Why Steemit, Inc. NEEDS to Increase the Community Creation Fee
@pennsif’s tribe.talk episode yesterday featured @elipowell, @roadscape and @jongolson. They talked about the launch of communities and how they will work in the beginning.
One of the other topics brought up is the cost of creating a community. Creating a community is basically the same process as creating a new account with a few other minor formatting details. The cost of doing so is 3 STEEM, which is ultimately burned.
The price of 3 STEEM is currently about $0.40 USD.
Does $0.40 seem like a fair price to launch an entire community on the Steemit interface?
In the real world, $0.40 is about the amount of money I pay to the parking meter to have my car sit in front of Starbucks for 2 hours. It’s about 1/4th the cost for me to then go into Starbucks and buy a cup of coffee.
Does it seem reasonable that creating a community — which can be likened to essentially launching a business — costs 1/4 the amount that it would for me to buy a cup of coffee?
That makes absolutely no sense. The fallouts of having such a low barrier to entry are some the are known and many that are unknown:
- Name squatting — if creating a community is so cheap, why not squat the name of hundreds… thousands of online businesses?
- Community Creation Spam — if I were to venture I guess, I would say that within 48 hours of the launch of communities, there will be well over 1,000 communities created by less than 100 people
- Waste of an Opportunity
- … unknown impacts of a low barrier to entry
This third point is the most important one in my mind. We have all been taking about how STEEM’s inflation rate is too high. How there is such a small amount of burning happening on this blockchain. We also now have the @steem.dao.
We have two different opportunities here —> we can burn more STEEM or we can send more STEEM to the DAO. Why would we not capitalize on that opportunity as a blockchain?
Ultimately, this is Steemit’s product and it’s on their website. Communities are not a fundamental blockchain development and with tribes, communities are actually an inferior product.
Regardless, competition is good. Options are great. We’re finally seeing some progress out of Steemit, Inc. toward the vision that was laid out over two years ago.
How Much Should We Charge for Community Creation?
If I want to launch a business in the U.S., it can range from hundreds to tens of thousands of dollars, depending on the structure of the business you launch.
Forming an LLC costs $500 and a $250 annual fee. The fee for a corporation varies, but is usually $125 to start and $100 annually. Illinois offers a wide variety of business structures.
This is actually an annual fee. Forming an LLC doesn’t actually do much for you. It’s simply a starting point and then it’s up to you to build the rest of your infrastructure and business. Essentially, it’s a “tax” for the simple ability to start.
Starting a community on Steemit is very similar. You’re launching a business or maybe you’re already an existing community elsewhere on the internet and you want to come to Steem to build a web 3.0-enabled community on the blockchain with proof of brain tokenization.
I said this in chat during the conversation —> if you’re starting a community, $100 should be pocket change to you. People who can’t afford to pay $100 to start, probably shouldn’t have a community anyways.
With that said, I think $100 worth of STEEM should be burned or sent to the @steem.dao or maybe even a combination of the two in some sort of pay split. This would have the effect of burning STEEM and combatting inflation and/or funding further development of the blockchain.
Some people think that $100 is too much to start a community.. I think that’s utterly ridiculous. Even @roadscape said on the show that we should focus on the cream of the crop — the communities that actually have some sort of promise.
Why not create a barrier to entry that automatically filters out 90% of the shit-communities that people would create if the cost was 1/4th what it costs to buy a cup of coffee?
The entire Steem blockchain is a decentralized cooperation of people. If you want to use our facilities, then there should be some cost to doing so. Similar to how a government might charge tolls to use highways or how I have to pay a parking meter to park in my town when I want to shop at a store or sit at Starbucks.
This is a source of funding for my local government. It’s how they keep the roads clean, the streets safe and fund the development of local schools.
Why shouldn’t we think of Steem in the same way? As a government body that needs to source funding for further development? Why charge $0.40 for something when you can charge $100 and actually make it a better environment because there will be less spam and name squatting?
