead of making someone else money with their page views.
However, I wanted to take a moment and try to explain why I think steemit is much more than just a platform that pays to write and vote.
Delegated Proof of Stake (DPOS)
Bitshares (Also created by @dan) was the first platform to implement DPOS, which is a different “mining” algorithm that has proven to be more efficient and democratic than traditional Proof of work (Bitcoin) or Proof of Stake (Peercoin). According to Bitshares.org DPOS is:
… the fastest, most efficient, most decentralized, and most flexible consensus model available. DPOS leverages the power of stakeholder approval voting to resolve consensus issues in a fair and democratic way. All network parameters, from fee schedules to block intervals and transaction sizes, can be tuned via elected delegates. Deterministic selection of block producers allows transactions to be confirmed in an average of just 1 second. Perhaps most importantly, the consensus protocol is designed to protect all participants against unwanted regulatory interference.
All of these may seem too complex at first but it really is quite simple; unlike Facebook, Reddit or Twitter, Steemit runs on top of Steem’s Blockchain, we could say that steemit it’s an explorer of steem’s Blockchain and it shows us what writers have put on it.
Now, Witnesses are those accounts that run a programs (nodes) that put our information on the blockchain and for that they get a reward in the form of Steem Power, this is why most witnesses hold a lot of SP which also makes them big stake holders of the platform.
We can elect witness and therefore decide who should be getting these rewards, this is why witnesses have a direct responsibility with the users and the platform as a whole and we choose them so like politician they should work for us, some of them even provide valuable services like Steemd or Steemle. Witnesses also get to decide which software gets implemented by upgrading or not their nodes.
Conclusion
Steemit is yours, if you write and hold SP you are part of this “company”, you can choose who gets paid to be a witness, what software gets implemented and you could even become a witness yourself if you wanted to and convinced enough users to vote for you.
This for me is the real value of steemit, it’s up to us to make this work so lets try to not fuck it up!
As a noob, the value of steemit confuses me. It seems like a funnel that transfers wealth from people that buy into it, into the accounts of the most popular posters. Kind of like an online magazine, except that its all free to read with no ads or any kind of stated way to make income.
Is there more to it than that, (besides the obvious generic cryptocoin related features and incentives)?
It's more like this: Steem constantly transfers wealth from those in the Steem ecosystem who are passive and do not contribute to those who are active and contribute. You contribute by posting your own content or by curating other people's content or both.
But you are right in some sense: there needs to be about 10% annual growth of the Steem ecosystem for it to be able to sustain the equilibrium. If the growth rate exceeds the threshold (around 10%) even those who are passive will benefit (but those who are active will benefit even more). However if you are passive and there is no growth, your investment will have a negative rate of return.
The good news is that achieving a 10% growth (or higher) is very plausible for a start-up, especially in the crypto-space. After a couple of years, when Steem can no longer be treated as a start-up, the economic model will have to be adjusted so that it does not rely on its own expansion so much - but at this stage the economic value of the underlying monetary system (Steem dollars) will be huge and probably easy to monetize (imagine millions of people having millions of Steem dollars to spend).
For more details please refer to the white-paper.
This is an EXCELLENT summary. Very well clarifies some confusion I've had simply and straightforward.
Thank you for this perspective.
Cheerleading is very profitable here too.
Yay!
haha yeah, this happens now because steem is not well distributed and whales have way to much influence.
Agreed, this is getting good. The people own their own contributions finally and could even profit from it. It is all the users that matter as they create the network effect.
steemit healthily
thank you for taking the time out to explain the witness thing. I keep seeing it and was confused on what it was till I came across this post.