Steemit.com is running at a loss! Start generating revenue or get out, you are strangling other applications from succeeding.

offgridlife (74) · 6 years ago (edited)

I have the answer if anyone wants to listen to me ... it is very simple. I have the answer @ned @exyle it will take me 2 minutes to set up..... I can send you the script now if you like.

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kus-knee (74) · 6 years ago (edited)

Do tell. Are you joking or serious?

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offgridlife (74) · 6 years ago

No ... I am completely 100% serious. But nobody at Steemit seems to really care. I run a few small blogger blogs+ Youtube Channel and generate $50 per month by adding the Adsense script to the side of my blogs... with the # views Steemit blogs would earn a lot more. It’s easy to set up @ned

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offgridlife (74) · 6 years ago

If we all subscribe to @ned on YouTube he will hit 1,000 subs and can add YouTube Ads ... sometimes I make $500 USD a month on YouTube with only 3,000 subs.

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offgridlife (74) · 6 years ago

If only @ned would read my ideas I could really help him.

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https://steemit.com/steemit/@offgridlife/how-to-help-steemitcom-make-hldrqxyy

offgridlife (74) · 6 years ago

Monetize Everything .... start with Adsense and Youtube....

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yangyanje (63) · 6 years ago

This article was truly insightful! This information should not be taken for granted.

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jonmaim (63) · 6 years ago

Steem Inc. continuous funding of Steemit.com is probably what helped make this community great. But I agree it's time for them to generate revenue from it.

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6 votes

exyle (79) · 6 years ago

Steem Inc. continuous funding of Steemit.com is probably what helped make this community great

Yes I agree. They have grown a tremendous community. But it's time to look at it in a new light now.

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5 votes

connecteconomy (71) · 6 years ago

What happens if steemit inc makes such a loss that they have to shut down Steemit.com?
That would pretty much be the end if understand you correctly, right? Because the other interfaces are not really ready to take over or can’t afford the full nodes needed.
Hm...

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exyle (79) · 6 years ago

No, Steemit inc doesn't own the blockchain. They do develop for it and own the website Steemit.com.

Everyone can setup a full node. And some have (previous post). So the blockchain will always be there as long as these nodes are alive.

But Steem inc. does own a lot of the infrastructure that apps use currently to access the blockchain.

I want to see this change. More decentralised. But it costs money. Being able to Generate revenue is therefor a must.

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connecteconomy (71) · 6 years ago

Yes.. I think part of the community would be really against accepting advertisement, but we have to see Steemit as a business.

Ideally the Blockchain and community could sustain itself by constantly adding value and keeping prices at a certain level. But accepting ads could be a great way to transition to that stage. It could be an interim solution.

Unless of course Steemians would be incentivized for allowing ads in their feed. Like the Brave browser does. A fair revenue share - then everyone would be for it, I guess :)

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markkujantunen (74) · 6 years ago

Yes.. I think part of the community would be really against accepting advertisement, but we have to see Steemit as a business.

Those people have no business interfering when adults talk real business. Unless they're ready to pay up to cover the infrastructure costs themselves, they should shut up.

Ideally the Blockchain and community could sustain itself by constantly adding value and keeping prices at a certain level. But accepting ads could be a great way to transition to that stage. It could be an interim solution.

You can add value all you want but getting money out of it is the crux of the matter here. Advertisements or other type of paid promotion, subscriptions and tipping are the only viable long-term solution. Relying on a game of greater fools can work for while but it will end in a pile of rubble eventually.

Unless of course Steemians would be incentivized for allowing ads in their feed. Like the Brave browser does. A fair revenue share - then everyone would be for it, I guess :)

That, and nothing less or nothing more, is what makes a blockchain-based solution like Steem unique. Distribution is guaranteed to be safe from the arbitrary dictates of a central authority. The way to monetize content is exactly the same as with traditional social networks. The only differences are in distribution and governance.

