While working on today's Blockchain Times, I ran across this incredible blog post on #STEEM and the Steemit blockchain, so I decided to cancel my usual Tuesday #crypto #news digest and offer a few reflections on the Steemit blockchain instead.
The article is easily the best read of the day, especially for Steemians, and it got me to thinking about why we find charts like this one:
Image created by @arcange
What I notice about this graph is that active users on Steemit was on the increase until January 2018 when numbers started to decline. At the same time, this has been happening:
Image published at Brave New Coin
To top it off, the author points out that
During April 2018 the price of STEEM rose substantially from ~$1.4 to ~4.02 , a rise of close to 400%. In the same month, however, the number of active users dropped. A counterintuitive result that seems to imply that even as STEEM becomes more valuable, users are choosing to ‘Power down’.
The question that pops into my mind is, Why is Steemit losing active users so quickly?
Before I get into that, I'd like to point out that it's difficult to get a complete picture of what is happening from these two graphs alone. There is a lot more analysis in the article and I encourage you to check it out. That said, this data does deserve some reflection.
As valuable as it is, this information is incomplete. What it doesn't tell us is, who are the active users that are leaving Steemit? Are they fairly new users who joined since the initial wave of popularity, or are they longtime users of Steemit? My conjecture is that they are likely fairly new users, mostly minnows.
Another question that comes to mind is this: Who are the users that are powering down? Are they fairly new users (the same group as above), or longtime users with huge piles of Steem Power (dolphins and above)? Again, purely conjecture, but my guess is this group consists of users who have been on Steemit awhile and have decided to liquidate some of their hard-earned SP before the final cataclysmic event of Steemit going belly up.
If that sounds too gloom-and-doom, keep in mind that it is not my sentiment. I'm simply trying to make sense of the tea leaves. Do longtime users of Steemit feel like the platform is losing something, or maybe has already lost something? Are they hedging their bets by powering down and continuing their Steemit activity, or cashing out before it's too late?
Is Bitcoin Steemit's Problem?
I think it's safe to say that Steemit has a problem. Anyone who can't see that has their head in the sand. Now, I'm not here to fix the problem, nor am I going to ascribe blame. I simply want to offer something up for reflection.
You might have noticed that the rise in Steemit activity last year coincided with the rise of the crypto market. In June 2017, the Bitcoin price began its half-year rally toward $20,000. At the same time, there was a slight bump in Steemit user activity:
From the above chart, you can see that the Steemit activity bump in June 2017 coincides with the beginning of the Bitcoin rally last year. The beginning of the Steemit decline in user activity begins with the advent of the Bitcoin pressure releasing in January 2018, and the two declines follow a similar trajectory. Coincidence or a correlation? It's hard to tell.
While it's probable that the decline in Steemit price is corellated with the decline in Bitcoin price, it is less probable that the user activity decline is correlated to Bitcoin price, however, it's possible that the decline in Steemit price is leading to a decline in user activity creating a typical economic dominoe effect. If that is the case, then those users are likely short-term thinkers and not the kind of people Steemit wants to attract to its platform in the first place.
But I think it's possible that another factor could be influencing some of this user movement away from Steemit. I started my Steemit journey in March 2018. Since then, I've heard some grumbling about bidbot abuse, so I've done some thinking on that.
Are Bidbots Steemit's User Experience Problem?
In the way of full disclosure, I have spent the last couple of weeks experimenting with bidbots. Here's what I've discovered.
Steembot Tracker is an awesome tool created by Steem #Witness @Yabapmatt, who is also half of the creative team that sparked the Steem Monsters phenomenon. Before placing my first bidbot bid, I watched the Steembot Tracker for a few days to get familiar with its workings. Then I placed a 50 cent bid and received a sizeable return on my upvote.
Screenshot of Steembot Tracker.
A couple of days later, I did it again. Over a couple of weeks, I placed bids on some of my posts, increasing my bids gradually to 5 SBD per bid. Each time, I saw a return on my investment ranging from 20% to 130%. But I engaged in these activities with a few simple rules in mind.
First, I would not bid on a bot until a post was two days old. I wanted to give my fans and followers time to upvote the posts and secure their curation rewards. That seemed fair.
Secondly, I would not simply bid on posts that earned less than desirable rewards. Some of the posts I boosted with bots had earned respectable rewards without them.
Thirdly, I wouldn't get greedy. If I did not have the SBD to bid, then I only bid what I could afford. I wasn't buying SBD to bid $100 on posts so I could earn more per upvote.
Finally, I would not sacrifice content quality so that I could increase my rewards with bidbots. My usual practice is to write a post then begin sharing it among the Discord groups where I'm active and using the #upvote channels where I've been approved. I've tried my best to follow all of the rules of the #curation trails in which I am a member.