Just to tie a nice bow on this, I think Steemit, Inc. should charge $100 worth of STEEM for community creation and send 50% to @null and the other 50% to the @steem.dao to support the price of STEEM and further the development of this blockchain.
As the STEEM price goes lower, it costs more STEEM to create a community, because the supply is less scarce.
As the STEEM price goes higher, it costs less STEEM to create a community, because the supply is more scarce.
Seems like rather basic economics to me. Two of the most important focus points on this blockchain should be funding further DAO developments and reducing the overall supply of STEEM.
Yes, it should be at least 1000 STEEM or more.
No, it shouldn't.
Hi @yabapmatt
I agree with you.
If we want to encourage serious businesses to enter STEEM, then we need to forget about providing all services for ... pennies. That's simple as that. Steemit need to decide: do they want to make build business or do they want to give something average to average mass consumer and earn average revenue.
more domination for the whales. wooo.
I agree, it should cost far more than three STEEM, which is 40 cents. 1000 STEEM seems reasonable, until the token value rises. Nobody will want to start a community for $5000, then the value drops, and the next member starts a community for $2500. I'm thinking the cost should be set in US dollars so the cost stays the same. Make it far more expensive than 40 cents, indeed, but a reasonable and consistent cost as well.
Why? How does that benefit anyone? You're adding another barrier to entry on a platform already dominated by whales. Most of the world is dirt poor too and this is all being compared to and priced in USD. It makes 0 sense. The price should be 100% determined on the cost to the network and that's it.
And as far as I know, the name squatting thing isn't even an issue based on how the system runs. So, that point shouldn't even be considered in the argument.
We'll have to find the happy middle ground. Making it too expensive is just as unwise as making it too cheap. A set cost is important. Someone could set up thousands of accounts for 3 steem each, at 40 cents, then sell those accounts for less than the cost of the three steem accounts in the future if the value increases, undercutting the source, and making a huge profit. Not good, especially if that source is designed to be beneficial to the economy as a whole.
A community should be able to gather enough resources to pay for their community, if they're poor. It doesn't have to be too expensive or overly expensive to the point only the wealthy can do it.
Who cares if they sell accounts for more in the future? That's what happens when you're the first to adopt a technology. You benefit from that.
But, again it seems like you're assuming these accounts have names which they will not. The accounts are numbers. The name squatting is not an issue. So, the only way I could see your argument actually taking place is if people were selling communities that they built up. Otherwise, it would only be worth the cost of creating one.
I'm not assuming the accounts have names. On the contrary. The accounts don't have names, so therefore, unless I'm mistaken, someone could purchase many accounts and sell those accounts for cheaper than the cost from the source, and the one purchasing could then name it and carry on much like they could if they purchased from the source.
"Who cares!" Obviously you care.
Think:
Maybe I'm missing something? Maybe this problem has already been addressed? I still think a set cost would be beneficial, so one could not set up a community today for 40 cents, and someone down the road must spend $15 because the value of Steem spiked. The only way the source could be undercut is if the cost isn't set and consistent. The value of Steem fluctuates, therefore, someone could undercut the source, unless the cost of a community account remains the same, regardless of the value of the token.
If they purchase the accounts and sell them cheaper, they're losing money.
Why would someone buy a bunch of accounts and sell them cheaper? That makes no sense at all. They're losing money to accomplish what exactly? Unless you mean they buy the accounts, then hold them and hope the value increases, then sell them cheaper and make a profit. I mean, I guess that's a risk/reward thing. But, a set cost could fix that easily.
Also, I agree with a set cost given the current volatility of crypto. But, I think the set cost should be based on whatever it costs the network to create the community. Maybe plus a couple percent to throw into the DAO too. Raising the cost just for the sake of raising it as the OP suggests is just plain stupid though.
Also, my "who cares" was in response to people buying a lot of communities. They still need RC and thus Steem to run them, so it would benefit us all in the end.
