Here's How To Attract New Users

When I first started posting on steemit, I had no idea that much of the information about the system and the economics were posted publicly. In case you were as ignorant as I was, go check out steemd.com. It's full of very interesting raw and useful data about the Steem ecosystem, particularly about the economics.

Let's talk about it.

Currently, Steem is only sitting at 38,426 accounts. There is a lot of room for growth, and it's not something that's going to happen overnight.

Unless...

A lot of us "Minnows" and "Dolphins" on the platform that may have little influence inside of the platform...but a lot of influence outside of it.

But...other than getting more people on the website to help support and build the ecosystem, there is no "selfish incentive" for us to personally refer new users.

Virtually every other action on Steem offers an incentive. Upvoting. Curating. Commenting. Holding SteemDollars. Trading the price differential between the internal and external markets.

Why not Referrals?

Look, I'm not the first one to mention this idea. A lot of people have brought it up before I have. But I'm going to keep bringing it up until it happens because there is a lot of lost opportunity out there.

(And because I could personally economically benefit by referring 1,000's of potential new users.)

Not only would it give "influencers" an economic incentive to use and promote the Steem ecosystem, it could even make individual advertising of Steem economically viable.

Why NOT offer Referral Rewards?

The primary downside of offering Steem, Steem$, or SP for Referrals as a reward option is that this could open a dangerous can of worms if users decide to spam.

But it's all about the economics - if there is not enough money to be made in spamming Steem, then spammers will promote something else that make them money.

In my mind, for referral rewards to be a no-brainer feature, there are just a couple of questions that need to be clarified:

1.) Which users should be able to refer people?

2.) How high does a referree's Steem Power need to become before the referrer earns a reward for the referral they made? (How's that for a mouthful?)

I think anyone should be able to refer people, even if they have a brand new account. Imagine a friend of a celebrity or influencer who sees that Steem is catching on as a platform - and thinks that his/her celebrity friend would get a huge boost out of using it.

Why not encourage that interaction to happen by rewarding it? The friend signs up for an account, and gives the referral signup link to her celebrity friend. Both start earning rewards from Steem once her friend starts contributing.

How To Fight The Spammers

I do think that a referree's Steem Power needs to rise to at least 10x the amount given away for free before referral rewards kick in - but preferably 20x or even 25x to be extra cautious, especially at first.

So, for example, 3 Steem Power (SP) is currently given away for free to those who open new accounts. Before earning referral rewards for a referrer, the referree would need to earn at least 30 SP, but possibly even as high as 60-75 SP before a referral reward kicks in.

That way, you don't reward for the quantity of users referred, but the quality.

How To Pay For It

The same way everything else is being paid for - set aside a portion of the block rewards to award SP or Steem Dollars to referrers based on the earnings of the referree.

Liquidity rewards for the blockchain SD/Steem have been removed, so replacing them with a referral reward would be a HUGE step forward for the network and incentivize many people (like myself) to immediately get moving on this.

My advice - don't overcomplicate it and do it 6 levels deep or anything like that. Just keep referral rewards at one level, and make the referral reward modest.

Just 1-2% of a referred whale's earnings in the form of SD or SP will go a long way and could literally make some people (ahem, me) rich...

...but more importantly, it will seriously benefit and promote the entire network to a wider audience, bringing it to the mainstream and making it far more valuable as a whole.

Let's make the pie bigger for everyone!