How Medium Can Morally Monetize In One Month Using STEEM

The Vision
I respect Ev Williams (co-founder of Twitter and Medium) because he envisions, as I do, a world in which content creators are compensated based on the value they add to their consumers (how much better they make the lives of their audience), as well as the value they add to everyone else. But most importantly he has the courage to pursue this vision even in the face of adversity.

Imagine a world where people aren't paid based on how "clickbaity" the title of their article or YouTube video is. Where they aren't paid based on how useful their content is to Ford and Pfizer. Imagine a world where you are rewarded based on how accurate your information is and how trustworthy you are as a source.

It's a vision so noble it might appear fanciful, arguably delusional. However, I happen to know for a fact that recent technological developments make it possible. Trivial even. In the following paragraphs I will demonstrate how Medium could monetize their content in as little as one month in a manner that puts them an order of magnitude closer to executing on their vision and I will explain the existing technological protocols that would enable them to do so.

In fact, they could execute on their vision completely.

The Challenge
The issue, as Williams makes clear in his post, is one of incentives. In other words: money. In enterprises there are typically two forms of money that are used to incentivize workers: cash and shares (a/k/a stock). Cash is a liquid form of money that can be used in our everyday lives to buy the things we want and need today. Shares are an illiquid form of money that can't be used in our everyday lives, but whose value is directly proportional to the value of the enterprise; value which can be captured at some point in the future by converting it into a liquid form of money. Up until very recently the only viable candidates for these two forms of incentive were currency (e.g. US Dollars) and shares in a corporation. Unfortunately, currency is extremely expensive to move around, especially in small quantities, and it must first be acquired. Just try sending someone 25 cents. Now try sending one hundred thousand people 25 cents. The solution I am proposing already executes such transactions thousands of times a day with zero transaction fees.

What’s better, adopting a solution that works right now, that’s open, that’s free, or building your own monetary system from scratch?

Distributing shares to people would be even more problematic. Shares in a corporation are a heavily regulated legal fiction and their distribution is also highly regulated. Further, they grant shareholders special rights with respect to the organization, e.g. the organization has a fiduciary duty to all shareholders. Merely creating and distributing shares in Medium to any person in the world who creates content for the platform would not only be a legal and logistical nightmare, but it would be practically impossible for the corporation to satisfy all of its responsibilities to its shareholders. Most importantly they would be faced with the challenge of becoming a monetary authority. They would essentially become a central bank in charge of controlling multiple money supplies as well as the process through which they are distributed. No simple task, just ask the Federal Reserve.

One Month?!
Bearing all of this in mind, one might be tempted to label my title as clickbait; it's not. In order to solve this problem in one month (though in reality it is highly unlikely that Medium could solve this problem on their own ever) what they would need is an existing, open protocol, designed to create and distribute 1. cash and 2. shares based on the subjective value of their content creators. Ideally this open protocol will have operating proofs-of-concept that demonstrate both that the protocol is functional and has sufficiently robust developer and investment support to guarantee its continued operation.

What Is Valuable?
Before I delve deeper into the protocol I would like to address a major issue: distributing money based on value. This is easier said than done. Just look at the complex network of institutions we have developed in the United States just to serve this purpose. The Federal Reserve determines the supply of "cash" (a fiat currency we refer to as "the dollar") based on an ever growing set of hotly debated criteria which it then distributes throughout its small but decentralized network of regional Federal Reserve Banks.

The Federal Reserve system then outsources the determination of value to independent but certified private banks, the employees of which are trained to assess a loan applicant's potential productivity and distribute funds accordingly (also using hotly debated criteria). It is these banks that create the majority of "cash" by lending out every dollar they are given by the Federal Reserve System multiple times over. Simple right?

This system is by no means perfect. Very few people, especially in banks, are good at predicting what ventures will be successful. It shouldn't come as a surprise that the people at the banks in charge of distributing the money only lend it out to entities they believe to be the most secure (like companies that are already huge) while also spending a lot of the money on themselves.

Cutting Out the Middlemen
Fortunately, since the creation of Central Banks there have been a few technological developments, all of which served to eliminate the necessity of various middlemen who had traditionally been seen as indispensable. The most obvious of these is the Internet. But when it comes to the issue of creating money without middlemen one technology stands alone: cryptocurrency.

Cryptocurrency
Bitcoin is obviously the most well known of the so-called "cryptocurrencies" but it has several attributes that make it untenable as a solution for Medium; it is not a programmable blockchain, it would require a large up front capex to acquire the tokens which it would then distribute, and it has no mechanism for rewarding people shares. Neither does Ethereum. There is only one viable crypto I know of which Medium could start using now, that's programmable, that is designed to issue both shares and cash, and which would cost them nothing. It’s a protocol named STEEM.

Just Use It
I’m not the only one who thinks so. Earlier today Fred Wilson (Co-founder of Union Square Ventures and investor in Twitter, Tumblr, Foursquare, Zynga, Kickstarter, etc.) posted an article titled, “Online Publishing Should Look At Steem, Not Spotify, For Inspiration.” But why look to Steem for inspiration when you can just USE it?

STEEM
STEEM solves the problem of how to distribute cash and shares by outsourcing the determination of "what is valuable" to the crowd of people using the service. Instead of asking an intermediary to guess what products (in this case content) people find valuable, it provides the people with the ability to communicate (through “upvotes”) how valuable they think something is, and then the Steem algorithm automatically distributes both cash (called Steem Dollars) and shares (called Steem Power) based on the collective and subjective determinations of those people. A key innovation of Steem is that the more "shares" you are able to earn the more money your vote distributes. In short, if you create a lot of content that a lot of people judge to be subjectively valuable, you are rewarded for your efforts not just in cash and shares, but in INFLUENCE as well. And it does all of this without charging ANY FEES.

If one is sincerely interested in creating a platform that motivates creators to make content that adds value to people's lives and rewards them accordingly, I can't think of a better way than putting the power in the hands of those very people to determine who is rewarded and who is not. Since no one is the same, it is not possible for any intermediary (no matter how noble they claim their intentions to be) to accurately represent the needs of a large and diverse group of people. The only option is to distribute that power to the people. And Steem does just that.