One seemingly embedded feature of social media is that it is the users that generate billions of dollars’ worth of value for the shareholders of social media companies.
The user creates content and generates data for the company, while the user gets to make use of network for free.
With the explosion of blockchain-related startups in recent years, it was inevitable that some would turn their attention to the this established business model.
One example is Steemit, a social media platform which runs on a decentralised network known as Steem.
The company, which changed the license of its Steemd code so that it is free to use with the MIT open source license, 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…”
The Steemit platform works by having users reward other users for the content they produce. Much like Reddit, when a post is liked or upvoted it becomes more visible on the site. The crucial difference is that Steemit then rewards the original poster with its own cryptocurrency that can then be exchanged for cash or bitcoin.
The digital tokens can also be reinvested into Steam Power, which is a token representation of the influence a person has on the platform. The more steam power an individual means that their upvotes count for more.
The Steem blockchain database is ‘minted’ daily and distributed to content producers. The use of a blockchain means that the rewards and benefits of the content are distributed amongst users rather than all flowing to a single entity.
The company describes itself as:
“At its root, Steem is simply a points system. However, because this points system is blockchain-based, the points can be traded on markets as tokens. People buy and sell these tokens, and many hold in anticipation of increased purchasing power for various Steem-related services.”