Social media platforms like Steemit make Facebook look old-fashioned – but is Steemit a ponzi?

Fake Accounts.
That is the first problem. Both Facebook and Steemit are infected with this disease, which multiplies and spreads like a plague, rotting the very core of a once healthy system. Bots. That’s another blight. Scammers and spammers, gamers of the system.

Maybe it’s just the crippled crone called capitalism
Of course, behind the scenes it’s actually just humans like you and I exploiting the facility to make a buck. “It’s just business.” “It’s capitalism.” What’s the problem? Did I wake up on the cynical side of the bed this morning? Maybe. Or is this investigative journalism by a naïve idealist in a dog-eat-dog world?

The facts and the stats
According to one reference, links below, Facebook has about 2.07 billion monthly users. And 10% of that is made up of duplicate accounts, up from a previous estimate of 6%. It’s spreading. And 3% of accounts are fake. So that means 207 million accounts are duplicate and 60 million are fake. That’s the size of an entire country bigger than mine that are fake. Can we call it “Fakebook”? Perhaps not since it’s only 3% of the total.

Fakebook
Well according to another reference Facebook disabled around 1.3 billion fake accounts over the six months between Q4 of 2017 and Q1 of 2018, many of them are bots discovered within minutes of creation, thanks to a detection system. But many of them are also humans faking the system again to exploit it for their gain, so who can find fault with that? It’s just human nature. And nature is perfect. Or so I wish to think. And that is out of a total of 2.2 billion monthly active Facebook users and 1.49 billion daily users. If we look at it this way then it appears as if a third of the planet uses Facebook and half of all Facebook accounts created are fake. These are profiles that want to spread spam or conduct a scam. Such is human nature. But I’m not a cynic, just a realist.

Increasing fakes as Facebook needs a Facelift
According to more recent reports, fake accounts are on the increase, up to 4% now. And not all of them are being detected, implying there are more out there that continue as unknown humans or outright bots. Anyway, Facebook is becoming old-fashioned among the younger generations. Its popularity is waning as newer social media platforms come about. The latest social group called Generation Z now use Snapchat and Instagram more than Facebook. Apparently they even call it “Mombook”, implying that it’s losing its “cool” factor. That’s where platforms like Steemit come in.

Steemit as the new Facebook
Steemit is a social media platform built on the blockchain which is the new level of technology on the scene. It is the next thing since the internet. It allows for permanent publishing that cannot be removed or censored or even altered by those who wish to rewrite history in their own image. Also one gets rewarded by other users for posting good content in actual money, not just likes. The blockchain facilitates payment in digital currency or cryptocurrency – steem coin – which can be converted into fiat currency eventually. So it has much greater apparent benefits and is a potential income for freelance writers with a more valid content output, as opposed to selfies and puppies. However, it seems that Steemit is falling victim to the same invasion as Facebook – human greed and exploitation.

Steemit is fake too?
The system created by Dan Larimer called Steemit, is designed as a social media platform where you can open an account or create a profile page for your blog posts, and in doing that you are allocated a small amount of credits to begin with. This allows you to begin posting and commenting. Without it you can’t simply post unlimitedly. You need to earn more steem credits or just buy some more in order to be able to post further. So by merit or good content, theoretically, you will earn likes which are monetised and thus attract income to post further and even cash out some profit. Sounds great. But the fundamental flaw is that humans are going to scam the system.

Is human nature and the “Creator” to blame?
The human element is always out to benefit more for doing less. As a result some are simply creating multiple accounts for themselves in order to get the initial free credits, and also to be able to add likes to their own posts from the multiple accounts. Thus they gain credits from liking their own posts via their multiple accounts. It’s basically just a fake account festival, probably even more virulent than Facebook because there is money to be had doing it. You can’t really blame the humans because that is what they do, it’s obvious. We use our intelligence to game the system and enable our profit. The problem may lie in the flawed system created by Dan Larimer in the first place.

Multiple personality disorder
For example one user, pun intended, was able to register 21 000 accounts for himself under different names. Now that is bad. I would say sick, but the youth of today have twisted the meaning of the word so it has been robbed of its usefulness in the English lexicon. I guess we can agree that it’s a scam, like all the fake profiles or bots on Facebook. This was pointed out by Steemit blogger @themarkymark over ten months ago already. To make matters worse, some genuine seekers are unable to get even one new account registered, waiting for weeks to be approved with no response at all. So they give up and go elsewhere. This defeats the very purpose of the platform, which is to on-board the world to a decentralised blockchain product. It defeats even the bottom line of the company itself, so the system is definitely flawed from day one.

Steemit could be “Scamit”
As a result the numbers of real users on the Steemit platform is way below what is being reported or is evident on the surface. All of this means that it is simply not qualified or competent enough to become a mainstream social media platform. I find this sad, as a regular user of Steemit and amateur journalist and writer. Here was a platform with the greatest of potential for others like me, and yet it is still so broken. The industry is, in other words, ripe for a proper working social media platform in the same vein as Steemit, but just more intelligently engineered, which can learn from the mistakes of Steemit and become really successful. Steemit is not that platform. I, as an active user, am not even keen to promote it to my friends due to the failure of the model to meet my standards of approval.