Here are some things I learned from this experiment:
- If I wanted to, I could increase my Steem rewards entirely by relying on bidbots
- A return on investment is not guaranteed. I kept a very close eye on who was bidding on each bot I considered bidding on, and how much those bids were valued. While it didn't happen to me, I could see that if they bid too much and at the wrong time, a person could lose. A discussion with another Steemian confirmed that as fact.
- While several bidbot terms of service mention that they won't upvote low quality posts, I could not discern any difference in how the bidbots treated my posts. Of course, I think all of my posts are quality posts (there's no plagiarism, I give credit where credit is due, and it's all original), but I am under no illusion that my crypto digests are of the same caliber as my #poetry and #fiction are.
I have a feeling that the grumblings I've heard over bidbots the last few weeks aren't directed at people like me. Some Steemians may have an issue with bidbots in general (for whatever reason), but I think the issue is more that a person can write low-quality posts, use bidbots to upvote them for fairly good returns, and game the Steemit blockchain for short-term gain at everyone else's expense. It doesn't take much imagination to figure out how that can be done. But what should be done about it?
How to Save Steemit From the Bidbots
I don't think bidbots are evil any more than I think automobiles and hammers are evil. A hammer is a tool that can be used to build a house, but it can also be used to crack a skull. An automobile is great transportation, but Bonnie & Clyde used one as a getaway car after robbing banks. A tool can be used for good or for ill.
By the same token, bidbots can't do harm on their own. They require, like a hammer, a human agent to wield them in pursuit of useful or abusive activity.
If an individual wants to use bidbots to subsidize their earnings on Steemit, I see no problem with that. If they're churning out great content, people are upvoting it, and they decide to increase their already decent earnings with a bidbot investment, more power to them. But the flipside is Bonnie & Clyde. What should be done about bidbot abuse, and who's responsibility is it?
Many Steemians are working on ways to attract more people to the platform. I applaud all of their efforts. Some of the ideas are awesome, but if the problems that are driving Steemians to power down and leave the platform aren't dealt with, then attracting new people to the platform may not be the panacea we all hope it will be. We do not need more people with a short-term mentality. They'll either pick up the bidbot abuse habits of some or leave the platform like others. What we need are people with long-term aspirations and the vision to see Steemit as a platform for investing in their own future.
In Google's early days, search results were littered with spam and poor results because people learned to game the results by focusing on keyword-based word litter intead of quality content. That's why Google is constantly updating their ranking algorithms. They have not perfected the science of information retrieval, but I think they have improved it over time, and it took constant tweaking.
By contrast, MySpace was a social networking site that had some issues it couldn't overcome. Before it could address them, Facebook came along and knocked MySpace off the mountain. The same could happen to Steemit, but I hope it doesn't.
If Steemit is to survive, it will have to address its own weaknesses. All the blockchains have them. Ethereum has its scaling issues, Bitcoin has its energy-consuming proof-of-work consensus, and Steemit has its bidbot abuse.
I don't know what the solution is. I do know it must be addressed by the Steemit development team. The fix can't come from the users because the system itself encourages a short-term mentality. People inherently want the easy way out, so if they can spend $2 and get a quick $3 in return, why spend half an hour spreading their link just to earn $1? They can get that $1 in five minutes.
A Word to the Wise (From an Old Fool)
As I write this, STEEM is at $1.11 and the Steem Dollar is at $1.06. They may go lower before we're done. We just have to remember that every cryptocurrency is down right now. The market is down. It will go back up.
If you're a short-term thinker, or you showed up on Steemit hoping to make big dollars and you are now disappointed because that hasn't happened, you might be tempted to throw some beans at bidbots, grow some peanuts, and make your bank. Or you might be tempted to leave in frustration. Please don't.
Every investor knows you buy low and sell high. If you want to get into Steemit, or any cryptocurrency, now is the best time. I encourage you to invite your friends, commit yourselves to a full year, and faithfully publish great content on a regular basis during that year. When the price of Steemit hits $10 again and you have 2,000 Steem Power, what will you say then? And if that doesn't happen, what have you lost?
There is much more to gain from thinking of Steemit as an investment vehicle than as a place to make friends, share interests, and write your #ulog and #freewrite posts. It's all of that, of course, but it's so much more. If you want to do it right, treat it like your retirement nest egg. Every post you publish is another dollar you put into your nest egg. But to hatch that egg, you have to be a long-term thinker.
Review Me, Please
While you're here, check out the backside 5 (my five latest posts):
- Trade.io Review: Do We Really Need Another ICO Platform?
- Two Poems: Battlefield Confession & Life
- Farmpunk: Racioppa's Revenge
- Trade.io: Review of a New Crypto Exchange
- Square and Coinsquare Sitting on a Fence
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