Adjust Your Expectations: Steemit Is Designed as a Lottery
If you expect to be paid "fairly" for creating "valuable" content, your expectations do not match reality. I've touched on this aspect of human nature before, but in the context of Pokémon Go. It applies to Steemit as well. I left a comment last night which got me thinking about it again.
Let's start with this direct quote from the Steemit white paper:
The economic effect of this is similar to a lottery where people over-estimate their probability of getting votes and thus do more work than the expected value of their reward and thereby maximize the total amount of work performed in service of the community. The fact that everyone “wins something” plays on the same psychology that casinos use to keep people gambling. In other words, small rewards help reinforce the idea that it is possible to earn bigger rewards.
It's important to keep this in mind. This is how the creators of the platform view it and have designed the economic incentives it operates with. Though some like @screenname are trying to raise awareness about vote count verses post value, ultimately it doesn't matter. We still end up with this reality:
143 votes don't matter as much as 48 votes backed by more influential accounts. Since I first started posting in July, I've slowly, over time, come to realize this truth. It has helped me set my expectations accordingly. Properly setting expectations is key to living a joy-filled life (speaking of, my post Expectations Breed Frustration, Expectancy Brings Joy earned over $128).
This point has been hammered home for me each week as I post the Exchange Transfer Report. It's essentially the same content structure, updated each week. Some weeks have made over $300:
Others, less than $2:
And yes, I recognize how the $ amount matters less than the VEST count.
It takes about 30 minutes to create each report. Should I expect to be consistently paid for my efforts? Does this fluctuation in payout frustrate me? Should I be concerned about Steemit not being "fair"?
Nope.
Why? Because I've read the white paper multiple times. I didn't quit my day job with some grandiose dreams of making enough money here to support myself (or my family). I recognize it for what it is: a lottery game. That's why each vote is exciting! Each payout a gift.
Steemit is not a meritocracy and content value is not ever going to be "fair." Value is subjective. Not only that, the online timing and mood of the voters (especially the whales) matters more than anything else in terms of payouts. It's not a meritocracy. It's chaotic, like a turn at the roulette wheel. Expecting consistent results is somewhat silly.
But here's the interesting part:
You can make a difference here in terms of which content is valued.
The only catch: you need to invest some serious money. The people who determine value distribution here are those who have a lot of Steem Power. They either invested real money, real time, or got in early. Without their investment, the practical value of the tokens generated by STEEM and rewarded to authors would be exactly zero.
Think about that.
Zero.
Value really is subjective. Yes, good content on its own has value, but only when monetized. There are no ads here, no monetization taking place. All the real, exchangeable "value" derived here is happening because of the speculators and investors. Content creators can whine and complain all they want, but ultimately the value here is determined by those who control the value of the ecosystem. If you don't like that, you have a few choices:
Keep your expectations out of whack and live in frustration as you continue working on great content which you see as going unrewarded.
Leave and continue posting on other sites which also don't pay you directly for valuable content.
Invest in Steem Power and become a whale so you can more greatly influence value distribution here.
Continue creating content and forget about the payouts. Maybe even hide the $ symbol. Ironically, that post earned over $880.
Seems to me, option 4 makes the most sense (though I did a little bit of investing in Steem Power early on as well).
Sound good? Am I missing anything? Which option are you choosing?
This post has been ranked within the top 25 most undervalued posts in the second half of Dec 11. We estimate that this post is undervalued by $19.13 as compared to a scenario in which every voter had an equal say.
See the full rankings and details in The Daily Tribune: Dec 11 - Part II. You can also read about some of our methodology, data analysis and technical details in our initial post.
If you are the author and would prefer not to receive these comments, simply reply "Stop" to this comment.
Oh, the irony...
lol yes. but i think that bot is actually an encouraging sign to people
I haven't turned it off yet for my account. I do find it encouraging as well. Many of my posts get this helpful little comment.
This is a great post, but - I don't like writing that, yes, but, but - value is not only to be found in money, or any other charged number. And with that said, the contribution anyone one, whale or not, can make to this platform is to create dialogue. My own most successful post, back in August think, was a poem called Homer in Merionethshire. Top of the voter list was @berniesanders, and I spent weeks wondering what exactly about the poem he liked. Sigh. As you say, I'd won a welcome reward in the lottery.
I'm still captivated by the numbers, building the rep, but I'm not altogether sure that that is helping me to create. It might even be why I am not motivated to post so frequently. I'm searching for a better reason for commitment.
Sounds like you're starting to touch on motivational psychology. From what I've seen, regarding creative work, rewards tend to decrease motivation to continue creating. The different between intrinsic verses extrinsic motivation is really important, just as you describe. If you're willing to think about what someone else likes about your work for a week, that sounds like an extrinsic motivation to me. If on the other hand you value your work intrinsically, regardless of the external rewards, you motivations probably won't change much.