Will the real human please step forward
At this rate apparently maybe only 30% of users are real people with a single profile page. The rest are all fake accounts, doubles and spam. And then there’s the bots, which I won’t even go into. The platform is so toxic that it will never succeed. That’s my current opinion, and the opinion of other more experienced users, like @themarkymark. And of all the legit profiles, many are now abandoned and unused by holders that simply left when the price of Steem credits dropped or when they grew disillusioned by the scammy, bot-filled poor quality platform. Worse than that, many accounts are “name squats”. See if you can work out what that means. All this info is in the links below to other Steemit posts and more.

Decentralised in name only
And it gets worse. It turns out that Steemit is not decentralised, at least not in the financial department. The Steemit platform with its Steem coin is rigged to ensure that the developers control the vast majority of the coins. For example the top 247 accounts own 87% of the total stake or supply of coins. And those accounts are probably owned by the developers and their crew of insiders. Actually this is excluding the main Steemit account (or three) belonging to the original developers. And these stats are a bit dated already too. Basically the developers own 80% of all Steem coin in the system, which now seems to have been designed by the developers to enrich themselves more than anything else.

Dan the ponzi man
I have been using the Steemit paltform for less than six months and I have found out that the originator, Dan Larimer, also the founder of another centralised scam EOS, has created Steemit as a ponzi scheme or pyramid scheme, where the original investors earn the vast majority and the ones at the bottom lose heavily when the pyramid collapses. Back in 2016 the top three accounts were pulling out $2 million a week for themselves, while all the time suggesting everyone invest or “power up” – buy in, as they “powered down” – cashed out. From their point of view it’s a genius scheme, though other smart users obviously haven’t seen it quite that way.

The way the system is designed is that the more Steem coin you have the greater the value of your vote, or the more money a post gets if you upvote it. As a result, the developers at the top with the vast majority of the coins are able to decide – via their upvotes or likes – which posts get promoted or paid more. They probably invented the original Steemit “sockpuppet” or multiple scam fake accounts to begin with. People are seeing them as the original crypto mafia cartel. I even found one comment from 2016 where it’s mentioned that in three years (in other words this year 2019) Steem coin will be destroyed or burned at a rate of 10 to 1. Any ideas on that?

Setting the Tone
In his twitter account of 2016 Tone Vays, a somewhat reputable Bitcoin OG, studied the Steemit white paper and called it out as a total ponzi scheme or scam:
https://twitter.com/ToneVays/status/759484935921082368?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E759484935921082368&ref_url=https%3A%2F%2Fdecentralize.today%2Fmedia%2F40bf7915e3efacf4f766d6d88ad1e307%3FpostId%3D1a525f5e156
He read every page of the document and found flaws on all of those pages, if you want to have a look at each tweet on each page in Tone’s twitter feed.

Decentralised only when we want it to be
So it seems the developers Dan Larimer and his crew, are using the excuse of the fact that Steemit is decentralised, to allow the corruption now going on to remain uncontrolled (they are not willing to regulate what is decentralised and open to everyone) yet at the same time they have engineered a system where they are centralised controllers of 80% of the wealth. Some have pointed out that this is the flaw in the “game theory” model being used for Steemit. There are solutions but not in the current framework being used. The original problem lies at the start of the entire idea. By playing the “hands off” decentralised card, Dan and co have created a “power vacuum paradigm” and as a result those who are the most ruthless are simply going to exploit the situation and win the battle to fill the void in the power vacuum.

Conclusion
These are just the findings of a novice amateur regarding Steemit based on the writing of others, all in the links below, if you want to find out where I get these ideas. Feel free to leave a comment and opinion, based on your personal experience and insight, if you are a human and even read this kind of post. Very few do. I may be wrong in my conclusions, and am keen to hear a better interpretation of what seems to be a stinc-ing pile of steem-ing human experience at this stage. At best it can decompose and become healthy food for a better improved model and product.

Also, if you know of any other social media platforms that improve on the Facebook or Steemit model, where posts are monetized, then let us know in the comments below.

References
https://bitcointalk.org/index.php?topic=1558366.0 Steem pyramid scheme revealed
https://decentralize.today/the-ugly-truth-behind-steemit-1a525f5e156
https://steemit.com/steemit/@mughat/1000-fake-accounts-squatted-by-one-person
https://www.tweaktown.com/news/63113/facebook-deleted-1-3-billion-fake-accounts/index.html
https://www.businessinsider.com/facebook-raises-duplicate-fake-account-estimates-q3-earnings-2017-11?IR=T
https://www.recode.net/2018/5/15/17349790/facebook-mark-zuckerberg-fake-accounts-content-policy-update
https://steemit.com/steemit/@themarkymark/steemit-creates-accounts-for-scammers-and-nobody-else