Employed on the blockchain: Scam or the future?
Tonight, I am thinking Steemit so instead of writing some fiction, I decided to write some ah, what would you call this? I don't really know, Steem thoughts? Anyway, this is something I have thought about looking into for a awhile but I think it is such a rabbit hole I am going to employ the Steemit community instead which bring me to the case at hand; Employed through Steem.
Does that sound like dream or a potential reality, good or bad, scam or the future?
I am going to lay out two basic, hypothetical scenarios in this post to get us started so others can weigh in or spin off their own ideas on the topic. But essentially, it is about being employed through the reward pool.
1. Upvote me please?
Wages are a massive overhead for companies and can eat into profits significantly and is one of the drivers for automation. So, why pay them at all?
Let's say company XYZ powers up 1 million Steem (5 million worth). Using current values, their 100% vote would be around $400. They have 10 votes at around that value per day.
Let's say they have one employ and they upvote 1 post 100%
Employee 1:
vote = $400SBD = ~300 after curation = 150 in SBD is ~1050 USD + STEEM ~25 Steem (150 USD value). Therefore ~1200 USD a day. 200 days a year work = 240,000 USD salary.
What is your salary per day? Per year?
But, they have 10 of these votes per day and, they can pay 7 days a week 365 a year which means they can pay 365 x 1200 USD x 10 = 4,380,000 USD per year. (all things remaining equal) and, pay it in a likely appreciating currency. It also means that they can employ 18 people at that salary.
This means that their initial 5 million investment has been able to pay 4.4 M in salaries the first year. But, they are also earning curation on it of about 20% so by the second year, they will have 1.2 million STEEM POWER instead and a $460 dollar vote.
Does this sound correct? I do understand this is crypto and 'all things remaining equal' is not going to hold true but, it is actually likely to drive prices upwards, even though their Steem returns will change.
So, if I have this somewhat correct in theory so far, a Company can invest 5 million, pay 4.4 million in salaries and without even having a product yet, not only keep their seed capital, but increase it 20 odd percent in an appreciating currency.
Is this already happening?
2. Market manipulation?
Imagine if there was a trade analysis influencer on the platform with a lot of followers who when they posted their TA recommendations, there would be a near immediate jump in the price as thousands of followers bought the call. Knowing the call before hand would be highly beneficial right? The trader of course does know this and insider trading doesn't seem to cover cryptos yet.
So, what if a big investor paid to get the information early but instead of paying directly, they chose to vote from the pool instead of burn their own capital. After all, they have stake and can use it as they please right? This way they can make their buys low and at the jumps, sell for 5 or 10 percent gains consistently.
Does this seem above board?
Now, above are only two scenarios but there are many variations to this.
- Is this possible?
- How can this work in practice in the long term?
- How does it affect the pool for the now 'unemployed' who don't have a company contract voter?
- Is this legal?
- Is this the future of salaries?
- Can the system handle it?
There are hundreds of possible questions and so much uncertainty around how it would work in practice but, I do see this as potentially viable for a company to do. Even a small company, even with a low investment as essentially, it need not be the entire wage paid, it could be a percentage of it or, a perk of working for the company, a bonus. And, it completely changes tax liabilities for both the company and the employee.
Each day or week an employee could submit some arbitrary vote-worthy content on to the blockchain and the company can vote it up without even raising suspicion.
This sounds very scammy doesn't it? Is it reward pool rape?
- Are there ways to combat this if this has negative implications?
I really don't know if this is a good thing or a bad thing but it will definitely have an effect on the pool and on the demand for Steem if a few large players choose to do this. I do think that it happens to some extent here already with the way some of the Steem projects work but, I can't really say.
I haven't seen any other discussions about this but I am wondering how the community sees it and how they think it may affect the platform and them as an individual. This is an 'out of my comfort zone' post also so, go easy, it is just a discussion.
Taraz
[ A Steemit original ]
Ok, tomorrow, no Steem related content... probably. :)
Thousands, millions of people have done this for a decade or longer already. Completely with currency fluctuation as well.
It’s called working online (from home). Fluctuation of value of USD has hit many at different times, whether employed or freelancing.
The blockchain, more often than not, is merely a database and not something super special, the lightning rod it often is pretended or flouted to be.
Most freelancers have no contracts, or no legal recourse when contracts are ended. Many never have more than an email actually.
The upvote model described also already exists, in a different form: traffic/social shares bonuses. Which is pretty much the going standard for many an online content creator. Also benefitting from the publications social properties and the ability to request shares from colleagues.
The only winner in that model is the publisher/investor who rather than continuously invest in (social) advertising and marketing for worthy pieces can focus on getting a return. But then again the step-in costs are higher, SP isn't free. SP is rather expensive even.
Is this the future?
Maybe it isn’t but it will definitely become a reality for blockchains like the Steem blockchain.
I agree with you. I am working from home and I just trust my employers that they'll pay me after a weeks work. However, there is an agreed fix salary and the rate is solely dependent on the dollar conversion, however, crypto value varies from time to time as in drastically huge difference is noted. Just sharing my thoughts. :)
No. Because of the existence of flags it doesn't work. Some time someone will flag these "payment" posts, probably breaking the contract with the employer. There would need to be an agreement of what happens in such a situation, perhaps the employer would have to transfer liquid Steem to make up for the flag.
Any motivated agent could easily disrupt the business, such as a competitor, someone using misguided strategies, someone making a point or simply someone who like to see the world burn. We have notable accounts in all categories here, I don't need to tell you!
