Since this post is going to be published on Steemit and Steemleo interfaces, both powered by the Steem blockchain, most readers will probably say, "Yes, blockchain based social media can work!" However, we can all agree that this experiment called Steemit, probably the largest such experiment, is still an experiment, and whether it will work or not, remains to be seen.
I am not a heavy social media user. I don't post or browse people's opinions on facebook or tweet frequently. However, I do post pics on instagram once in a while and read tweets from crypto twitterati.
The reason why I don't use Facebook is because I find no relevant reason to read opinions from those who aren't opinion makers, I'm just not interested. And there were 1000 people in my friend list when I was active on Facebook, nothing compared to a billion users the platform has. Add twitter, instagram and snap, and may be other platforms, the number of users will not increase much (same users using multiple platforms) but think about the amount of content and data, most of which I find useless, and that is being generated with little to no incentive.
Traditional social media sites do not allow for monetization of data or content. Unless, one is an influencer and the tweets can influence users to act in a certain way - for example, make a purchase. That is where blockchain based social media platforms come into the picture. Steemit - where my voice, has value. Thanks to token economics built into the blockchain, users can earn crypto for commenting, posting and upvoting.
That incentive has been so powerful, a limited user of social media like me, is also actively creating content on steemit. My experience with social media on blockchain has been limited to publishing content on Steemit, via its dapps, and tribes and using an instagram like dapp called tata. I have tried a few others such as Pepo. I can say I am certainly more active on decentralized social media.
Problem 1 - Wrong Incentives & Poor Content
We have a few 100 hundred thousand users on steemit, and content quality is a challenge. If Steemit had a billion users and 90% started spamming and plagiarizing, how and who will moderate that? If those that wanted to abuse, had 5 alts each? The problem isn't limited to steemit. On an instagram like dapp called tata, i only see plagiarized content and everyone gets to earn tokens. Even on steemit, the existing users cannot decide if actifit is spam or steemhunt short posts are spam. I think monetary incentive isn't forcing users to post quality content, it is just an incentive to post. That will lead to bad quality posts. Everyone is a content creator, but who wants to be the audience?
Now it is not all bad, even if everyone wants to create content. Think about those making TikTok videos for nothing, and what would they do if they were told of D.tube or 3speak. Creating content means that the community has an active user base. But why aren't TikTok users moving to steem based platforms, or Pepo? Do they not know? I'm sure they do, at least some of them, but why aren't they migrating to steemit in large numbers?
Problem 2 - Awareness & Poor User Experience
We all know that Dan or Ned could not have promoted steemit. That is not how marketing works. Geeks and early adopters can help do a beta test, but to get this product to the masses, one needs a tweet from Kim Kardashian. Or something like that.
Then what happens when one stumbles on Steemit? 2 tokens, 3 if you count SP, wallet, keys. Tech nerds may orgasm at the sound of that but users will not give a damn. May be steemit is too complicated, but anything with tokens will require setting up a wallet and understanding wallet tech. It's too complicated for the average person. Social media is supposed to be recreation, not education, at least just to be able to use it.
My experience on all blockchain based social media sites has been good. In the 2 years that I spent on steemit, I improved my SP holdings, gathered followers, so I can say I had some success. On tata as well, I now have some tokens. However, are most people interested in reading my content? Or anyone else's? Even curating bots, are they reading or simply voting to maximize curation. Think we all know the answer.
Problem 3 - Broken Economics
What influences a token price? Demand supply balance. What is the reason to buy a token? On steemit, one needs 15 SP to start, whereas on others, no reason. Just join and start earning. What is the reason to sell? It's as simple as token earnings are free money. Hope that a token will appreciate in value should not be a reason to buy, and hoping a platform riddles with challenges will see token price appreciation is also not sound. Will there be any real user driven token demand with no real incentive to buy but all the incentive to sell? Don't think so.
Add to the above, inflation driven continuous increase in token supply. Is there an incentive to curate? Maybe one can curate and stake for 10 to 20% APR. However with volatile prices, returns can vary drastically each month and no one can rely on token earnings to sustain.
So what's the real problem here? In my opinion it's a problem of distribution and incentives. Also, a big demand piece is missing - Advertisers.
I have already stated that Steemit or any other site requires too much investment of time. One will argue that it is the same with medium or twitter, getting to a large number of followers for a content creator is work anywhere.
A social media sites requires a large number of users, some of whom create content that a large number of people who want to see it. Large user base brings in advertising dollars. Either content creators become advertising points, such as that in YouTube or ads are shown randomly as in Facebook.
Currently, I feel not a single decentralized site has decided what kind of advertising they want.
This is the big picture problem. There is lack of awarenss. If platforms aren't known, then that means small user base. A complicated on-boarding system further prevents new users to join. Wrong distribution and incentives means poor content and poor user experience. Also translates to no real token demand. No user growth, means no advertisers.
Problem 4 (may be not a blockchain based social media problem) - Decentralisation and Proof of Stake seem contradictory
Society at large is based on proof of stake consensus. Those with more money and resources drive changes that impact everyone else in the world. Why were decentralized systems born? To get away from this proof of stake society that is unfair. What consensus mechanism do most blockchain based social media site use? Proof of stake? Almost. Problem? Yes.
Is it all bad?
I don't think so. Clearly, one has to go back to the drawing board and redesign a system that has the right incentives. Also, how do advertisers fit in in the decentralized world. I think 2 things will make blockchain based social media mainstream.
Generational Change - Something totally out of our control and is a tailwind but a more tech savvy millenial generation, or gen Z, will not have a problem with crytographically secures systems. To them, wallet syncing may be quite a routine task, depends on how successful bitcoin or crypto is. If one can redesign sites to have solid user experience like Snap or TikTok, then tech savvy users isn't going to be a big challenge. It'll be time consuming though.
Improving distribution engine and Plugging advertising revenue into the token economics and sharing inflation and revenues with node operators, content creators and audience in better way that prevents spam. That's just an idea, but those that want to create content need to invest more than 15 steem or $50. May be $5000. Or rewards are linked to the number of followers. And those who want to consume can consume for free but should be rewarded using Proof of Attention of something that Brave browser uses. But the current system needs to be discussed and an new platform designed.
I think if the above 2 problems are fixed and the token earnings can be converted into fiat from the platform itself, social media can see more success.
P.S. This post is an entry to Steemleo's writing contest. The post may seem heavily reliant on my experience on steemit but that's where bulk of my experience is, and Steemit being one of the largest decentralized social media platforms out there, is a good example to use as base for this post. Structuring this post was the most difficult aspect for me. Therefore, comments from readers will be much appreciated about what they think about blockchain based social media, and what they think I've missed.