In this age of ubiquitous internet and social media, we’re constantly sharing ideas and content with our fellow internet users. But has it ever occurred to you that you could be paid for that? Thanks to blockchain technology, it’s now possible.
For long, giant social media companies have profited off user-generated content, while the actual creators of the content, who are the ones that keep the wheels rolling, get little or no share of the pie. And content creators often have to leverage several means to get paid. And emerging tools like ad blockers make it difficult for advertisements to reach targeted audiences.
Steemit is a platform that’s leveraging blockchain to change the way we view and use social media by rewarding active users with cryptocurrency. It was founded in 2016 by Dan Larimer – who is also the founder of popular blockchain projects BitShares and EOS, together with financial analyst Ned Scott.
The Steemit model incentivizes both content creators and people who interact with it. This way, an ecosystem is created where content owners are rewarded, as are people who engage with it.
This piece delves deeper into the Steemit platform as we discover how it works, what is the Steem token, and everything in between.
What is Steem
Steem is a token based on the content-focused, blockchain-based and decentralized platform Steemit. Steem enables content makers and publishers to earn money from their content. It works the same as other social content platforms like Reddit and Facebook; only this time, contributors get rewarded for their content, as do individuals who upvote other people’s content.
Owners and shareholders of content platforms such as Reddit and Facebook have made billions of dollars worth of value from user-generated content – with the content makers themselves not gaining at all. Steemit hopes to change this.
As it says on the white paper:” Steemit aims to support social media and online communities by returning much of its value to the people who provide valuable contributions by rewarding them with cryptocurrency, and through this process create a currency that is able to reach a broad market including people who have yet to participate in any cryptocurrency economy.”
How Does Steem Work?
To discover what the Steem token is all about, we first need to understand the Steemit network.
First, the Steemit network generates and distributes Steem tokens every day. Users can then hodl these tokens, exchange them for other cryptos, or sell them for Fiat currency. Steem has become uber-popular in the crypto and content community since it allows virtually anyone who can curate interesting content to earn money.
Unlike other cryptocurrencies, Steem does not rely on mining or network consensus for new coins to be released. Instead, the network automatically generates new Steem units and distributes them to users who are actively engaging with the platform. The amount of tokens you get is proportional to the number of upvotes you get and how much you engage with content on the site (upcoming and commenting).
What Problem is Steem Solving?
Steem is helping to solve a persistent problem in the content world. The content economy is currently incredibly fractured.
Content makers work hard to curate great content, yet their only hope to earn off of it is via advertisement (which in itself is not guaranteed), affiliate marketing, and other uncertain ways. Other times, content creators have to give up control or direction of their work, which ends up corrupting or watering down the original spirit of the content.
Compounding this issue is the fact that even the current routes for monetization are becoming less effective. Content consumers are not exactly willing and enthusiastic about having to pay for online content. This is due to the huge amount of content that is readily available online. People would rather go elsewhere for content rather than pay for it.
Consider ad blocking, which has considerably stalled digital advertising. In 2019, for instance, 47% of internet users were using some form of ad blocking, and this figure is set to continue growing. This is something that affects content creators because advertised messages never reach their intended audiences. And for content makers who instead opt to put up a paywall, it mostly just serves to send readers away.
Steemit aims to change this status of things. On the platform, content creators can post their amazing content and get paid. And content consumers have an incentive to interact with that content.
Who can Benefit from Steem?
Steem was built to empower regular people from all walks of life by rewarding them for their contribution to online communities. The Steemit platform processes actions (publishing of content, upvoting, commenting, etc.), super-fast, and payouts are made seven days after the fact. Below are the groups of people who can benefit from Steem:
- Content creators
- Content curators
- Remitters
- Market-makers
- Bloggers
- Commenters
- Internet readers
- Referrers
- Sign up party hosts
The Three Crypto Tokens of Steemit
Steemit actually has three kinds of tokens. These tokens interact in various ways to bring value to platform users. They include Steem, Steem Power, and Steem Dollars.
#1. Steem
Steem is the ‘main’ token of the Steemit platform. Network users get paid in Steem for their contribution to the network. Steem can be sold on the open market, just like any other token. It’s not advisable to hang onto Steem for too long. Since the token is released every day, hanging onto it for too long risks dilution.
#2. Steem Power
Steem Power (SP) tokens enable you to have proportionate ownership in the Steemit platform. It’s a measure of how much influence you have as a user. As the network grows, so does your influence. Part of your earnings as a contributor to the network are in Steem Power. The more SP you have, the more your upvotes will be worth. In this way, the Steemit network allows users to build their influence over time. You also receive more rewards when you upvote someone’s work, and they receive a higher payout from your upvotes compared to the upvotes of a relatively new user.
#3. Steem Dollars
Steem Dollars are meant to be a stablecoin and are thus pegged to the US dollar. Content makers are paid partly in Steem Power units upon posting the content on the platform. Steem Dollars actually offer three options to users:
- Convert them to Steem and cash out, HODL, or exchange them for other cryptos
- Hold onto them and earn 10% interest
- Exchange them for Steem Power
How does the Market Look Like?
As of May 30, 2020, Steem was trading at $0.213665, world ranking at #76 in the crypto market. It has a market cap of $78, 497, 841, a 24-hour volume of $3, 476, 286, a circulating supply of 367, 387, 538, and a total supply of 384, 361, 632. Steem’s all-time high price was $8.57 (Jan 03, 2018), with an all-time low of $0.069192 (March 10, 2017), according to Coinmarketcap.
Where Can you Buy and Store Steem?
Apart from being a participant in the steemit platform, you can also acquire Steem tokens from any of several reputable exchanges. Great options include Poloniex, Bittrex, Cointree, Huobi, Bitit, and Coinsquare.
Storage options for Steem include CLI (Command Line Interface) wallet, eSteem, a mobile app-based wallet, Vessel – a desktop wallet, as well as a paper wallet.
Final Thoughts
Steemit is an amazing platform that rightfully rewards content makers for their contribution to the content world. It provides a solution that’s way overdue, and yet timely. By incentivizing content creation, Steemit facilitates a thriving content community that could start changing the way content sharing is done in the future. The platform is one to keep an eye out for.
