Why Steemit Will Fail
When I think of steemit, I think of all the things it could be:
- Social Network
- News Outlet
- Human Curated
- Business Model
And then I think of all the things it is:
- Social network
- News Outlet
- Human Curated
- Business Model
From a business standpoint, Steemit is a great model. Curators get paid in shares to promote company products; Authors get paid in cash to create products; and overseers leverage the entire thing; The more weight a curator has, the more a product is promoted based on their recommendation. There's a great plus: Other companies can come in and use our service via our API.
The problems with this model are why I believe that Steem will ultimately fail -- unless they are addressed soon:
SteemIt is a Business
As a business -- there must be a constant income for said business to thrive. Sure, people buy and sell steem but the success of the business isn't contingent upon the success of the currency itself: If Steemit's servers were to fail today, steem could still be traded on the open market -- making SteemIt, a parasite to Steem. Parasites which aren't beneficial to their host are eventually dropped. The value in Bitcoin is that there is work involved in earning the coinage. Steem is just generated as the blockchain comes into being. It'd be different if the coins were generated based on the amount of total weight within the network -- that would have a bit of value backing it.
Humans Aren't a Credible Source of Judging Intrinsic Value
Because this is first-and-foremost a social-network, the items curated most are always going to be of a social nature and not of an empirical one. Funny cat videos will always get more likes than studies on Climate Change. This translates into a poor product value because the product serves no purpose, other than to make the user feel good for 5 seconds. The user will ultimately -- within a few years after the general public gets wind of this site -- walk away with no knowledge and no accomplishment in their life.
No New Energy
The third law of thermodynamics infers that in a closed system, energy will always run from the most energetic to the least energy position. Without a constant source of recharge, the energy eventually dissipates into the void. The business model is great but external systems which rely on our APIs, get no value. They are the lesser point of energy and thus, will reap value off of us without putting anything (valuable for us) back into the system. Worse, we've created a model where they get nothing of value for doing business with us. Sure, you can create a site with our API but, what do you get in return for doing that? You don't get company shares. You don't get higher payouts. You just perform a service, catering to our users, for free.
Conclusion
If SteemIt continues with no work to currency backing, and no benefits for satelite companies served (as well as no price for service), it will be a system completely at the mercy of charitable and wilful almage. Its business model will be of a philanthropic nature eventually.
"because the product serves no purpose, other than to make the user feel good for 5 seconds"
What's wrong with a product that makes one feel good? It's the reason there are a dozen or more game systems and thousands of games for each system. It's the reason that "funny cat videos" on youtube make a lot of income. Still informational videos, if done well, also make a good income and receive a lot of views. People need BOTH types. Sometimes I want feel good, make me laugh, types of content and other times I seek out informational, teach me something, content. It really depends on my need of the day. I don't think there is anything wrong with "feel good" content.
Where I think the trouble lies is that when people see the "feel good" content making more money they stop creating informative stuff and we lose out. The venue isn't the issue, people worrying about their views is the issue.
I myself will write what I write here or elsewhere and hope for the best.
Now do I think that Steemit will last for years to come? Who knows. I've written content for many a site that claimed I would get paid only to have it go down in flames. But I've also seen sites like this last for some time and help content creators make some actual money for what they do.
I didn't think YouTube would go anywhere for a long time but boy it is sure still humming along. So I for one am excited to see where Steemit goes and I'm heading along for the ride.
I can see where you're going with the cat and informative videos. I agree but when all the public wants is humor, they're not going to pay attention to anything else. Just look at the current U.S. political climate for an example. People want a show more than they want information. Advertisers pay mere pennies, which forces the author to go where the money is, which is in the show. There's a reason all the news agencies have resorted to drama pieces and comedy news sections are making more than most of the other news segments combined. People like drama more than they do an hour of dry news.
So maybe the answer here is to make the information entertaining. Give good content in a way that makes people feel good. Why does information have to be dry? It's not the venue! It's up to content creators to create content that is BOTH. Slide in something that makes people laugh. Drop in a picture that entertains with the content (just not so many pictures that my brain explodes please). Make a video that shows your personality and makes people smile WHILE you inform them. It IS possible.
My point remains that it is not about the venue. Steemit will not succeed or fail based on what we, the content providers, put up for content. WE will succeed or fail based on that. So I think maybe this particular aspect of the point you were trying to make is not valid. Just saying.
I would disagree. As I said, content advertisers are paying pennies. You literally get a few pennies for 1000 views on your personal blog anymore from Adsense -- of all places. They're paying pennies and the content they're getting in return amounts to pennies. People don't want to do the research because putting together something funny earns more pennies than putting together something funny and informative. And if the steem ecosystem doesn't start to bring in more than it puts out, company shares are going to be worth pennies as well. We'll just have to agree to disagree on this one. That being said, about your comment involving other platforms you've used -- in particular, Youtube -- it started to plummet before they started using advertisers. Why? Because there wasn't a source of value coming into the service but there was all kinds of value leaving it. That's what I'm implying will happen here if a source of value isn't established which is totally reliant upon this site. It's a VERY GOOD business model but there is no source of value generated from it that is being harnessed to power it. That's my only point. There is value (and that is what all the users are seeing) but until it's harnessed, this site will slowly slump downhill into the void. In the YouTube example: the views were harnessed to beef up the image of advertisers. In exchange, the advertisers placed monetary value into the company. Here, the value of the company is leached off of the value of the coin it represents. When the coin value goes up, the company goes up. When the coin goes down, the company goes down. The coin's value doesn't change based on how much the company does or does not do. So tell me again, why the coin needs the company? And if the coin doesn't need the company, what's to stop the company from going under after the coin becomes valuable and the authors of the company from selling all their coins?
Ww, you've given me something to contemplate today. Good piece! I think you made a few good points. Let's hope we'll figure this out in 2018!
It could be backed by strong IPs, there are just so many possibilities out there.