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jasonyoakam (43) · 6 years ago (edited)

I've got to be honest I'm a little confused by this. Are there not any kinds of rewards associated with running a full node on the steem blockchain? I thought that full nodes got some percentage of all of the newly minted STEEM.

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sorin.cristescu (71) · 6 years ago

Unfortunately not. Witnesses get rewards from validating blocks but there is no automatic reward linked to running a full node. You have to rely on the hope that, because you run a full node, the community will "acknowledge" the effort and you'll get more votes for your regular witness

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bozz (70) · 6 years ago

As much as I don't want to see Steemit bogged down with all kinds of adds like other places, I don't want to see it go down the tubes either. Another idea in the line of advertising could be promoted posts. As much as you like or dislike vote buying. Paying money to make your post a promoted post could be a way for them to generate revenue. Instead of paying money to a third party service, you would just pay it directly to Steemit.

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exyle (79) · 6 years ago

There needs to be a revenue stream being developed from outside of Steem. Advertisements work for most websites. I know it's not cool and add free is better. But we are all invested in this blockchain so we all indirectly benefit too from incoming revenue outside of the chain. Thanks for your suggestions.

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stackin (78) · 6 years ago

I’m curious what the cost is to run a single node for an app. 🤔

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exyle (79) · 6 years ago

I'm hoping @good-karma might share some of these numbers. I'll ask him.

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good-karma (76) · 6 years ago (edited)

Our fullnode server (only) cost around 1k eur per month, note that we don't have the same load as Steemit (website). If load increases, we have plans on load-balancing fullnode servers.

3 votes

exyle (79) · 6 years ago

Thanks for letting us know, man.

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cryptospa (73) · 6 years ago (edited)

@good-karma, does every Node store the same info or not?

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ahmadmanga (65) · 6 years ago

Thanks for the numbers! I was interested in knowing how much it costs you!

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jarvie (70) · 6 years ago

Would be interesting to know as well. Also how they are paying for it? Is it from a steemit delegation or beneficiary rewards?

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cyberdemon531 (71) · 6 years ago

Reminder Steempeak.com doesn't have any beneficiary rewards!

Awesome article btw!

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3 votes

exyle (79) · 6 years ago (edited)

Do you know if they have a revenue model? Do they have their own full node?

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cyberdemon531 (71) · 6 years ago

I don't know, you'd have to ask them :P

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exyle (79) · 6 years ago

Thanks, and I just did.

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ahmadmanga (65) · 6 years ago

Did they give an answer yet?

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cyberdemon531 (71) · 6 years ago

Noice, keep up the good work, enjoying the perspectives lately!

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sharpshot (65) · 6 years ago

I think Steemit Inc. needs someone that understands the financial side, as they obviously haven't had that so far. If I was Ned, I would of put adverts on already. Why lose money when there's no need? The fact that steemit has always had that beta in the logo since I've been here shows me that they want to make something better. Monetize steemit and get back to working on SMT's and a new social media platform that doesn't have the flaws that steemit does. They can also charge for using their nodes, why should other projects use them for free? That's not sustainable and there's no point building things that aren't sustainable.

preparedwombat (70) · 6 years ago

Do we have any idea how many full nodes there are and how many of those are being paid for by Steemit Inc.?

Also, is that $2 million figure just for nodes or does it include the corporation’s other expenses?

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exyle (79) · 6 years ago (edited)

Probably more than one by Steem inc. But I can only see api.steemit.com up right now. There must be more.

Other notes are run by these.

I think that 2 million probably also includes things like the photo picture hosting service they provide and other things.

I wish all this stuff was more easily accessible and not so secretive.

If they want to become a blockchain development company then they should do that. No point in wasting resources also providing a social media platform website, free API's and photo hosting that generate no revenue.

This then becomes a task for the app developers and people that want to build on the blockchain.

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cryptospa (73) · 6 years ago

@exyle, so, you mean that we don't have DLT?

