Exploring the STEEM Social Media Blockchain – Will it pay to pay users to post?
Intro to STEEM
Sometimes two volatile elements can come together to form something explosive, something that is completely unpredictable. For many of us, this is social media. Social media has given a public voice to millions of people and it has introduced a host of ethical questions on the way. Ethical questions that few of us know how to answer. For example, the rise of fake news on social media is a major issue. So too is the possibility of a couple of CEOs (Facebook and Twitter) having complete control over social media information. The second disruptive technology is blockchain. The blockchain is a decentralized open source technology that allows global financial technologies to process without a single point of control.
Bitcoin, which is the very first blockchain, was all the rage but it has long since quieted down, at least as far as hype is concerned. When it turned out that people would not be paying their car wash in bitcoin instead of dollars (the ins and outs of bitcoin are a bit complicated) the hype around bitcoin died down quite a bit. But what happens if we combine social media and blockchain? What you get is STEEM, a social media network that actually pays its users to post!
How exactly does STEEM work?
STEEM (which is technically owned by a company called Steemit but the network is shorthanded as STEEM) rewards posters with its own version of bitcoin for posting content. The central idea behind STEEM is simple: The users who post content are the stars of the STEEM network and therefore they should be rewarded. In today’s social media world, advertisers like discount codes Plusvouchercode, which gives consumers the power to save up to 70% on goods, pay to advertise to social media users, and thus social media users are not direct sources of income for networks like Facebook.
STEEM was founded by Ned Scott and Dan Larimerm, who also happen to be the founders of BitShares and EOS, which are also blockchain related products. Users on STEEM do not actually just get paid to vote. In practice, STEEM users get paid when other users upvote what they have posted. In fact, STEEM looks a lot like Reddit. STEEM actually pays in two forms of currency, Steem and Steem dollars (Steem dollars are pegged to the US dollar so that they are free from the wild price fluctuations of crypto coins.) The users of STEEM can also get paid to curate or discover content as well. The curation process on STEEM involves voting on comments and content submission.
STEEM’s obstacles
So how is STEEM doing? The answer might not be as exciting as one may think. As of January 2018, STEEM only had 43,552 active users. This doesn’t even come close to Facebook’s 2018 active users which were at least 2.23 billion worldwide. But why is this? Why would the users of Facebook not want to simply earn free money for their hours of “free posting?” The clue to this problem lies in the complexity, expense and price uncertainty of crypto coins like bitcoin. For one thing, dealing with a crypto coin is complicated and there is a steep learning curve involved. The average person using Facebook doesn’t understand what a hash function is, which is the backbone of all blockchain transactions (a hash function or hash is a computer process that takes one input and creates a different value of a fixed size.)
When bitcoin was first hyped in the media, many of its advocates swore up and down that it would replace most debit card transactions. This never happened because dealing with crypto coins is not only more complex than using a debit card, but it also is not insured like your money in the bank is.
When something happens to our money in the bank, whether it be fraud or a mistake on our part, the transaction can be reversed. This is not so with crypto coins. If your STEEM coin is defrauded or if you sent it to the wrong “address” your money is gone. There is also the matter of losing money in the process of converting in and out between crypto coins and dollars. For these reasons STEEM, as good as it sounds, just cannot make it into the big time of social media.