That is the main reason why I always always underline the fact that you cannot count on post payouts until they are paid out, they are pending before that. Everyone has a say in post rewards, literally everyone to some degree. I can't imagine a business would be happy to let the whole world in to the accounting office with full permission to contribute their say.
There is however a lot of gifting voting that seems to work by consensus, that is it does not attract many flags. Chief among these is of course @utopian-io
I think that if used sparingly, it would be possible to have as a bonus system for a company though. I am not pushing for this, just thinking about how some may game the system.
The next question is, what if someone makes their own interface with private access? As you know, the technical side for me is very limited in these areas but I wonder what happens in such a scenario. Sure, you could still see it on the blockchain but someone would have to be looking for it specifically, and with millions of users and transactions, if the payments are not overly large, will anyone see?
Right kind of like money laundering 😂
Well it would never really work completely. You could definitely obfuscate with random accounts but for anything of any significant value there are people looking for those transactions, both spam fighters and not so nice people. On Steem the conspicuous thing is the value of posts and transfers, you can't really hide that. It's one of the strengths. So as you say, if not overly large, they might go unnoticed.
However I'm sure that will feel so shady it wouldn't catch on.
All really interesting points and examples given and even though you admit to knowing very little about the workings of the system in their entirity, you certainly seem to have a decent grip on how things work and much, much more so than me but what really caught my attention was that you mentioned an investment of 5 million would generate rewards of 4.4 million over one year. If this is true and you instead replace the example of a business investing with that of an individual which is a much more accurate reflection of what is actually taking place then that means that an individual investing the same amount, all things being equal of course, would stand to generate the same rewards and would be able to decide whether to give them to others or keep them all for themselves. It sounds like a pretty good investment to me, all things being equal, which also allows for the 4.4 number to rise as well.
The possibilities in all areas for this emerging technology are overwhelming at times.
There definitely are some gray areas here. Like you said, market manipulation doesn't cover crypto currencies yet, and as the markets are still relatively small, it can be "easy" for a large player to make big changes just with their own buy/sell orders...even without intending to do so. I don't have any conclusions at this point, just observations. Still glad to be involved so far and curious to see where it takes us.
Lots of grey is why there is part of the reason there is so much potential already. This particular point is somewhat unique to the way Steem is mined isn't it? I have no answers either but I am hoping it will raise some new thoughts.
I have ALL these exact thoughts. When buckets of crypto are involved anything can happen! The gray area? We can start with the idea that we are competing with robots. These robots can build WHALES then destroy the very same WHALE the next week! Would you rather be the BIG lonely WHALE or the minnow, surrounded by millions of minnows? The blockchain is truly an open book a forensic file if you will. Taking advantage of others will be exposed at some point. Let’s all work together to build a solid STEEMIT platform and make it one we are proud to be part of! Thank You for your awesome post! I really appreciate all the hard work that you put into the information contained within the post.
There are so many question still for all of this which makes it pretty exciting to be a part of in my opinion. I have never been involved with something like this before so for me, it is like an experiential candy store. Thanks for dropping buy, it is appreciated as always.
This is my first time to be involved with something like this as well. I have been a day trader in the forex and stock markets most of my life. I am now trading the crypto market and it is very exciting. It was a pleasure to meet you! Take Care!
This is actually a great idea @tarazkp! I can also see this is feasible, the computation will also depende on the rate of Steem andSBD right?
I can see this is the future of Steemit. I know some are using the platform as their main source of income but if a company will actually do this alot of Steemians will be benefited especially minnows. It's like a home based job! :) I am willing to be employed. :)
Thank you very much @tarazkp! Will soon be looking for a job here. :)
Very interesting ideas.
Off the top of my head, I can think of a couple of issues that would make paying employees through Steemit problematic. First of all, the value of an upvote fluctuates because of the static reward pool, so it would be difficult to guarantee a particular salary. I suppose this might be mitigated by adding additional upvotes to make up for lost value if the payout decreased from expected.
Second, and a much bigger potential issue I would say, is the possibility of getting downvoted by an angry whale or a competitor wanting to mess around, which could wipe out an employees paycheck just like that.
But it would certainly would not surprise me if some opportunistic companies try it (or already have tried it).
I do believe this is a form of reward pool rape, and while I don't know if it is currently illegal, at some point when this type of system becomes more mainstream, laws will come into place to prevent such things. That brings up a whole other issue though. Laws are generally locationally specific. A country can make laws for its own citizens, but not for those of another country. With decentralization, no single country can enforce laws on the whole blockchain...
The next few years are going to be very interesting.
This kind of makes me wish I had 5 million laying around...lol. It does make some assumptions with the whole everything staying equal and probably the biggest is that if someone added another million steempower and used those upvotes daily the reward pool would be further diluted.
But the concept/question proposed is solid and does show how much money is being printed out of thin air.
Manipulation cannot be avoided and you're right it is happening in little ways already. I have not been long on steemit but I see the trends and it shows that price manipulation is a very possible possibility.
I hope something can be done to prevent it becoming a full on practice.
Living by the philosophy that tomorrow is not guaranteed, hopefully what is left behind, it will be of value to whoever stumbles across it. Whether it is a viable form of income or not, the fact that we are all a part of developing the use cases of blockchain technology as early adopters is rewarding enough. The end justifies the means, it is rather exciting that the end is fuzzy at this point in time :)