Are the whales turning Steemit into world's first cryptocommunist regime scaring away investors ?
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I am 2 weeks on steemit but I keep reading how people complain about the power of the whales. I used to be a complainer too. I had justified reasons for that. But then one of the whales made a video explaining why the system works like this and that whales should have more power because they are investing more in the platform and therefore they have to strategically steer the platform into a direction that will make Steemit a success. And he convinced me with that argument.
Now, I read the whitepaper and I liked what I read. I immediately understood Steemit's potential and I was interested in investing in Steemit. But before I invest in something I need to know more about it. So what better to do than actually use it actively and get to learn how things are done here ? After 2 weeks of usage I came to a new conclusion. People might find it stupid that I change my mind so often, but I think it is healthy to admit to yourself that you were wrong and change your mind about things. I will now explain what is my new conclusion and why. I am not saying I hold the truth and I am always willing to change my mind if good arguments come up. So if you think I am completely wrong, please tell me why in the comment section.
On a sidenote, many people are complaining about the whales because they are frustrated they don't earn money with their posts. But in my case, that's not the reason. I am complaining because I would love to invest money in this platform but I am scared to do so in its current form. Proof of my eagerness to invest is that I converted my earned Steems in Steem Power instead of getting it out of the platform as soon as possible.
Steemit is not a free market !
When I read the whitepaper I read Steemit was designed to be like a free market that would give people a sense of being treated correctly and honest. I just loved what I was reading. Which person would not love to read this ? Which person would not love to invest in something like this ? However, after 2 weeks of using the platform my conclusion is that Steemit is NOT a free market !!! Here is why.
Actually, the video of the whale explaining why it is good whales have such a great power proofs that Steemit is not a free market. He admitted it himself in his video when he said that whales are steering Steemit into what they want it to become. It is obvious that if a selected group of powerful people can steer the market like this, the market is NOT free. Does anyone know 1 savy investor that would be willing to invest in a controlled market ? Because I honestly don't know. If there is 1 thing that history has thaught us, it is that controlled market don't work. So why would I or anyone else invest in something that has been proven over again to fail ?
So whales are smarter/better than the free market ?
Admitting that you need the whales to steer Steemit into the right direction is basically the same as saying that the whales are smarter and better than all the rest and therefore the opinion of the rest doesn't matter that much. Really ? Well, lets think about this. You have a product that you are willing to sell ? The answer is obvious ... you want to sell it to the free market. So what you are basically telling here is that you know better than the free market itself, what it wants ? Do you honestly believe that ? I am quite sure you don't know better than the market itself what it wants. And it is scary for any investor that wants to invest in the platform to hear from the most powerful people in this platform that they really believe this. It doesn't matter how intelligent or rich you are ... you will NEVER know better what the market wants than the market itself.
There are 2 things I love: A cocktail and my upvoting bot.
Yesterday a subscriber interviewed a whale. The whale openly admitted that he wasn't reading posts and upvoting them. He has a special system for doing that. You want to know the system he is using ? ... Before I tell so, people, it might be a good idea to sit down on your chair and hang on, because what I am about to tell you is going to blow your mind away ... He is using a BOT !!! YES, A BOT !!! So one of the most powerful accounts on this platform is controlled by a bot !!! And to make things even worse, this bot has a list of known subscribers to upvote !!!
I really appreciate the honesty of this whale ... really ... but what shocks me is that he doesn't realize that this is irresponsible behaviour that could make Steemit a failure. He is just giving away free money to people without even honestly judging their posts. This could lead to a severe voilation of one of the principles explained in the whitepaper. The whitepaper clearly states that of people are getting the feeling that they are not being treated honest, they will leave Steemit and make the project fail.
How do you think people feel about knowing that a whale has a bot that upvotes a small list of posters ? And even if those posters are doing a great job ... imagine one day they have a day off and write a shitty post that gets upvoted to $30.000, while someone else making a top post gets $3. You think people will feel like they are being treated fair ? I don't think they will and if people don't feel like being treated fair, they will leave and anyone invested in the platform will have to suffer the consequences.
"We are very glad to have you here. Here ... $50.000"
People might have different interests and not everyone might understand why one person likes a certain subject. Some people were complaining that travel posts are more valued than technology posts. But I don't agree with that. It all depends on the free market. If there are a lot of people that love reading travel posts but dislike technology posts, then it is normal they are rewarded more. The free market is never wrong. But please, this exagerated rewarding of people's introduction posts makes no sense whatsoever and is clearly steered by the whales.
Sometimes I wonder if the whales are actually thinking long-term. In the short-term rewarding introduction posts is a very good strategy to make people enter Steemit. But they really think once you have people here, that they will just automatically stay here if there is no value to be found ?
If I look at it from an investor's point of view, what I think will happen is that in a short period of time, you will have a lot people introducing themselves to get some quick money and then they will leave as fast as they came. Why would anyone want to stay here ? People that post valuable content are not rewarded. Introduction posts are. You think subscribers will stay for reading introduction posts ?
Making money without adding any value due to the snowball effect.
There is clearly money made here without adding any value to the platform. People are making money with what I call, the snowball effect. What do I mean with that ? Well, if you just vote what you really like, you will earn nothing most of the time. It is more beneficial to scroll through the posts and if you see a post that already has been rewarded substantially, then you upvote it without reading.