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exyle (79) · 6 years ago

O, sorry for the confusion. No we do.

I wrote about it here.

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cryptospa (73) · 6 years ago

@exyle, I will read everything. I want to know what is going on. I am a financial analyst. Crypto is in a Downtrend. We are now in a phase called "Capitulation". I don't know when it will end, but I think Bitcoin may drop well below $2000. Probably $1000 or $1500 per coin. So, in my view, Steem may drop well below 0,20$. 13-15 cents let say. I want to figure out if we will survive until the next bull run on the market starts. But we will have to wait a lot. So, hard times are coming...and they will not finish soon.

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roleerob (66) · 6 years ago

Thank you for this very informative post @exyle. Of all that you said, that stands out to me:

"Steemit inc. is paying for these full nodes by selling their own STEEM on the market."

"Steemit inc. has a lot of pre-mined STEEM. But it's not an infinite amount. It will run out at some point and even faster if price goes down."

I will assume, as one of our Witnesses, that this is 100% accurate. If so, frankly it is alarming to me, as it doesn't indicate this enterprise was originally built on a foundation which would last. My only hope is, there is more to the story.

I would like to clearly understand, from the outset, what "the plan" was to transition out of this state. If for no other reason, as you say, than *"... it's not an infinite amount." Exactly. So, again, doomed to fail ultimately, unless there is more to "the plan."

[Note: On top of that, as you indicate, the need to continuously sell that volume of STEEM seems counterproductive to the overall goal of having the price go up, not down ...]

Any more input on this? I accept the point of your post is that Steemit needs to generate income. But, with all due respect, it is coming from someone outside of Steemit, Inc. and leads to the impression they have no thought or plan of their own. From the beginning ...

I'd really appreciate your further perspective on this. Thanks agaiin @exyle! 👍

motoengineer (63) · 6 years ago (edited)

As with most other other models, the deployment of a piece of technology will often come with a lost in the initial stages. You must give away most of the tech for free (if you can) to support the idea. This is typically the case for leading edge ideas.

Obviously, the struggle to cover basic costs appears to have driven the price of steem down, but as with anything, the privatization of steem nodes brings business opportunities to some, which means we're going to test how well this "business" idea of steem is going to survive. This will be capitalism at its best.

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exyle (79) · 6 years ago

It's deducted from the announcement post of the layoff.

The bottom of STEEM is way lower than they expected and therefor they had to let ppl go. They couldn't afford to keep the on.

The core dev team is still there.

Right now the focus is to reduce the costs of the full nodes by reducing RAM usage. It's priority because it's costing them 2 million dollars a year. Not much in the good times but a problem in a long bear market and if this comes from STEEM than it puts a lot of pressure on the market.

Outside revenue models need to be found, now more than ever.

I don't think this situation was fully anticipated but we are in it now so we have to get a move on or everyone loses.

roleerob (66) · 6 years ago

Okay, thank you @exyle.

Ultimately I favor a fully decentralized architecture spread over the globe, with no single point of failure capable of "bringing down the whole house."

Right now, at this point, it is of real concern to me we don't appear to have reached anything close to that.

I appreciate your efforts, hopefully allied closely with others, to come up with a viable solution.

All the best to you @exyle!

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heremonium (57) · 6 years ago

@exyle, just thank you, hope @ned takes in consideration what you're saying

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normalbro (55) · 6 years ago

You made this so easy to understand! Thanks

s3rg3 (67) · 6 years ago (edited)

Ever thought about having a small percentage of every action a user, dapp, or whatever is done on the blockchain, a small percentage is for Steeminc, instead of implementing annoying adds? Exchanges work like this and has huge benefits for everyone. What is the revenue model for eSteem?

I profoundly and intensely hate the advertising model.

exyle (79) · 6 years ago

It's called beneficiary rewards. The problem is that it's still a reliance on the STEEM price something advertisement (dollars) circumvents.

