Steemit is a cryptocurrency-enabled social media platform that rewards users for generating content.
The Good: Provides an innovative solution for micropayments to content producers; Active platform with a growing user base; Threatens traditional social media / user generated content platforms
The Bad: Slightly confusing economic system with 3 different digital assets (Steem, Steem Power, Steem Dollars);
- Provides monetary value back to participants of the social network
- Has an active and diverse user base on an intuitive platform
- Introduces “normal” users to the world of cryptocurrency
Steem tokens (STEEM) and Steem Dollars (SBD) allow the Steemit social network to do away with traditional micropayments to content creators. Producing and interacting with content is rewarded by the Steem network in token payouts. Payouts to users come in the form of 50% SBD and 50% Steem Power (an invested version of Steem that increases network influence). Technically, the value of the currency comes from its ability to be traded on cryptocurrency exchanges. However, the Steem network allows users to participate in the network either by buying in, or “working in,” simply by generating subjective value (ie. creating an engaging post).
Use Case Example:
Whether you’re reading product reviews on Amazon before making a purchase, looking at restaurant reviews on Yelp before going out to eat, or simply scrolling through /r/Aww on Reddit, you are viewing content produced by people just like you. User-generated content is everywhere nowadays (FB, Instagram, Youtube, etc.), and without a doubt, it is extremely valuable. Where is all the money from this content going then? For the most part, into the pockets of these platforms. Hence, Steemit looks to reverse this model of capitalizing on content created by users by giving value back to them through their participation in the social network.
Steemit takes the existing idea of providing value back to content creators and makes it workable through the enablement of blockchain and cryptocurrencies. Ultimately, their ability to bypass directly paying other users for their content by rewarding content creators is a huge step in paying people for their content. It will be interesting to see just how valuable content is coming from the average Joe. Most importantly, all users are paid for the content produced, representing a radical shift in social media networks. Therefore, while it may not overtake major social media sites in the near-term, it certainly poses a long-term threat to the way social media networks monetize their platforms.