And yes, I get there is value outside of the $ (see my post on that). Numbers are just a way to keep score and communicate and think about value via language. That said, when it comes to steemit, that's pretty much it's distinguishing characteristic. Without the rewards (the money), why not just use Facebook, Medium, Reddit, etc? Yes, we've got that whole decentralized, no-censorship thing going on, but lately it seems people (on the whole) don't really care about privacy or censorship as much as maybe they should.
Thanks for commenting.
Privacy, censorship, and being monetized are factors that only matter when there are options. Steemit is but one option, and the plutocratic governance of it's economy is perhaps perceived as just as significant as the other factors.
Fairness is a feature that people, and even other animals, are highly sensitive to. As continuous new platforms are introduced to the market, the feature sets, environmental limitations, and economic pressures that impact adoption are targeting market segments of significance as available.
As platform features are largely dependent on the governmental imposition of each of these factors, it may take some time for platforms and environments to evolve until current platforms of choice are abandoned for preferable competitors.
Steemit's growth is an example of this happening.
What are some others?
The ones mentioned, that people are fleeing to Steemit from, and competition being developed, or that will be developed in the future.
It is those aspects of social media earlier mentioned that people dislike and Steemit doesn't exhibit that has driven people to Steemit. In the same way people will vote with their feet down the road, in a more competitive market, in which I want Steemit to lead.
Other platforms can be monetized, but economic rewards aren't built directly into the platform. Seems to me, currently, Steemit is the only game in town.
Yes. I agree, on that count.
Can you expect it to remain so? I don't.
I think this is the most fun game online and that's exactly how I've been approaching it, as a game. The whitepaper quote you mentioned in your post made it very clear to me from the start when I read it. Value is subjective here.
It's a fun platform and the interaction between members has been as rewarding as the payouts, the content a joy to red if you can ignore the complaining. Are we having fun yet? I sure am. Steem on!
Well said! :)
Agreed and Re-Steemed.
Something I'd like to add is that people need to let go of this idea that a longer post is more deserving of anything than a shorter post - just because the author worked harder on the long post than the author of the short post worked in his.
If I press down A for five hours and submit a post which consists of a few miles of "AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA" am I objectively deserving of rewards in some weird world where value is objective?
After all, I worked on the post for FIVE HOURS.
But, but, but... Muh labor theory of value!
Heheh. I agree. It's difficult for people to accept the subjective nature of value. To me, value is only defined in the moment of exchange. Prior to that, and even after it, it has no real value. Even then, it's still just opinions being expressed in concrete form.
I will keep posting. It is still the best place that I have ever seen in social media world so far. Also, we have to believe that one day all the problems, which we already adressed to steemit will be solved. Why? Because it is for better interest of everyone.
As for now, I still want to create quality content. Not because it will be paid more, but because I want people to think that I am a smart person lol.
Also, we have to know that every single job that gives you money is a hustle and a hard work. EVERY SINGLE one of them. Steemit will not be an easy money, but it have a potential to be good money with some efforts (would it be making friends with whales or posting quality content).
Great comment. So glad to see thoughtful comments like this and then confirm I'm already following the author. :)
And yes, I think we all want people to think we're smart. There's a lot of value there and to being heard.
Thanks. Let's just keep this platform rolling and see where it leads! :)
After you mess with crypto long enough the concept of money alters greatly from my experience.
That's very true. If you scroll back far enough in my posts, you'll see I did a bitcoin pizza challenge a long time ago to to try and help more people understand this.
Wow, then are you the one of the pizza challenge?
That post has been seen for a very long time somewhere about 2 years ago or more.
Well, steemit just needs some more big fish, rather than only very few whales. Now you need luck to have one of the big whales recognizing your work. But once you get recognized and your stuff is high quality they will find you mor often. Once there will be more fig fish, quality will be recognized earlier and earn in average what it deserves. But - there is no system in this world without corruption, even in democratic systems. This way it will never be 100% fair but quality will win. I appreciate people like you who care about quality. Thanks for this post.
Thank you!
Maybe the long term solution is to have more people investing real money into the system, buying Steem Power, and making the founders rich beyond their wildest dreams.
Or maybe the price will tank hard and anyone who invests in it will loose their shirts big time.
I find Steemit a very nice blogging platform, and if it didn't pay at all, I might still have chosen it over blogspot or wordpress. The ease of commenting, and the community that steemit has is in alignment with my end goals.
I love the idea of getting paid. And I am working on getting enough steem to purchase a graphics tablet. (Probably be easier if I wrote more and drew less.)
However, I find the payouts to be really annoying. What the white paper stated was nice and desirable, what they have created is not that.
They have an algorithm that makes a hockey stick chart of who gets paid what. Unfortunately, they also made a hockey stick chart out of the vests. Then multiplied the two, making a very steep hockey stick.
Add in the 0.001 minimum, and you have a hockey stick with a sharp drop off.