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s3rg3 (67) · 6 years ago (edited)

Still, I am more in favor of a (form of) subscription based model than advertisement model. Advertising is Worsening experience for Everyone. I am super glad my ad blocker is working on every site depending on advertisements. We are all on a innovative path with this Steem blockchain technology and so on, I may hope that we/they can come up with better revenue models than these old fashioned and user experience interrupting ad revenue models.

Also all these ideas of generating revenue focus on Steemit blogging site. What if most of this community will adapt to third party dapps. Steemit inc won't benefit from advertisement because no one will see them anymore.

Just brainstorming here.

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exyle (79) · 6 years ago (edited)

If you are in favour of a subscription model and you are not the only one then developers can implement this option in their applications and you can have what you want. An add free Steem blockchain experience.

Not everyone though has the option to pay to access the blockchain without adds. We need free options as well. But as I have shown in my article non of this is free. Everything cost money.

Steemit.com right now is preventing others from generating revenue because they offer a service at a loss, for free (Paying for it from a finite STEEM amount). This is such bad business practise it needs to stop.

For as long as Steemit.com is free or generates no revenue other apps can't compete with it.

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3 votes

s3rg3 (67) · 6 years ago

Steemit was and still is free and I have never heard other apps complaining

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gadrian (66) · 6 years ago

This problem was just uncovered for many of us. Who would have thought steemit would end up in such a situation without any warning?

The free nodes from steemit discourage others who are capable of running such big nodes, but not for free. That would help prevent a single point of failure, i.e. steemit.

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prameshtyagi (71) · 6 years ago (edited)

Actually not free. The value of their steem stake comes from providing the services to all the stake holders. They should use their stake to fund these activities as the value of that stake comes from the activities themselves.

Nobody will fund the infrastructure cost while the benefits of that will be transferred to those who have STeem in their accounts.

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motoengineer (63) · 6 years ago

i think the goal of any social media website is to not be a subscription based model. People will always ask "what am I really paying for?". because if I have to pay to be a regular user, I wouldn't use steemit (or any version of it).

I need to think about this a bit more, but another model (such as those employed by credit card companies) is the "pay per transaction" model, except the transaction cost is born by the seller and not the buyer. Of course its one half dozen or another, someone needs to pay at the end of the day.

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chrisrice (59) · 6 years ago

If the price of Steem rises, @steemit will benefit from the 44 million Steem they own. That is what motivates them to increase usership, and includes users from Dapps like @steeveapp and @partiko.

I am for @steemit taking a percentage of upvotes $ from Steemit.com but it makes no sense to take a percentage from Dapps that launch their own websites or apps @s3rg3 Dapps own the blockchain just as much as Steemit does and that is the actual intention behind a blockchain cryptocurrency!

Charging for node use is a good idea though.

Nice post @exyle You summed it up nicely. @ned and the @steemit team did a great job getting the word out but now it is time to make @steemit profitable.

If they place advertisements on Steemit.com, a Dapp like @steeveapp or @partiko won't have to and that will give them a competitive advantage over Steemit.com while generating $USD in ad revenue for @steemit.

Like you, I hope @ned @andrarchy and the rest of the @steemit team will use a combination of all three 👍🏼

TAG: @gadrian

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s3rg3 (67) · 6 years ago

I meant charging for dapps using the nodes

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chrisrice (59) · 6 years ago (edited)

Ahh okay @s3rg3 yeah, I think that is a good idea... but I think @steemit should be run as a business that must turn a profit first, otherwise the other Dapps will be competing with a website that is operating at a loss a.k.a. Steemit and have to cover the costs of nodes at the same time.

Operating at a loss is actually a tactic used in business to put another company out of business.

Example:
Uber and Grab a Cab were doing it against each other for a few years in the Philippines until Uber folded and sold their stake to Grab.

