The Economics Of Steemit

I love economics. I LOVE economics. When I first joined Reddit a long time ago I thought, wow, this is pretty cool.... but it would be infinitely cooler if voting was replaced with spending. Why would it be so much cooler? To put it as simply as possible... actions speak louder than words.

actions > words

actions = spending
words = voting

spending > voting

So today I'm browsing around Medium and I decide to read this story ... App Coins and the dawn of the Decentralized Business Model by Fred Ehrsam. Here's the part that really caught my attention...

Steem, a decentralized Reddit where people are paid to contribute news and content.

And I got super excited because I instantly imagined that Steem was just like Reddit but with spending rather than voting. To be honest though... I've never been exactly thrilled by bitcoin. But this only marginally diminished my enthusiasm.

When I visited the Steem website I could see that the stories had dollar amounts next to them! So so so cool! I was a bit surprised though that the amounts seemed kinda large. But I logically concluded that the stories must be pretty valuable.

After jumping through way too many hoops... I finally managed to join the website. I noticed that the stories seemed to be sorted by their value... but then up at the top there was a drop down menu that said "Trending". Well... which one was it? Was it trending... or value? I clicked on the menu to see the other options... and none of them said "value". I saw "Popular" and clicked on it and could see that the stories were sorted by votes. Yeah, that's right. Voting reflects popularity.... not value.

I decided to search for stories about economics. Well... tried to search. Somehow I could only "search" by tag... and evidently "Economics" wasn't one of them. So I clicked on the "Politics" tag and near the top of the list was a story about anarcho-captialism that looked kinda interesting. I clicked on it and it wasn't half bad but, unfortunately, I can't seem to find it again. Anyways, after I finished reading the story I scrolled down a bit expecting to see some coin buttons above the comments. I figured for the heck of it that I'd click the 1 cent button a couple of times and see what happened. I was under the impression that some money had been deposited into my wallet when I joined.

I looked around under the story but I didn't see any coin buttons. When I looked closer at the story's dollar amount... I noticed the ^ button to the left of it. I hovered my mouse over it and the tooltip text appeared and said "Upvote". "Upvote"??? "Upvote"?!!!!!!!!!!!!!! Ughhhhh!!!!

Expectations > Reality

How is a story's dollar amount determined? I don't know. But I know how it is NOT determined. It is NOT determined by me and other readers. Or, it is NOT directly determined by me and other readers. Why is that? Is it because there's some technical aspect of bitcoin (or whatever this is) that would not allow for a story's value to be directly determined by the spending decisions of readers? Or is it simply because the creators of this website didn't think to consult an economist? Or maybe they consulted a crap economist? There are certainly plenty of those.

Let me try and put the problem as succinctly as possible... Right now I don't know which story on this website is the most valuable

This is exactly the same problem that Reddit, and Medium, and all the other similar websites have. None of these sites put their most valuable content up front. They can't! Why can't they? Because they don't know the actual value of their content. None of these websites give their readers the opportunity to use their cash to communicate just how much they value a story. I sure hoped that Steem would be the first exception.... but nope.

So here I am... feeling like I've been really robbed. Like, I was just about to have the most amazing sex dream ever but then Jennifer Connelly was replaced by Nancy Grace.

If you're here then you probably don't mind having sex with Nancy Grace. Or, you don't realize that you're having sex with Nancy Grace. I'm used to having sex with Nancy Grace but it sure doesn't mean that I like it. At least not that much.

Well... while I'm here... I might as well tell you how this should work. When you join this website there should be 5 cents already in your wallet. Real cents. Not fake cents. You could search for "economics" and the results would be sorted by their value. The story at the top of the list would be the most valuable story. If you read it, and valued it, then you could let other people know exactly how much you valued it.

Underneath the story would be some coin buttons... 1 cent, 5 cents, 10 cents, 25 cents and 50 cents. If you clicked the 1 cent button... one penny would fly across the screen from your wallet in the upper right hand side of the page over to the story's value. So your wallet would decrease by a penny and the story's value would increase by a penny. Which means that the author's wallet would increase by a penny. The owners of this website would get their very reasonable and fair cut when people cashed out.

Once you valued the story... your username would appear beneath the story along with all the other people who valued the story. Next to each username it would display exactly how much the user values the story. The list would be sorted by value. So you would quickly and easily see who values the story the most.

Let's say that SamanthaSunshine values the story the most. You could click on her username in order to see her page. On her page you would see all the stories she values sorted by her valuation. So you would quickly and easily see which story she values the most. There would also be a recent activity tab where you could see her recent valuations. There would also be a tab where you could see her stories sorted by their value. So you could quickly and easily see her most valuable story.

Voila! There you go! I imagine that it would be exactly like having sex with Jennifer Connelly.