Case in point. At 10 SP I would have to be very lucky in timing and finding a post to get that treasured 0.001 curation payout. But, when I got to 100 SP I can easily get between 0.001-0.008 curation payout just by voting on all the stuff that I like. So, in a very real sense, there is a minimum amount required to play the game. And this is not good for new people retainment.
I'd say there's a minimum amount required to play the curation game for sure. Expecting curation rewards without putting in your own investment of funds doesn't make sense to me. I only quote one part of the white paper, but other parts address what you mentioned as well. Have you read it? The income inequality concerns were known from the beginning. They talked openly about selling and distributing STEEM over time to deal with it. I'm not sure if it will work, and I've written my own posts questioning the underlying economics of the system. As we saw with last week's hard fork, they are making changes because enough people considered things broken. It's a beta experiment, and I'm curious to see where it will go in the future.
As to it being chosen over blogspot or wordpress... that's really cool to hear! Mostly I hear people complain about how terrible the interface is.
Either way, good luck with the lottery! :)
I have been a programmer, so I could have used this site even if it meant pushing the content to the steem-chain myself. I am pretty sure I know what is happening on the backend, and so am comfortable with the tools as they are. (Wish they were better. Wish someone would turn me onto who to talk to about pushing changes and testing.)
I understand the desire to reward those who put the effort into the platform. And that is a good; I want to keep that aspect. However, as a newb, I got about 0.001 curation reward per week, and that is because I read up on what to do, and found out who to vote for and when. An unskilled new user may think that the system is broken, that they are not doing something right, or luck is against them, or that they are just not wanted here. If the system doesn't throw them a bone once in a while, they are just gonna fade away. (if they don't post an "I've had it, I quit" post)
I believe this may be fixed by sorting payouts by newbs first. Make the cutoff much lower, say 0.0001, and all the newbs that are above that get 0.001. Then sort the rest and payout the remaining as usual.
Also, I have had many replies that have said $0.01 right up until the payout, and then gotten nothing. It may be that just sorting the payouts from the bottom up may make all the difference.
And yes, I read the white paper, and a lot of github, and...
It's a steep learning curve for sure. I've devoloped sotfware long enough to know programmers shouldn't be trusted to have good opinions about UI. We don't really care about UI. :)
A penny here or there for curation probably won't make or break if someone sticks around. Curation is for whales.
Agree
Blogspot and Wordpress can pay an author a residual income ... possibly forever. This is one wildcard that's not been discussed. if Steemit puts something like Adsense in place and splits the revenue with those that created the content, this could be crazy worth it.
Have you had much success with it? My understanding is unless you have an active blog with a lot of subscribers, there's not much money in ad revs for individual blog sites. Product placement and affiliate links can help, but still, it's going to be depend on your readership size and how engaged your mailing list is (and how willing they are to buy whatever it is you're selling).
5 years ago I had a hobby blog with Adsense and Amazon monetization. I sold the blog when I took a new job because I didn't have time to keep posting 2 to 3 products a day. Amazon made much more thank Adsense, but it all depends on traffic. Steemit should be able to manage that ok. They could test the waters with Adsense, but that means playing by Google's rules to some extent. They could do their own in-house ad network too, ala FB. If you're someone who already has 100's of posts that can attract evergreen traffic, then this could rekindle your old content if implemented.
I caught a little bit of Ned's discussion on TeamSpeak last night, and I think their primary focus right now is getting more active users. If that happens it opens up all kinds of interesting possibilities.
The interface IS very poor...others much better. Just one thing that's broken here IMHO. Lottery for sure! Good discussion guys
At the casino or the lottery, I know it's a game of chance. On Steemit, it's not completely random. Some people with power make choices and direct trending. I think that's what many people are asking about. Is the choice of votes logical, rational or simply gambling?
Why do some people, some tags voted by the same people are still in the trending? Is there some collusion?
Can such behavior bring confidence to investors and new users?
Since 4 months, the number of posts has not increased significantly despite an increase in new users ... and yet Steemit can be an extraordinary product!
Excellent point. It's our perceptions which cause the most frustration and people are seeing some correlation between what they view as quality and payouts. When that correlation breaks, cognitive dissonance abounds.
One must expect variation in their payouts. I have an only retail business where I have essentially the same inventory in stock every day. Some days I earn over $1,000, and other days I earn just $2. Likewise, with Steemit, even though my quality of posts are similar day-to-day, there are extreme variations in payouts.
Curation guilds have helped to reduce the degree of variation, but it is still significant.
Oh, that's a great point. Markets are chaotic in nature, and we never know who will show up to our business and make it a nice day.
Curation guilds bring their own problems though. Some complain about the same authors getting the same rewards over and over again, while other posts get ignored. It helps and hurts, I think. I've used them myself here and there, but not much. My vote is around $0.02 right now, so I don't feel much responsibility either way. If it were more, that would be more challenging to deal with.