Change Steem Rewards? It's better to transition to a revenue model.

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I was reading @sirknight 's post on people saying author rewards should be reduced. Just seeing this, I wanted to suggest a different way of looking at the issue.

We have to be realistic, inflation and up-voting is not an ideal way to distribute community rewards...

Many (most?) people on Steem and in cryptocurrency have a bent toward classical libertarianism. Cryptocurrency seems to be ideally geared toward this mindset. As classical libertarians, we all know that inflation is a horrid way to get something done.

As Steem is presently structured, we are essentially running a non-profit organization that is funded on the backs of investors who buy Steem, and then are diluted through inflation to reward the community through upvotes. Now, it is a pretty 'fair' non-profit in the sense the people who own a higher stake of investment and are more subject to dilution, get a higher upvote to decide how funds are distributed from inflation.

In some ways I personally do not even see millionaires up-voting themselves as an issue. If someone who owns a million steem upvotes themselves 100%, while this may look bad, that person probably already lost way more than this amount through inflation. If everyone just upvoted themselves, it would just be a less inflationary decision of the stakeholders of the system, where dilution is going into the pockets of people being diluted. Yet a certain portion goes to fund Steemit Inc. and the witnesses, so even then, just to maintain operations there is an economic cost, and the tax is paid through an inflationary process.

Inflation is OK as a methodology for taxation, when the inflation amount is publicly stated, and controlled as it is on a blockchain such as this. Yet to make Steem really thrive, we need much more than just an inflationary model to fund the system. It would be like trying to become the next Facebook, while you are operating on a wikipedia business model of donations. Steem never needs to be as big as facebook to be a wild success, but the comparison here is valid. The point here is that most system rewards come from a basis of altruism not from a model of business profitability which is a win-win proposition.

Capitalistic Trade Favors a Win-Win Scenerio, But Steem runs on a Win-Lose Model

Steem running on inflation, funded by investors, is really a win-lose model in the long-run. It would be better to have rewards funded by economic value of content provided, either by advertising or other more creative revenue models, such as paid content.

Advertising?

The main issue with advertising as an alternative funding model is that Steem, while it has amazing Google traffic, it does not have the traffic of the media giants. There certainly is some meat in the pie, but how much? Some of my best Steemit posts for Google traffic, may have run into 10k views. 10k views on YouTube for my sector, might pay $20. Not amazing compared to inflationary curation rewards funded by investors. That said, I will circle back to Advertising at the end of this article.

Subscriptions

Having spent some time on Twitch, I think their business model might be extraordinarily suited for Steem / Steemit. The idea is that the Steem blockchain could be upgraded to permit subscription agreements between content creators, and content consumers. That the blockchain would permit a user to send a regular monthly, automatic payment to anyone they choose, something they could cancel anytime they choose. Such a payment could possibly even put a divy in for Steemit.com for adding more functionality to the website, so they have the revenue to support additional content provided. Next, I will list some things doable, either by Steemit.com or the Steem blockchain toward this end of having subscriber content:

Idea #1 - Encrypted Content Or an Info Block on Steemit.com

One idea would be to encrypt the content of a post, perhaps the last 75% of an article at the author's discretion. Then subscribers are given access keys via the blockchain, which their personal keys decrypt. This is the idea of sending encrypted messages on the blockchain; the encrypted message being a decrypt key for the article. This would have to be handled seamlessly to promote good user experience. Something like 10% of the subscription fees are paid to the managerial company for the subscription. The encryption method would not need to be perfect, because any subscriber could share the content, anyway... but it would just be a way for supporters to support the project. So even just blocking the content on the main portal could suffice, but since we're techy, an encrypted block would be far more cool.

Idea #2 - Bloggers are like Mini-Celebrities, if they are popular, so private communication chat/ect.

Subscribers could get access to unique ways of communication to bloggers, through the Steemit.com platform (chat, message board, ect.) Again, the subscription revenue would be shared with the managing corp (somehow) so that Steemit.com gets paid for hosting this.

Idea #3 - Subscribers get fun stuff, like badges, emotes, ect. People pay a fortune on Twitch, just for silly custom emotes!

