Fred Ehrsam, co-founder of Coinbase, recently went on Bloomberg and offered a surprising take on the future of blockchain technology. He believes the blockchain is set to not only disrupt financial institutions, but giant tech companies as well.
The reason why tech companies like Facebook, Google, and Youtube are so successful is that they create big databases around strong networks that can’t be replicated. These companies recognize that user data is the “oil of the 21st century” and therefore offer free services to collect information by which they then leverage to become middlemen between businesses and customers. This business model can be briefly boiled down to three simple assertions:
- Consumer habits and interests are monetizable.
- Consumers shouldn't be compensated because they're using a free service.
- Third party platforms are.
Admittedly, there is some merit to these companies getting paid. Their innovation and structure provides users and content creators a platform to disseminate their work. However, this doesn’t justify robbing consumers of any opportunity to monetize themselves or for content creators not to be adequately compensated for the traffic that they bring.
Well where does Steemit fit into all of this?
Just like how the blockchain removes record-keeping or credit charging middle men while acting as a ledger, decentralized apps built on the blockchain like Steemit can remove the necessity for third party, data storing, and data analyzing tech companies. This is precisely the goal of Steemit.
Steemit
Steemit represents one of the first attempts in cryptocurrency at addressing the monetizable inequalities in content sharing platforms. This platform was first conceptualized in 2016 by Ned Scott and Dan Larimer, the creator of BitShares, to be used along the same vein as reddit. It was designed to be a social news service with the unique attribute of storing most its data in the #STEEM blockchain. Embedded content such as videos, however, are kept on a server outside.
On this platform, people can upvote, comment, and post various forms of content like they do on reddit; the difference is that they are financially rewarded for it in STEEM and Steem Dollars. In this way, user’s habits and interests are directly monetizable simply by participating on the platform. Additionally, topics and posts of significant value are easily recognizable as they receive a high level of community engagement. This reputation based reward system not only empowers users by cashing out on their social influence, it also incentivizes creators to produce quality content. By removing a centralized third party platform, Steemit has created a more equitable distribution of wealth among users, creators, and the platform.
Is The Future Here?
It still remains to be seen whether blockchain based Dapps like Steemit will be able to disrupt the incredibly popular and influential third-party platforms such as Youtube and Facebook. Providing alternative content viewing platforms in an increasingly crowded industry is a daunting task. However, a $458,188,472 market capital (coinmarketcap.com 12/13/17) is a strong indicator that suggests a growing market within a still nascent and emerging cryptoeconomy.