About a year ago, in the middle of the Reddit soap opera that played out last summer, I wrote a post about how someone could (and would) build something like Reddit on the blockchain.
A number of developers and entrepreneurs have done that and the one that has garnered the most interest is called Steem.
The community is still small and the links are still a bit all over the place. But things are happening at Steem and I think its worth paying attention to.
At the heart of Steem is a tipping system, called Steem Power, based on a crypto-currency called Steem. All of this runs on the Steem Blockchain.
Readers can buy Steem Power with Bitcoin and then they can tip posters who receive Steem Power. Steem Power can be converted into Steem through a mechanism I don’t really understand to be honest.
So unlike Reddit, where posters receive no compensation other than upvotes, on Steem upvotes are done with money.
Steem is traded like other crypto-currencies, and currently has a market cap of $287mm. That feels a little bit ahead of itself (Reddit was valued at $500mm a couple years ago), but markets go up and they go down. We will see where the Steem market cap goes from here.
Another thing that is interesting about this whole model is that Steem can finance itself, the cost of its team, an office, bandwidth, servers, etc by selling Steem vs selling equity.
This is the Decentralized Autonomous Organization model that many blockchain entrepreneurs are following today.
So if you like the idea of Steem, and want to back this company, all you have to do is buy some Steem, some of which you might be buying from the Company. And if you change your mind, you can sell your Steem and move on.
I think Steem is a really interesting experiment that may turn into a really nice business. The Steem founders are experimenting in multiple dimensions at the same time. They are trying a “paid” model vs a “free” model for curating a content discovery engine. That’s interesting. They are using blockchain technology vs some centralized system to build all of this. That’s interesting. They could finance this business via their users vs VC or something else. That’s interesting. And their users can participate in the value creation, if this turns out to be valuable. And that is interesting.
I am rooting for Steem. They have some things to get right and watch out for (including the rapid rise in the value of Steem which is concerning) and I hope they take steps to avoid the “dollar/hype cycle” I talked about in this post. That is one of the great challenges with this whole DAO model of starting and building a company. But someone is going to figure this out. The Steem founders have already figured out a few things which I am sure others will now emulate. And that is what is great about experiments, even if they fail. We learn something. And when they are done in public more of us learn something.