Once the merger was finished, Grab increased their driver rates and started operating for a profit.

This is essentially what Steemit is doing to other Dapps but unintentionally and is one of the things @exyle mentioned.

Another good thing to mention is that Steemit can start using advertisements but other Dapps can refrain from using ads to acquire more market share from Steemit.com.

Because of that I think we will always be able to find Steem Dapps that don't use traditional advertisements.

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motoengineer (63) · 6 years ago

Charging for actions typically results in users rationing their actions. However, if one were to do this, you can hide the costs within the transaction. For example, the content creator has to give up a portion of their rewards. This is the case with dtube. I would be interested in seeing how dtube balances their sheet.

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pablob (44) · 6 years ago

Hey @exyle , regarding adds, they could be so much better than a banner...they could be done like a post, they COULD be posts between content posts, also targeted by communities if they put groups on steemit.....

exyle (79) · 6 years ago

Anything to generate revenue outside of the reward pool or even Steem itself. Thanks for your suggestion.

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vikisecrets (68) · 6 years ago

Very reasonable options, the current bear market could also be an opportunity to make Steem(it) more decentralized and sustainable.

ikar59 (54) · 6 years ago

I'm cool with the three options, a combination of them as you said could be a good solution to this problem. As an user I don't mind a little Advertisement on the site if it helps it

pouchon (70) · 6 years ago

A lot needs to be done for survival of #steem.
Clearly this issue was going to surface anyway.
Price drops or more users.
Advertising looks pretty good and it will help everyone in the long term.

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synergized (44) · 6 years ago

If Steem would link up with Golem, is there any possible solutions with that?

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jamesndungu (61) · 6 years ago

They can also decentralise advertisement by allowing paid steemit membership to steemit users in need of extra premium steemit features such as placement of adverts on personal pages etc.

I support the idea of App developers being charged, this will also reduce the number of spam apps.

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calprut (68) · 6 years ago

How if "Option 1" included the choice in steemit member profile?
I will be happy to choose "Yes" for ads to pop up on my Steemit pages.

Honestly, YES Steemit team need to gain their revenue now.

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spectrumecons (69) · 6 years ago

Thanks @exyle for the analysis and proposed solutions. I was not aware that Steemit Inc's cost were that high and continuing to grow.

I think the bear market could be a blessing in disguise as the problems you identified were going to come to surface eventually. The harsh bear market just brought this all forward. Therefore, it also brings a solution forward. Imagine if we were dealing with this problem 2 or 3 years from now because costs have completely blown out.

I have mentioned the importance of advertising months ago. I cannot see a sustainable solution that does not incorporate advertising at some point. The ideal time to have started including advertising would have been in January when the platform was teeming with activity and there were more eyes on Steemit and Steem content.

Obviously we cannot turn the clock back but we can promote Steem as much as possible as possible to get eyes back on the website. Promoting the platform can be done by everyone and anyone. Increased usage will bring in more advertising revenue.

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yogajill (62) · 6 years ago

It's just awesome you're doing all this research and compiling to help build a better sustainable Steem ecosystem Mark. Good for you! I have been trying to get comfortable using other front end then steemit but have a ways to go in this department. I've never thought of it from a monetary perspective and in all honesty if paying a percentage of my rewards will help create a more stable reliable decentalised blickchain I am all for it. But, the UI needs to be reliable and usable. Today I am using Busy but when I want to edit my comment, it's complicated to do I have to scroll around to find it. Most other times when I have used esteem (and all others too for example) to make posts if I click out or something distracts me while creating the post I loose all my work! I could create my post in another program and copy it over. Yes. That is possible. I often use steemit to get links for images to add to posts (edit) because I can't add pics easily to some of the UI's (actifit) for example. It's also worth noting that I use my mobile device to do 99% of the steeming that I do. Steemit even if it is not flashy is always reliable so I tend to use it the most. But, would be happy to pay a percentage of post rewards to keep it alive. Until a better UI is running.
On another note I just learned through Steemitboard that you're having Christmas very soon in the Netherlands! That's cool! I had no idea that different countries celebrated on different days...other than Ukrainian Christmas which is often in January. Hope you are enjoying the preparations! 🎁🎄☃️❄

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mentalhealthguru (54) · 6 years ago

you should be a teacher on a skill teaching website lol. I think steemit should be taken down. It would solve the identity problem of steem vs steemit and allow steemit inc to just focus on development.

