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The fundamental business process of Steemit is selling attention for money, directly.

If this sounds blunt to you, or if you didn’t read yesterday’s article, just a short reminder about your regular Facebook activity: what you see right now on your Facebook wall is 100% customized for you personally, in order to maximize the profit of the network stakeholders and advertisers. Your attention is already sold for money, only you don’t get anything.

On Steemit, attention is spent by interacting with a content distribution platform. Some of the possible actions:

• writing content (articles or comments)
• voting for content
• voting for witnesses
• interacting on content-based games
• maintaining the physical integrity of the platform (as a witness).

All of these actions are generating revenue, directly or indirectly, under the form of a cryptocurrency. This cryptocurrency is merely a symbol mirroring attention.

How Much Does It Worth, Really?

There’s no intrinsic value of attention, its value varies based on consensus (or agreement).

There are two levels of agreement: one inside the platform, and one outside. You can visualize these as two circles, the little one being the community and the big one, encompassing the community, being the outside world.

Inside the platform, people agree to assign a certain amount of Steem to a certain type of actions (voting, betting, etc). Outside the platform, people agree to buy or sell Steem at a certain price, with other types of currencies.

The two circles of agreement are both influencing the perceived value.

If the outside level agrees to put more fiat value into Steem, the actions performed inside the communities will increase, because there will be extra value attached to them. People will spend more attention because it will generate more revenue.

If the inside value of Steem increases, and if this value is perceived as such in the outside circle (meaning the outside circle will trust the inside circle), the value of Steem for fiat will increase as well. In other words, the outside circle will see Steem as a valuable investment.

Subsequently, if the outside layer lowers the price of Steem for fiat, there will be a consequence inside the inside layer. Most probably, the ROI for people engaged in the community will diminish, hence the number of actions may decrease. But it may also trigger other processes, like innovating, inventing new stuff, adjusting, in such a way that the outside world will start trusting the inner circle again. This happened, for instance, at Hardfork 16, which brought very drastic changes to the economical model (inflation, power down interval, etc).

At the core of these processes is not Steem, but attention. Let’s see how attention influences this interesting game.

1. Attention Is Limited In Supply

You can only have as much attention as one person can spend. And you can only have a limited number of persons. That’s the first, and most important difference between attention, the real currency and Steem, the cryptocurrency.

As you already know, Steem is an inflationary token. No matter what you do, there will be 9.5% more Steem on the market one year from now (that’s the yearly inflation rate). Cryptocurrency seems to be unlimited in supply, because it keeps getting printed (or minted, if you want).

But the real currency, attention, is in fact limited.

There are two limiting factors: the number of people actively using the platform and the amount of time they spend here (a rough measurement for the quality of their attention).

Although it seems counterintuitive, the mere fact that attention is limited actually raises its price. We will start to see this as more and more people will realize how much their attention is really worth, by comparing Steem with Twitter or Facebook. As of right now, the social engineering in traditional social media platforms is very effective, bringing a significant ROI in terms of validation. But the mere fact that websites like Steemit are starting to take off will force those platforms to adjusts their processes in the same direction, which will more likely generate some sort of a migration. I, for instance, I already lowered significantly the time I spend on Facebook, naturally. It may also happen that big players will start rewarding people with more than validation, just like Steemit.

These two limiting factors, number of people and time spent, are also influencing each other: if there are a lot of people in the community but nobody pays attention (pun intended), the price of attention goes down. If there are only a handful of people, but their activity draws in a lot of attention, the price of attention goes up.

2. Attention Is Not Transmissible (not fungible)

Attention is the direct consequence of an individual consciousness stream. It is always custom. Its quality and force are based on the individual experiences of the emitter. Hence, attention is not fungible. It cannot be exchanged freely, like a traditional coin. It always needs permission from the emitter and acceptance from the receiver, in a continuously custom process.

However, you can lease it for some atomic activities. For instance, attention can be delegated to voting for posts or to voting for witnesses.

The more atomic the activities, the easier to delegate. The more wholesome and individual the experience, the most difficult.

You can say that the closest the attention is to the person emitting it, the bigger the value. As attention starts to get away from the person, in the form of delegation for instance, the lower its value (curation on Steemit is significantly less rewarding than authoring).

Attention leasing is done by investing trust.

3. Attention Is Self-Propagating

The more you put in, the more you get. The more attention you generate, the easier it gets for other people to spend their attention on the same content. In traditional social media terms, this is called “going viral”.

From a certain threshold, the cost of attracting more attention is below zero. In economical terms, you generate profit.

Surprisingly enough, the attention game is not a “zero sum” game. It’s not “what you put in, you get out”. It can be more or it can be less. That’s a bit mindboggling, especially in the beginning, but once you get the grip of it, it will feel natural. It’s just how life is, totally unfair :)

That’s the third important difference between attention and a currency. The only way you can multiply a currency is by getting a dividend, or a profit from some investment. That’s a verifiable and predictable process, but still risky and slow.

If you sell attention, the ROI is virtually unlimited, although, as we saw, the supply of it is limited. The ROI can also be under the investment, which may mark a loss.

We Need New Rules

Selling attention is much more difficult than it seems. We need new rules for that, new processes, new approaches. So far, Steemit has done quite a lot of work in this direction.

But, the be honest, I’m more curious about what lies ahead.

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I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.

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You can also vote for me as witness here:
https://steemit.com/~witnesses