If I purchase 1000 accounts today at three steem each, that'll cost about $400. If the value of Steem rises, it still costs 3 STEEM to create a community account, but I could sell accounts for 2 Steem, and make a profit, because 2 STEEM then is worth more than the 3 STEEM were worth when the account was purchased. If steem was worth $5 each, $15 would be needed in order to create a community account, but I could sell accounts for $10. I could sell 40 of my 1000 accounts for $400, and still have 960 accounts to sell.
Do you see now how you're missing the point and just yelling at the clouds?
"But a set cost would fix that." Yes! And that's all I'm saying! LOL! Damn.
You also need to realize that having people create a ton of communities benefits Steem holders. They need to hold Steem to utilize them. Raising the cost will ultimately affect the potential value of Steem.
You have to consider competition as well. Why come here and pay to create these communities when they can do it on Reddit or elsewhere for free? Sure, you can make a little money. But, it's not easy and the money made by most people on here isn't enough to keep them here. Just look at the amount of active users here. Not very many.
Yes, they need Steem which gives them RC credits. That's how the communities are able to run. This all ties back to communities needing to hold Steem. Thus increasing the value of Steem. So having a higher barrier of entry to just creating the community is a terrible idea and will hurt us all at the end of the day.
Btw, sorry for all the replies. I'm on my phone and it was easier to sort out my thoughts this way lol.
Too many replies, and we're going all over the place. I'm saying if there's a cost (there is) it should be a set to one dollar value and remain consistent.
You can have your opinions about the place and everything else but that doesn't change the reality of the situation.
No, it should be free!
I agree that 3 Steem creation fee is too low in general. I would rather like to see a requirement to hold Steempower in the main Community account in order to stay active. The amount of Steempower to be hold in the main account depends on the size of the community. Lets say per 1000 users maybe 100 Steempower for example.
Instead of forcing people to pay a certain price for creating a community I would rather like to see requirements for the certain size of each community.
On the blockchain, communities have a numerical identifier - so no name squatting issue.
I think you are operating under the assumption that communities are exactly like tribes, but, they are actually very different products.
That is a bold statement when talking about a product that hasn't been released yet. With communities having moderation features, I don't believe that it is anywhere close to being an inferior product. It's more like the next evolution of how we do social media on a blockchain without everyone being in the same big 'bucket'. It's also quite possibly an excellent solution for content discovery which is currently a challenge with all of the focus on a global 'trending' page which tends to often be overrun by the same topic (Steem and Steemit) even with 'honest' voting being much more common after HF21/22. Being able to subscribe to communities/topics that you like to regularly see is quite a powerful feature.
However, communities could certainly be used in the way that tribes are used by running a custom interface along with their own token, but, that likely won't be the most common application for them. Running your own interface and token could be likened to 'running a business' as you have explained and using them in this way would certainly come with additional infrastructure and operating costs, just like tribes do.
How much does it cost to make a subreddit? 🙂
Thank you for your feedback and this post - I appreciate the passion and care in regards to new developments on the Steem blockchain.
Wtf? What a horrible mindset to have. Here I was loving how open & accessible things like the internet, open software, blockchain + crypto, and Steem included, made things. I'm here to champion for a more open & accessible space, not another "pay up you fucker" type of environment.
Feels so strange that you think this way since your very own words:
Are the exact reason I want Steem to be different. The current method sucks. Break down the barriers, allow anyone who wants to create a community come in and create one!
Plus, I think with the whole "name-squatting" thing you're missing a critical ancedote: Reddit
Creating sub-reddits is free, and Reddit has about a bajillion more users than Steem. Even still, it's not too hard to get a name you want on there.
All that being said, if the price was raised to $1 - $3, I wouldn't be opposed. Especially if it went to the dao, that was a good idea.
I agree with you.
That is a very pompous and airheaded statement. Most of the world is poor. Lack of money doesn't mean lack of ideas, potential, or value. This statement really has me questioning what kind of person you are. Wow. Disgusting.