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onnovocks (49) · 6 years ago (edited)

"This adds even more costs to the nodes (more traffic) Steemit inc. provides for all of us for free."

Well, not free really. Some of us, have been buying that pre-mined Steem with cash.

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partiko (66) · 6 years ago

Thank you so much for participating the Partiko Delegation Plan Round 1! We really appreciate your support! As part of the delegation benefits, we just gave you a 3.00% upvote! Together, let’s change the world!

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chesatochi (72) · 6 years ago

The path to implement ads is something they can add right away.

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hanen (64) · 6 years ago

Users need to return and be active everyday if they really believe in this platform. Together we can make it work and be better than it was. Yes ads might be annoying, but users can pay some steem to not see the ads. There are many options, but nobody is listening :(

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newageinv (70) · 6 years ago

These are definitely some short term resolutions but they (and other projects on Steem) should also think about this as they continue to build the ecosystem. For example, they could potentially build a layer of revenue for the creation of the Smart Media Tokens protocol by using Steem as a GAS for token creation. Also, if they build out their exchange of SMT, it should be self sustainable in that the volume generates revenue for the infrastructure and costs in addition to Research and Development. This is important as we cannot allow the ecosystem to become stake as the technology evolves.

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adetorrent (74) · 6 years ago

Thank you for this very well laid out and easy to understand article - much appreciated.
Paying for the nodes by selling Steem has at least two negative effects as you outlined - downward pressure on the Steem price, and the fact that Steem is not infinite. Steemit Inc. must have been hoping for Steem to "moon" to a really high price such that the costs become negligible for them. What a terrible business 'plan'.

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motoengineer (63) · 6 years ago

I don't think this was the business plan from the get go, because its not sustainable. I think everyone knows this. Instead, if you commonly look at technology that is newly deployed, they almost all operate with a net loss in the beginning because they are spending money to get it into peoples hands. It just becomes a game of when the business idea takes hold and you can adjust your plan to make it profitable.

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joythewanderer (78) · 6 years ago

Appreciate your effort looking into all these issues. Getting revenue is indeed important atm for steemit.inc, hope they can find a way to make Steem more sustainable, to make it look better than a pyramid scheme (which steem of course not).

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jongolson (74) · 6 years ago

great points man. and you helped break down what costs so much and why.

the technically illiterate like myself appreciate it lol

i know i’m grateful for steemit. it was my first experience on the blockchain and i continue to use it everyday.

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valth (68) · 6 years ago

Thanks for making a short and easily understandable explanation of what the current problems are, and some potential solutions to it.

I personally think that it's time for Steemit Inc. to put up some ads in order to get a cash flow of fiat money. That way they can keep going independently of how the market develops in the next year. I would love it if they made it in a way where only blog feeds / trending had ads, but then allowed each user to opt for showing ads. The ones who opt to show ads on their blog post should then get a cut of the revenue just like how YouTube or any other media platform share the ad revenue with content creators.

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greendeliverence (58) · 6 years ago (edited)

hi exyle maybe a very stupid question, what happens with the steemit.com links we use in our documents when steemit goes down? How can we link to other documents in the steem blockschain? What happens to everything our google searchability? I'm very linky in my documents because I don't repeat the same thing over and over again. what happens then if you want to run a witness? Must you pay for a connection to a full node?

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cryptospa (73) · 6 years ago

@exyle, I have some questions. I will be glad if you answer my questions.

