Why I believe in Steemit's success

Steemit has the potential the revolutionise both the concepts of social networks and cryptocurrency. 

Here's why I am interested in this platform and why I think it will succeed. 

There are several reasons why I belive in the success of Steemit:

Firstly, it looks to drive growth through human capital - which is the composition of a given person's skills, experience and knowledge accumulated over time. I see Steemit as an investment in human capital, you are incentivized to share your music, art, writing, ideas and experiences. 

The returns accruing to this type of capital as opposed to physical capital is that they are increasing in scale. My knowledge can be shared many times amongst a wide range of people without reducing the effect of that knowledge on my audience's ability to utilise it. On the other hand, physical capital has decreasing returns to scale as machinery depreciates over time, reducing the scale of the economic activity.

The more we invest in Steemit by creating unique content, the higher the rewards are as people capitalize on this knowledge. For example, it allows the free transmission of knowledge. I have studied economics at university and through Steemit I could reproduce all of this knowledge for anyone at practically zero cost. This points to another charateristic associated with human capital, that is positive externalities. 

Steemit is helping the diffusion of knowledge and maximising the potential for these positive externalities of human capital. An externality refers to an unintended economic effect of a transacation on a third-party that is not inolved in the transaction. 

For example, my university education was a transaction between myself and the university; people reading this post had no part in this transaction. I paid money and took a student loan to pay the university for access to its resources, classess, facilities, events and support services. 

However, once I start to upload all of the knowledge I have stored in my brain (and with the help of some of my notes and textbooks of course! to share the entire university course), the benefits of my educational purchase become available to everyone for free! Also, this act of altruism does not reduce my stock of human capital, I am sharing it. 

This is what is known as a spill-over in economics.

I have studied a wide range of courses such as microeconomics, macroeconomics, philosophy of science, econometrics, matrix algebra, industrial organisation to name a few...

Let me know in the comments below if you would like to see me do this... I would be happy to facilitate such a spill-over if there is demand for it! 

Whoops.

Steemit therefore has the potential to reduce large inequalities between developed and developing countries. Steemit can be used to reduce the asymmetry between the education and knowledge received in any given two places. Moreover, it allows better cross-fertilization of disciplines, which is needed for economics to progress as an exact science. 

By being dogmatic and not incorporating achievements in mathematics, computer science and physics, economics has been labelled the 'dismal science'. Through Steemit, it provides a platform for people of all disciplines to share knowledge and is a fruitful avenue for collaborating on research. 

@biophil has been doing some interesting posts on game theory... for example, https://steemit.com/gametheory/@biophil/what-s-a-minnow-to-do-the-game-theory-of-steem-part-4 

I for one will be closely following him to keep up to date with his PhD research. Before Steemit, I would not be able to interact with others in such a way and it greatly reduces the barriers needed for knowledge diffusion. I have been on this platform for around a week and I have already found some very good posts on how to build skills that I feeel I need to improve, such as Excel and programming.

In my dissertation research, I found that the level of human capital had a strong, statistically significant effect on the within-country income inequality for developing countries. By using a panel dataset with over 130 countries, I estimated regressions to see the effect of human capital on income inequality and this effect was especially potent for developing countries, whereby a rise in human capital would reduce income inequality.

By facilitating knowledge spillovers, Steemit can help reduce inequality in developing countries. This is also what I hope to see from this platform and any product or service that can reduce inequality should be highly valued in our society. It could develop into some sort of micro-finance platform to empower the unbanked and bring people into society. 

Microfinance is generally a loan given to unbanked groups of individuals. The individuals themselves would ensure everyone makes the payments on time, although there are variations across countries. Loans would be used by the group to start a business and use profits to pay it back over time. Eventually, they will be able to get on their feet and have access to financial services. 

A controversial topic in this area has been high interest rates levelled on borrowers but with Steemit this concept of microfinance would be turned on its head. We could also see pictures and updates on crops, fishing or whatever venture they would get into, that would be quite cool I think. 

Secondly, another reason about why I belive Steemit will succeed is it seems that they have a long-term plan with this new feature absent in other cryptocurrencys that locks you in for a long period of time with the STEEM POWER and VESTS. Their efforts to produce a whole new blockchain separate from Bitcoin could be seen as a testament to their credibility. 

As it is a new platform, I think I have answered my own question of why posts about Steemit get so much reward. Steemit is still in its infancy and the network is relatively small. Therefore, the returns are higher for the posts about Steemit as this topic has the least information, it is relatively scarce. I could find all the other information somewhere else. 

Helping to on-board people, helping them learn and understand the system is the most profitable and useful avenue on Steemit as the network size needs to achieve critical mass. Once this critical mass is achieved, I believe we will then see a dissipation of payouts and arising from a diversification of the users, then the content then the rewards. This incentivizes users to learn, help to develop and grow Steemit, instead of incentivizing with purely monetary rewards. 

Thirdly, communicating with @kim-dahae, who is from South Korea, made me realise something - Steemit opens up a whole new world of opportunities. 

After reading her post  - https://steemit.com/introduceyourself/@kim-dahae/steemit-has-been-famous-in-korea - I found out she works in the tourism industry. I've always been really keen to travel to the Far East - especially Korea and Japan. As a visitor to Korea, @kim-dahae may be able to provide me with some very useful insights and hidden gems in her city. She could in effect be my virtual travel guide through Steemit, allowing for a much more personalised experience. We are demanding it more and more in our products and services, we want to feel unique. 

Who is a better travel guide for South Korea than @kim-dahae, a local who has similar interests to me!...

If I wanted my personalized travel guide, I could transfer her Steem Dollars in exchange for a posts on the sights, what to do and local spots in her city, Busan. I could also up-vote her post, leave comments allowing others to get a feel for the travel experience. 

It just made me realise how we could enhance the interaction between individuals! 

Knowledge spillovers help facilitate enterpreneurship and this is how Steemit will continue to grow... 

Finally, another post that got me thinking about the value of Steemit was a post by @thedashguy... https://steemit.com/steem/@thedashguy/how-steemit-could-transform-cannabis-marketing-and-force-others-to-play-along-instead-of-deleting-accounts

It elaborates on how Facebook and Twitter have shut down legal cannibas-related companies accounts. A similar situation is happening with the banks in America. Deposits from dispensaries are refused leaving them exposed to raids by federal police with piles of cash sitting around waiting to get seized. This isn't just happening to marijuana dispensaries. The absence of censorship on Steemit is also beneficial for whistle-blowing on cartels or other issues and journalism. Could it be used in some legal way as to prevent abuse pertaining to freedom of information requests?

When determining the value of Steemit we also have to consider what price would society pay for this beneficial freedom and the elimination of censorship? Also, information is a scarce resource and users are encourgaed to contribute as much information as they can not only in their posts but also their comments. How much value does this bring to society? 

It is hard to quantify but I think it is large enough to make Steemit and the users successful. 

I am beggining to think we have more power than we realise; collectively as content creators we ultimately will decide where Steemit will go and what it will do...