One of my initial suggestions to steem was to introduce optional advertising (to any user that wants to opt-in) to break the closed-loop economy with some new revenue stream.
Around two weeks ago I realized my suggestion was redundant, in that advertisers could simply use Steem Power to do their work. The closed-loop economy isn't as closed as I initially thought it was because advertisers can buy advertising power (steem power) instead of ad placements. And this power can be deployed in a multitude of ways.
This is the exact reason why we feel so strongly about steemit because it puts the advertising dollars directly in the hands of the content creators and not the middle man.
Leon Fu - I don't think advertisers would buy a bunch of steem to power their posts/ads on this system. That would get their posts visibility on the front page but they would have no idea if the eyeballs looking at it are interested in their product. Advertisers want targeted ads which they can get on facebook because FB has so much information on each person's profile that they can deliver a specific target market to advertisers. Steemit would need to incorporate a similar model to get the same ad dollars.
An advertiser having lots of Steem power could up vote posts that feature their products. They can target an audience based on the kind of content they up vote using their Steem power. It's similar to Google AdWords, where advertisers bid for keywords to get their ads shown next to those searches. Here, they could buy a bunch of Steem Power, then up vote posts they believe have the content and the audience they're trying to target. They can even announce what kind of posts they will up vote, giving people an inventive to produce that kind of content.
That's my argument as to what might eventually drive fundamental demand for Steems beyonds just investors and speculators. I see advertisers buying Steem in order to gain influence on the platform, if we get a critical mass of users.
I recognize that long term, very long term that the inflationary model/algorithm will need to change, when account creations plateau. And that ad dollars could be used to offset this change. But I think it is too risky for it to implemented the way you suggest - that using steempower to incentivize and upvote content that the company does not create themselves. When I see big companies doing web contests the trolls always ruin it and it backfires. And if someone made a horribly funny inappropriate content, this audience would probably up vote it the most. Having said that, advertising on steemit is something I have been thinking about in trying to understand the long term viability of this inflationary crypto model. Ultimately, the real question is what is the reason for people to continue to buy steem? I think the advertising reason is far away from happening. One thing you did not mention in the video, is what critical mass will look like. What happens when the first big celebrity joins steemit? The adoption rate, meaning account creation, will explode. I remember when Ashton Kutcher joined twitter and changed everything. So the inflation model being used to support viral growth will be sustainable for quite a while. Which means buying steem as a speculative investment will continue to be sustainable as long as growth outpaces inflation. I would like to see steempower become a popularity contest like numbers of friends on facebook or high score in a game. It should be published beside every profile name. If steempower is seen as a status symbol then that demand in the market will support the system further. But thanks for the video, I always like hearing people talk about crypto at a deeper level.
In my intro video on steemit (https://steemit.com/video/@rickystef/vlog-about-how-i-got-started-in-crypto-currency), I express the same frustration. There is not enough time in the day to stay on top all the research in this industry. I do my best as well, but it is impossible. I have started a small group of friends who will share info together. Let me know if you plan to build the same network, how you plan that, and can I get in? Thanks for the video guys. Also, check out my new steem show, you guys might like it. I have been wanting to get into online video for a long time, and thanks to steemit.com now is the time to do it. https://steemit.com/steem/@steemnation/steemnation-1-dabbling-our-toes
One of my initial suggestions to steem was to introduce optional advertising (to any user that wants to opt-in) to break the closed-loop economy with some new revenue stream.
Around two weeks ago I realized my suggestion was redundant, in that advertisers could simply use Steem Power to do their work. The closed-loop economy isn't as closed as I initially thought it was because advertisers can buy advertising power (steem power) instead of ad placements. And this power can be deployed in a multitude of ways.
This is the exact reason why we feel so strongly about steemit because it puts the advertising dollars directly in the hands of the content creators and not the middle man.
Leon Fu - I don't think advertisers would buy a bunch of steem to power their posts/ads on this system. That would get their posts visibility on the front page but they would have no idea if the eyeballs looking at it are interested in their product. Advertisers want targeted ads which they can get on facebook because FB has so much information on each person's profile that they can deliver a specific target market to advertisers. Steemit would need to incorporate a similar model to get the same ad dollars.
An advertiser having lots of Steem power could up vote posts that feature their products. They can target an audience based on the kind of content they up vote using their Steem power. It's similar to Google AdWords, where advertisers bid for keywords to get their ads shown next to those searches. Here, they could buy a bunch of Steem Power, then up vote posts they believe have the content and the audience they're trying to target. They can even announce what kind of posts they will up vote, giving people an inventive to produce that kind of content.
That's my argument as to what might eventually drive fundamental demand for Steems beyonds just investors and speculators. I see advertisers buying Steem in order to gain influence on the platform, if we get a critical mass of users.
I recognize that long term, very long term that the inflationary model/algorithm will need to change, when account creations plateau. And that ad dollars could be used to offset this change. But I think it is too risky for it to implemented the way you suggest - that using steempower to incentivize and upvote content that the company does not create themselves. When I see big companies doing web contests the trolls always ruin it and it backfires. And if someone made a horribly funny inappropriate content, this audience would probably up vote it the most. Having said that, advertising on steemit is something I have been thinking about in trying to understand the long term viability of this inflationary crypto model. Ultimately, the real question is what is the reason for people to continue to buy steem? I think the advertising reason is far away from happening. One thing you did not mention in the video, is what critical mass will look like. What happens when the first big celebrity joins steemit? The adoption rate, meaning account creation, will explode. I remember when Ashton Kutcher joined twitter and changed everything. So the inflation model being used to support viral growth will be sustainable for quite a while. Which means buying steem as a speculative investment will continue to be sustainable as long as growth outpaces inflation. I would like to see steempower become a popularity contest like numbers of friends on facebook or high score in a game. It should be published beside every profile name. If steempower is seen as a status symbol then that demand in the market will support the system further. But thanks for the video, I always like hearing people talk about crypto at a deeper level.
awesome
Interesting. The new Steemit economy.
I actually wrote a post about the same core idea: https://steemit.com/steemit/@moonjelly/what-if-steemit-goes-corporate
In my intro video on steemit (https://steemit.com/video/@rickystef/vlog-about-how-i-got-started-in-crypto-currency), I express the same frustration. There is not enough time in the day to stay on top all the research in this industry. I do my best as well, but it is impossible. I have started a small group of friends who will share info together. Let me know if you plan to build the same network, how you plan that, and can I get in? Thanks for the video guys. Also, check out my new steem show, you guys might like it. I have been wanting to get into online video for a long time, and thanks to steemit.com now is the time to do it. https://steemit.com/steem/@steemnation/steemnation-1-dabbling-our-toes
Great stuff! Thanks Tai.
just got back
Just actually wrote about this...check my most recent blog.
Tai always puts out valuable material