How many FULL Nodes do the Steem Ecosystem has?
Is the information stored on one Node is the same that is stored on the other Nodes? What I mean. If i uploaded today I pic with me at the office I work at, where this information (this file) is saved? On all of the nodes or just one of them?
So, each Node is run by different organizations, such as Steemit?

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motoengineer (63) · 6 years ago

let me see if I can answer number 2, since I think they are important questions.

The information stored on one node should be the same as another node. The cost associated with nodes is born from the calling of data from a particular node. The security between nodes (in regards to having the same set of information) is why we have witnesses.

The nodes only store text information. Photos are not stored on the blockchain, instead the blockchain stores the text link to the photo, otherwise the blockchain would be massive in size.

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cryptospa (73) · 6 years ago

@motoengineer, where are the photos stored?

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motoengineer (63) · 6 years ago

On a server thats paid for by steemit inc, but it is not on the blockchain.

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cryptospa (73) · 6 years ago

@motoengineer, so where is in this case the blockchain? A blockchain that holds text (info or paths) to the servers on which the pics and posts are stored?

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motoengineer (63) · 6 years ago

the actual blockchain exists on the nodes. Since dapps require the information on the nodes, the nodes must exist to provide the dapps with the information they need. More dapps, means more nodes needed. In order to reduce the load on the nodes, they can be more efficient. Right now, it seems like they know they can streamline how the nodes function.

A basic example would be, if i ask the server for information X, and it sends back XYZ, then the portion YZ is useless to me. So lets reduce the erroneous information.

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cryptospa (73) · 6 years ago

@motoengineer, oh man... I am not a tech geek. I don't understand that well this "language". :). Anyway, I am a financial analyst. I think Bitcoin price will drop below $2000 per coin. Probably $1000 or $1500. So, STEEM may drop well below 0,20$. For example 0,13$-0,15$. I just want to figure out if we can survive in this downtrend. Prices of crypto may stay low at least for the next 1-2 years.

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blazing (70) · 6 years ago

advertisement may be the new form of generation of money may be if they want

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metahiveproject (32) · 6 years ago

I hear what your saying, but from what I heard this bubble they been riding needed to pop so sites like Steemit that actually have real infastruture can thrive, we need to promote the hell out of Steemit on all platforms and show how this is an amazing and solid site. Yes, when I'm able to pay I will. But I'm going to promote Steemit as much as possible because I believe that it will succeed where others fail. Hang in, the tide is about to turn, those who buy Steem will reap the benefits like those who signed up for Bit Coin when they were giving away 10 free coins IMO Wish every one well Thanks for the great posts...

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cryptospa (73) · 6 years ago

@metahiveproject, in a long run crypto market will start rising again.

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socky (72) · 6 years ago

Option #4

Steemit Inc Must Build an Exchange

Steemit Inc has the ability to create massive source of revenue for themselves and for the reward pool.
All they need to do is create an exchange just like any other major exchange.

Steem Market

We have a Steem Market, but that is only good for small volume trades between Steem and SBD. Have you ever looked at the large transactions? They never use the Steem Market. They can't use the market. They also can't trade against other currencies. They are forced to take the large sums of STEEM and SBD offsite to a real exchange. Those exchanges are taking fees that profits the exchange. Steemit Inc doesn't benefit from these large trading volumes.

BlockTrades

This is not a solution either due to high fees. BlockTrades is an Over The Counter (OTC) exchange. It will never compete with a real exchange and no one uses it for very large transactions.
Both of these trading options have their place, but there is a massive vacuum where a Steem Exchange should be.

The Fix

I propose that the Steemit Inc build and operate an exchange. The Steem Market can remain just like it is to cover small volume trades between STEEM and SBD. BlockTrades can remain just like it is to handle simple OTC transactions. The Steem Exchange would work on a virtual currency system just like other exchanges use. One can transfer STEEM or SBD to the new exchange before trading takes place. That will fix the transaction speed issue from drowning the Steem Market and provide another option. The exchange will also need to include other currencies. This would fix the volume issue and add revenue. Let's also give multilingual options. Open this up to the rest of the world. German, Russian, Spanish, French, Chinese, Japanese just to list a few.