This. Steem is already dominated by whales. Raising the barrier to entry on anything is completely asinine. The community is already small. How do you expect to grow when there are free alternatives out there.
I'm really questioning how much thought other than greed and stupidity went into the OP's post.
100%
Always be careful when making broad-stroke callouts on large groups of people. OP is apparently able to drop hundreds of dollars to startup every little idea they have, good for them. Many people can't.
We should encourage the "start from nothing, rise to greatness" ideology on here, not shout against it. That almost feels opposite to the entire idea of crypto, blockchain, and the internet as a whole!
Dear @stuffbyspencer, @treepi
I unfortuantelly agree with @khaleelkazi. We cannot expect to keep receiving great things done and pay pennies. That would never allow to cover dev expenses. Simple as that.
That's absolutely nightmare. If anyone could do it, then you can be sure that serious businesses will avoid STEEM at all cost. Simple as that.
Yours,
Piotr
I can't disagree with this more. Open-source software has proved this model already. Free things =/= bad things.
This is the internet, notorious for fast & scalable & lowcost solutions. There are legit money-making subreddits out there which, again, are completely free to setup.
Paying for communities isn't helping cover dev expenses as is. Burning STEEM doesn't feed developers, at least not directly enough. We need to think of a new way to go about that, communities should not be in that discussion.
Although I agree the fee could be higher and we could all benefit from that, I also find it problematic to price these things in USD. I've always viewed 3 Steem as becoming a lot of value in the future due to massive gains/volatility.
In my opinion, the price of these services should be determined by how much stress they put on the network, not some arbitrary artificial scarcity number we came up with based on legacy fiat.
So, if it is going to be 3 STEEM per community, we will soon see Thousands of communities trying to do similar things owned by many people.
STEEMHUNT1234
STEEMHUNT4321
STEEMHUNT3214
STEEMHUNT2143
STEEMHUNT1243
STEEMHUNT1234
....
....
Well then, I can start off a new community with any name and do anything I want now. Great.
This is not going to be a thing. @roadscape has mentioned it's just going to be a number ID that can be named.
Again this seems based on your first point being what you thought it was, it won't matter if your community is the first or 1000th to be created, what matters is if you can get it attention and if users will want to use it.
of what? to burn more steem, to send steem to the dao? doesn't look like a lot of authors are doing this in general so why force it onto something like communities.
Yeah, good one.
Don't have time to read the full post atm but just wanted to point that out when it seems most was based on your first point.
I agree. Seems like a fumbled start lead into a bunch of wasted breath.
Is it possible there could be 10 HUNT coins for instance? ID# 4534, 24675, 3421, etc? Won’t that just be confusing, especially when trading on the open market? That would be a huge issue in my opinion.
**Edit: I am thinking of SMTs not communities. Woops but still might apply so I will leave the comment.
No you're not. You are launching a community.
lol, this 100%
Seems like people are a bit to entrepreneur-trigger-happy today & are thinking that every single fart that happens on Steem has to be some sort of business
Yes. The low cost made me cringe. I could earn enough with this comment, if I tried hard enough, to start up an entire community. I don't see how that low cost will bring in any outside money if these words are all it takes...
I see your point but I disagree. As you said, a community is basically an account with a few special features. I want a low barrier to entry. I want 10000 failures. That is how we will find the gold. A low barrier to entry is what leads to mass adoption. It allows for innovation from parties who couldn't afford to get involved otherwise. It worked with web 1.0 and 2.0.
I do think it should be doubled though, with 50% going to the dao.
I agree that 3 Steem creation fee is too low in general. I would rather like to see a requirement to hold Steempower in the main Community account in order to stay active. The amount of Steempower to be hold in the main account depends on the size of the community. Lets say per 1000 users maybe 100 Steempower for example.
Instead of forcing people to pay a certain price for creating a community I would rather like to see requirements for the certain size of each community.
Yep! I agree that some sort of requirement to hold as much Steempower in a community proportional to the amount of users and active members in it, have lotta more sense.