The worst part is that if someone with a lot of steem power upvotes his own post, people will probably upvote him, even if his post is crappy. This is something that should be eliminated. The system can't work if it stays like this. The number of dollars someone is making with a post should be hidden. Also the number of people that voted on him. You can't deliver a successful platform in this way because this doesn't reward value. And if value doesn't get rewarded, the platform will fail.
Conclusion
I definitely don't want to look like an asshole here. I want the whales to think a second about the message they are spreading here to investors. I gave you a summary of how I look at the current way the platforms work. The similarities with cryptocommunism are obvious. There is a small group that controls everything which is giving me the feeling they are making tons of money at expense of the rest, trying to keep the rest "happy" by throwing pennies at them. And I think I am not the only possible investor worried about the current way of working.
If Steemit will ever thrive, I think it will not be in the current format because I really believe not many investors will poor money into it in its current form. I don't say I know the solution to all the problems I am seeing. And I understand Steemit is new and will probably change a lot when time passes. But at the current moment, these are my worries. And I think these worries are important. I still consider Steemit a beautiful project and as an early adopter I want Steemit to grow into something big. And I really hope the whales will behave responsibly and don't mess it up.
As my final message to the whales I would like to end with the famous scene of Spiderman. It is one of my favorite scenes and it comes with some great free advice.
ps: If you agree or disagree, don't forget to let me know in the reply section.
"The number of dollars someone is making with a post should be hidden. Also the number of people that voted on him."
Maybe only show these numbers after a few hours will be better?
Hmm, interesting idea. I have to think more about this suggestion and think about the pros and cons. But it could be an interesting alternative. In any case, better than it is now.
But even these numbers were hidden from the website, the bot still can see it from the blockchain.
True. But it is possible to store it encrypted in the blockchain. Than nobody will have access to it; only the owner.
I think it's the best Idea.
The biggest obstacle now is, steemit is becoming like, a work place it's not about what skills. It's more about who you have, and who you know.
Yesterday i've written a frontpage post making about 6k. But you know what?
I DONT CARE ABOUT THE MONEY IT MADE
What matters to me, is the number of votes i got, not the amount in $.
What matters to me, are the comments users left as feedback that warmed my heart and motivated me.
If you're here soley to see how many $ your article will get, you're in the wrong place.
I'll take 500 votes with 50$ over 5 votes with 500$ any day, any article.
Completely agree with you. But it doesn't harm to reward true value either.
Good to see some dutch people around
Inderdaad ;-)
I think it would be better to delegate voting power to willing curators that take their job seriously, rather than use bots. But then again, the whales play based on the incentives that the platform is giving them. So they just adapt to the environment.
I agree with you. If whales can't cope with the massive posts, they should start hiring professional curators for it.
Asshole.
( ͡° ͜ʖ ͡°)/
Thanks, man :-p
So the logic is everybody, whales included, votes in their best interest. Therefore, if you are holding a lot of Steem Power it is in your best interest to upvote quality content that you think will help the ecosystem obtain success and thus increase the value of your investment.
But what if you are a whale and you are of the opinion that steem/steemit is not likely to be a long term success? What is in your best interest then? Your investment is locked up in SP and you think it likely will lose most of its value regardless of your actions. If I were this hypothetical whale I would try to game the system to try to earn as many Steem Dollars as possible so that I could convert to steem and cash out.
This could be a possible reasons for whales doing things such as using bots to upvote content that may not do much to help steemit.
It is not comunnism related, it is capitalism related where rich every time get more and poors every time get less, exactly like in USA or Europe
the problem is this:
the whales decides what is good, not the community
I agree with You and I share Your concerns! But in my opinion Steemit is not like a communist system but more like a feudal system with the whales being the nobles and the normal users being the peasants. I wrote an article about Steemit being a feudal system, I'm not linking it here but You can find it if You want.
If the masses realize the flaws of the steemit and leave the whole system might collapse...
Some really good points. You've done some good posts.
Thanks for the nice feedback.
Steemit is a completely capitalist enterprise. I know people think of crypto as democratic, decentralised, but Steemit is not it. It's a completely open free market - as far from communism as you can get.
Steemit can afford to reward bloggers for one very simple reason - because of a massive injection of long term funding from the whales. It's simple, that's how it works.
If Steemit were to be democratic, no one would be paid, or paid very, very little. It's just in the nature of the beast.
I do think Steemit can have more limits and balance though, but it's always going to have influential whales - the top 1%.
Actually I don't think they invested in anything apart from some cheap mining equipment, and then mined in the early instamine period before steemit was opened - all the "wealth" was accrued in about a month. Since then, users speculating and buying steem is what has created the price, and hence the value of the project.
Initially, yes. The money has to come from somewhere. But once it is famous money can get into it fast. Look at Facebook. It is a viable business model. But whales have a very big responsibility in making it work or not.
That's certainly true of the founders and the initial miners. But I meant on the long run - the goal is to attract people to invest in Steem Power.
they have to make it work for us who believe.
I think this is true in the short-term. In the long-term I think Steemit can still keep this scheme working. Look at facebook. It is a company making tons of money. It is one of the biggest company in the world. But it keeps all its gains for itself. Imagine what would happen if part of this money is distributed over its users ? ... That's what Steemit can become.
I really, really hope so. That Steemit redistributes some of the wealth.
If not, the problem with inequality is it can have a runaway effect. If uncontrolled, we could lead to a situation where 1 whale holds more influence than a million other minnows. I discussed this a bit here: https://steemit.com/steemit/@liberosist/steemit-s-achilles-heel-rampant-inequality