If Steemit Inc would make an Exchange division to run this exchange and charge a tiny fee on trades just like any other exchange, then they can generate revenue. Exchanges are highly profitable by doing this. Trades between STEEM and SBD can remain free as there is no cost to transfer STEEM and SBD. STEEM will also be a primary trading pair which will boost STEEM as a popular world currency. By adding other currencies and charging trading fees, they create a source of new revenue coming into Steemit Inc to fund Steem projects and upgrades. This revenue could cover Steemit Inc costs and could overflow into the STEEM reward pool. This would benefit everyone and could kick STEEM into high gear.

An exchange will bring in new users to this platform. Other major exchanges have around 10 million users. Binance has exceeded this in less than a year. STEEM is over 2 years old and barely broken 1 million users. If Steemit Inc runs an exchange, this will create an avenue for Steem Exchange account users to become STEEM account owners. The amount of visibility to this platform would be enormous. Value would be added to Steem platform as the value is expected to follow Metcalfe's Law. This is an exponential value prediction that Facebook closely resembled in which value is expected to increase by 4 times for every time the number of active users doubles. Steem is expected to follow Metcalfe's Law.

In conclusion:

Steemit Inc can profit massively from running an exchange. This would support operations even when the price of STEEM is down.
Steemit Inc can make STEEM a common trading pair with everything else. This doesn't exist and would make STEEM a powerful currency like Bitcoin and Ethereum.
Excess revenue can fund our reward pool, witness reward pool, or both. This would support all Steem users and foster growth.
A Steem Exchange will bring in huge numbers of new Steem users. Easily 10X users that we have currently. This would provide STEEM dominance with all the other competition emerging and grow value.
This will not require the use of ads to spoil the STEEM experience.

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bil.prag (68) · 6 years ago

great work, thanks for the research!

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kaminchan (70) · 6 years ago

Nice article with clear explanations and solutions! Much appreciated.

Many thanks.

Posted using Partiko iOS

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theclosetlab (56) · 6 years ago

nice post

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arcange (73) · 6 years ago

Congratulations @exyle!
Your post was mentioned in the Steemit Hit Parade in the following category:

Comments - Ranked 5 with 82 comments

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foxkoit (70) · 6 years ago

It was interesting to read, I'm going and I'll read it all again.

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dmilliz (68) · 6 years ago

Very informative article! Easy fir anyone to understand. Those 3 options make a lot of sense and the only way forward for steem I see possible. It is the start of this we need to see now.

Posted using Partiko iOS

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cryptopie (81) · 6 years ago

Yes we need to have some ads in here @exyle so that it will help steemit.

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mediahousent (67) · 6 years ago (edited)

Thank you @exyle for this very detailed and concise info. I have been struggling to understand the drama behind the 70% layoff of workers. Now I know it is as a result of the full nodes cost.

First, let's realise something quickly here that if not for the current situation of the market we won't be privy to the current state of Steemit Inc. about to go bankrupt as a result of maintaining the nodes. So, a big thumbs up to Ned for being so bold to lead us on...

Meanwhile, your suggestions/options are laudable but I would agree with the third option - charging developers for using their full nodes.
Since the apps created by the developers on the blockchain charges (maintenance fees) the content(s) created and consumed. I see no reason why Steemit Inc. shouldn't ask developers to fix their own fee for using their full nodes too.

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ahmadmanga (65) · 6 years ago

I agree with what others said here, that it's been great for Steemit to be completely free until now but it has to find ways generate revenue from now on.

I wish there are more options that won't take anything from the end user but it's okay even if they take %5 of each post reward now.

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