Data is the new oil and we, the users of social media platforms, are the raw material for this data. In lieu of creating, sharing, and engaging with content, the existing social media business models don’t provide any tangible value to the user. Steemit Inc, a New York-based startup, launched Steemit.com as a social media platform built on a decentralized database so that you own your data and can be rewarded for posting and voting. STEEM is the token which is distributed to content creators, curators, and the community on the platform.
Steemit is looking to revolutionize how content is created and consumed and wants to give the power of content monetization to the contributor as compared to the current scenario where platforms have grown into billion dollar giants on the back of user generated content.
Ned Scott founded the company in 2016 with a founding team of five others. Scott (currently CEO and majority stakeholder) got involved with Bitcoin in 2013 and was obsessed with its multiple incentivization applications. This led to his founding of Steemit.
Content Curation Powered by STEEM
STEEM is the core element on which all other decentralized applications function. It has been described by the company website as “a blockchain-based rewards platform for publishers to monetize content and grow community.” Steemit is the first application on the STEEM blockchain infrastructure. It has now grown to support dozens of entrepreneurs who have built applications atop the STEEM blockchain that hosts hundreds of thousands of accounts with real verified people. It has raised $225,000 in an angel round and has over 700,000 users with 100,000 active content creators. It is a top 1,000 website according to Alexa rankings.
The idea is to empower entrepreneurs to tokenize the internet. Tokens allow tapping into three core tenets of business: Fundraising, Monetization, and Growth.
The company is working on a new software enhancement called Smart Media Tokens (SMT), a meta-token protocol. SMTs can be launched by creators to monetize online content and incentivize user behavior. It has seen early success with multiple apps already launched on top of the STEEM platform. These include:
- DLive.io — Live video streaming
- D.Tube — A YouTube competitor
- Utopian.io — Bounties for open source development
- Chainbb.com — Forum software for Steem
- Dsound.audio — A SoundCloud competitor
The platform has a pre-application blockchain layer called STEEM. Anyone who owns STEEM tokens has influence on the platform. The second layer is the application itself.
STEEM is the first blockchain that supports a content management system. There are no walled gardens and anyone can build on the existing infrastructure. STEEM is distributed to contributors and community through reward pools, and the applications can take a cut of this as a revenue stream. Application developers can also launch SMTs to empower their token with parameters and rules to augment what the application is executing via STEEM. The token uses a delegated proof-of-stake protocol via block-creating accounts called witnesses as compared to Bitcoin’s mining model. This is extremely efficient in terms of block production limiting new blocks to only 10% of payouts as compared to 100% of Bitcoin’s. The 90% balance is then distributed to content producers, curators, and Steem Power holders.
STEEM’s Proof-of-Brain Protocol Encourages Creativity
STEEM has incorporated what it calls a “proof of brain” token reward algorithm that encourages people to create and curate content. It enables token distribution by “upvote” and “like”-based algorithms and can be integrated with websites to align incentives between application owners and community members. This spurs more growth for the entire ecosystem. Because it isn’t a service-oriented business, the company does not have typical customers. Rather, it encourages entrepreneurs and community members to grow the platform through incentivized content creation.
Steemit Inc currently does not have any meaningful competition. Scott has not seen a product that is focused on leveraging tokens to grow property and content. The proof-of-brain concept does not exist on any other blockchain and is the true reason for STEEM’s accelerated growth. Scott hopes to cannibalize STEEM before a competitor comes along to take away some of its, uh, steam, and SMTs are a step in that direction.
The Future of Social Media
The founder sees the web evolving with every website and application plugging into a blockchain to get the benefit of auditability. They will be able to pull their own data off the blockchain for analytics, he said, offload liabilities of managing customer funds, and give users the benefit of crypto’s scale and speed. Steemit’s future plans focus on implementing community features that rival Reddit’s subreddit features. The company is also looking to onboard talent for future expansion.
Steemit aims to redefine social media in a world where Google and Facebook are hundred billion dollar giants. It’s a grassroots movement that has empowered thousands of contributors to monetize content and the data they produce. The crypto markets noticed too as the value of STEEM is rising aggressively and is consistently in the top 30 on CoinMarketCap listings.
These stats showcase the progress the young startup is making, and it is an easy bet that Steemit will become a cornerstone of the blockchain economy.
Written with Heena Dhir.