Short Review of the Steemit Social Media Platform

Here I share my thoughts about STEEM as a cryptocurrency and social media platform, and outline how it provies a sound model for incentivizing content creation.

I have had the delight of recently being introduced to Steemit, a company built around blockchain storage of social media content. Steemit users can create accounts that have an array of capabilities. They can send STEEM, author blockchain posts, and convert STEEM to VESTS (or "Steem Power"), which is protected from many types of inflation.

Additionally, users will eventually be able to convert STEEM to STEEM-Backed Dollars, which are pegged to USD using a unique mechanism of coin emission pioneered by Dan Larimer and his colleagues when developing Bitshares.

I have looked mostly at the mechanics of coin creation. In this area, Steem produces an excellent user experience via the utilization of a long mining queue, where miners compete for slots in the queue based on proof of work. The long queue ensures that miners who eventually reach its front are ready to sign blocks at precise intervals. This technique ensures that blocks have little delay and therefore can have short spacings. As a result, transactions seem to be confirmed nearly instantaneously.

Beyond the mechanisms that provide a robust and responsive decentralized ledger, Steemit uses a voting-based reward system to incentivize content creation. Users create content and post it to the blockchain, generally through Steemit's website at https://steemit.com/. Then, other users read the content and have the opportunity approve or disapprove it, much like voting done at reddit or similar forums. To fund rewards, the Steem blockchain adds STEEM to a reward fund every block. In other words, block rewards are split between miners and the reward fund. The reward fund is eventually distributed to content creators based on approval of their content.

Importantly, voters are rewarded for approving posts that other voters also approve, creating an incentive-based system of checks-and-balances for moderators. A way to think of this system is a "proof of honest voting" where voters are provided strong incentive to reach consensus.

This innovative way to reward both content creation and voting consensus may solve two cardinal problems found with typical social media services. First, content creators are motivated to compete for rewards, keeping the quality of content extremely high. Second, voters are kept honest, potentially diminishing voting based on political or social agendas, and replacing it with voting that truly recognizes the quality of the content.