Full Transcript of Ned's Bloomberg TV Interview

Here's a link to the video. Below is my transcript of the interview.

https://www.bloomberg.com/news/videos/2018-05-07/steemit-1st-social-media-platform-built-on-top-of-a-blockchain-video

Yvonne Man: "Now to a company trying to combine social media with cryptocurrencies. Steemit is a blockchain-based social media platform which was founded 2 years ago and already has about a million accounts. Joining us now to talk a little bit more about it from Tokyo is the CEO Ned Scott. Ned thanks so much for joining us. Well, fascinating story really for you guys at Steemit. Tell us a little more about it, how does it work, and walk us through the business model of it -- how do you earn money to pay for posts."

Ned Scott: "Well Yvonne and Betty, thanks for having me on, very excited to be here. To give you a brief synopsis of what we're doing. We built Steemit which is the first social media platform built on top of a blockchain called Steem. And Steem is a cryptocurrency that gets released autonomously to users who are contributing content to the blockchain itself and it has distributed more than $50 million worth of this cryptocurrency over the last 2 years.

Betty Liu: "So, so where are the revenues coming from? Obviously you've talked about how it's in advertising revenue as well for you guys, because depending on the Steemtit accounts and what they actually post there, that leads to more eyeballs and potentially more people coming through. But people have said the content so far has been pretty low quality, given  the fact that some of these users are kind of just trying to earn a quick buck, they're building their reputation. What's your plan for improving the quality on the platform on the content side and how can you compete with the likes of Reddit and Instagram?"

Ned: "One of the big ideas for the advent of the entire system was that we would use a cryptocurrency to absorb wisdom of the crowd that would then inform objectively or generally objectively where the quality content was. And you could use that to really create a trending page of content where you see the highest quality of content at the top. We've only been somewhat successful in that mission. And going forward there are still plenty of software upgrades happening to help us further embrace the idea that people can inform a cryptocurrency to help us find quality content."

Ned: "As far as the business model and what makes this all sustainable, Steem is a cryptocurrency much like Bitcoin and Ethereum. And it has taken on speculative value for a lot of the same reasons. People desire cryptocurrency as a store of value, as a transaction medium, as a way of having value somewhere that is truly their own in an autonomous contract that only they own. So Steem takes on value for a lot of those same reasons, but then it starts to become more valuable because it's distributed unlike any other cryptocurrency. No other cryptocurrency is distributed as far and wide as Steem. Because Steem is pervading the medium of content where there are already billions of people available and ready to participate in this new cryptocurrency ecosystem."

Betty: "OK, so Ned, I just want to be more clear though about the business model. Because people write these articles and then depending on the number of clicks? Or is it dependent on the number of views then? That's how they're paid then in Steem?"

Ned: "There's actually this sort of treasury. A sort of social treasury that's coded into the blockchain. New tokens are emitted or distributed every single day by the logic of the blockchain. And the users who hold the coin help decide how to distribute the new tokens from that treasury or as we call it a rewards pool. And they do that by just sort of applying their subjective valuation of the content that they're reading: they hit upvote, the upvotes get calculated inside the blockchain against the treasury or rewards pool, and then the blockchain decides how to distribute those tokens to all the users of the platform. And the interfaces create a business model on this. By seeing the tokens flow through the system, they're able to take a percentage of those token, and because those tokens have that speculative value just like bitcoin, the websites are able to sustain their operations based on the tokens that they're receiving as well."

Betty: "So, wait, people cash out afterwards, that's how they're able to generate that revenue then?"

Ned: "They're able to freely trade Steem against Bitcoin or against some fiat currency. So they can cash out. Lots of them stay in the system and continue to use the currency as more influence for themselves on the platform. But there's total liqudity at the same time. So as you're earning these tokens it's like earning money."

Betty: "So, could you see this business model then working with other social networks? I'm thinking about Facebook, for instance, which is so dependent on the advertising model. Could you see something what you're building fitting into Facebook?"

Ned: "Absolutely. And Facebook in the last several months Zuckerburg actually came out in his yearly address and said that they're looking at cryptocurrency and how it can be used to positively impact commuting building. Well that's a big focus for us. If we look at our concept, I can without a doubt say that this is the beginning of a major phase shift online. In 5 and 10 years, there will be thousands of websites and applications that have integrated tokens to really reward their contributors with value. And Facebook won't be an exception to that."

Ned: "So the way we're getting there is we're working on a new protocol called Smart Media Tokens that will allow any existinor new social media application player to launch their own tokens to empower their users."

Edit 1: Updated title to show that this is a full transcript for people who can't or don't want to watch the video.