The Next Evolution In Social? Blockchain Backed Steemit
Up until July this year, every social network on the internet has presented fundamentally the same opportunity to users, albeit packaged in different and interesting ways:
Users can broadcast a communication in one form or another.
They receive some kind of social currency in return.
The social currency varies from site to site but the common ones are:
The number of followers a user has.
The amount of likes, favourites or comments received.
The quality of the discussion initiated.
The amount of traffic that's generated.
But July saw the launch of a new social network that represents an attempt to evolve the basic model. It's called Steemit, and it doesn't only reward users with social currency, it also rewards them in cryptocurrency.
For anyone unfamiliar with cryptocurrencies such as Bitcoin, this simply means that you earn a digital currency that you can then exchange into real dollars.
On Steemit, you earn money.
So, what is Steemit?
For the average user, Steemit is similar to Reddit and not a million miles away from Facebook. You submit blog-style posts and other users can comment on your posts. Users can also upvote your post if they think it should be more visible on the site.
The new and exciting element though, is that you are rewarded in 'Steem' (digital currency) for your posts, comments and upvotes, depending on their popularity. The Steem can then either be exchanged into real cash or reinvested into 'Steem Power', which is your authority and power on the site.
Here's the other clever bit: Steem Power is also a type of share in the company, meaning each member of the community literally owns shares in the company.
Steemit CEO Ned Scott put it like this:
"The way it works is quite great for the users, where the better a post performs, the more the poster and voters earn in Steem Dollars and Power."
Why Steemit Looked Strong Early On
Steemit generated some impressive numbers early on. After launch, their user base expanded by tens of thousands each week and the way users behaved on the site was eclipsing some of the established social networks.
In comparison to users of Pinterest, Reddit and Twitter, those on Steemit spent more time per day on the site and visit more pages.
My Steemit Emersion
I've been active on Steemit for about two months and I've found it to be very addictive—more so initially than any other social network—and as founder of an online startup, believe me, I've tried them all.
It may be surprising to hear that I managed to earn over $1,300 worth of Steem in that time. Some of it I converted into dollars via Bitcoin, but most I chose to reinvest in Steem Power.
I'm not revealing this to gloat, but instead to show that it's possible to make real money on Steemit and to hold that money in your hand within a few days, if you wish.
Why it's not all rosy
Steemit has divided the cryptocurrency community. Some have become evangelists for the platform, hailing it as a vehicle capable of taking blockchain technology to the masses. Others have cried out against it, some even calling it a Ponzi scheme—an accusation vehemently opposed by Steemit enthusiasts.
The new user explosion that Steemit saw in the first few weeks has now slowed considerably. This could mean the platform's stalling before takeoff, or it might just signify that the launch hype is over and now the steady climb begins. It's too early to know either way.
One statistic that stands out however, is the devaluing of the Steem currency. I don't pretend to understand the ins and outs of how Steem works (there's a detailed White Paper on the site for those of you brave enough to read it) but what's plain to me is that one month ago the Steem Power I held was worth about $1,000 and today it's only worth half that.
Better currency market minds than my own would be able to offer explanations and forecasts at this point. I'll just have to rely on time to tell whether this devaluation is related to something that's askew in Steemit's workings, or if external factors such as the price of Bitcoin are to blame.
Evolution is a dangerous game
Statistically speaking, being the organism that mutates to become the first in its evolutionary class is a risky business. The vast majority of such mutations don't go on to become the dominant genetic line.
I'm not suggesting Steemit's chances of success are anywhere near as low as a single mutation in the history of evolution, but I am saying that Steemit does represent an evolution, so risk is inherent. On top of that, it won't be the last social network in this new class of sites that pay users with cryptocurrency, others are due to launch soon.
The fact is that all tech is constantly evolving. Just as tapes gave way to CDs and CDs were killed by downloads, Myspace was eclipsed by Facebook and perhaps, one day, Facebook itself will be swept aside too. Will Steemit be the platform to achieve that? Probably not. Whatever happens though, this new evolution where cryptocurrencies are blended into social networking is one to watch.