This is pretty self explanatory. In the comment section (or chat supported in the future) Steemit.com could support custom emotes for subscribers.

Idea #4 - Integration with a live-stream and online video platform, I would suggest DTube integration.

Rather than treating promising enterprises as competition, we should maybe have a more expansive view of how to operate things as a total community. At the end of the day, Steem is operated by investors who vote in the best interest of the blockchain. Those investors have an incentive to see Steem succeed. Steem succeeding, involves more than just Steemit.com.

Investors should then encourage things like better integration of DTube into Steemit.com. I believe a mutually beneficial situation could arise where there could be revenue splitting between both enterprises for the video & livestreams done. If Steemit.com could be the portal for Dtube, with buttons on the top to just upload video & livestream links directly into the Steemit.com website at the top, (using Dtube on the backend), there could be an incentive for DTube to get way higher traffic count and revenue, but also to help Steemit.com add more functionality to the platform. The revenue for the managing corp would just need to be split appropriately between Steemit.com and DTube.

Idea #5 - Combined Advertising Bargaining

If Steemit.com combined efforts with other enterprises such as DTube, it could also make the platforms combine their future Advertising bargaining, by bringing in a larger viewer base for advertising dollars. DTube's integration could permit video ads and banner ads, while Steemit.com would be primarily banner ads.

Idea #6 - Advertising Subject to Authors

Due to the decentralized nature, and free speech nature of Steem, I would suggest all advertising be at the discretion of authors. An author might leave advertising turned off on their channel, but lose all advertising payments by doing so. This would be in-line with the foundations of what Steem has intended to provide.

Idea #7 - Steem Project Development, Crowdfunding Equity Management Platform

Steemit.com should work with, or as a separate project integrated with Steemit.com, develop a crowdfunding management system.

The idea here is that community member XYZ has a great idea to further the cause of Steem with new technology, but due to up-front costs may not be willing to go ahead with the idea. How and why are they going to do this? Crowdfunding would help incentive more development for Steem. Also, crowdfunding is remarkably suited for the Steem community. Reason 1) We know your reputation, and your history. How much I trust someone on Steemit often just boils down to their reputation rating, and what they've recently posted about. In many ways, there are people on Steem I can trust more than people I meet in real life, who could even show me proof of ID. Why? Associated with an identity on Steem is a track-record of behavior of an individual, which can be used to determine their personal reliability for things such as business investment. Reason 2) Steem is already a payment processing platform. Ultimately, the foundation of everything going on here is monetary. Reason 3) Steem can revolutionize the crowdfunding world like no other platform outside of blockchain technology can achieve. This could be done through user-issued crowdfunding vote tokens. Reason 4) Steemit.com has enough traffic to actually launch a crowdfunder portal, where as a 3rd party project with little promotion has every opportunity to fail or not be trusted.

Improved Crowdfunding with Voting tokens / shares?

With many crowdfunding situations, the people funding it are often subject to the projects going south and not delivering on goals. With blockchain, we could have project managers submit to the blockchain that XYZ was completed, and they are ready to receive an installment of funds for meeting a goal. Then the investors in the project could vote as to whether they believe the project manager delivered on promises, as to whether they release the funds. If they feel the project did not live up to what was promised, they could vote to remit the remaining funds back to shareholders, or they could vote to stall to see if improvement may occur.

Furthermore, if a third party arbiter was needed, blockchain could have one assigned in the original agreement, in case both sides are asserting something unfair is occurring.

The primary point, I believe, for crowdfunding on Steem (at first) would not be to fund-raise for charity, or develop pet-projects not related to Steem. Rather the primary goal at first should be to promote more technological development on the Steem platform.

By simply creating the portal, integrating it with Steem, it has sufficient interest and traffic to actually be something interesting, and since the primary point would be to develop steem tech, based on reputable community members, I think it might help everyone.

Just some of my thoughts, I get a lot of ideas. Maybe it'll cause some of you to think about what is possible.

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Anything that drives commercial activity outside of posting rewards helps Ted. SteemMonsters is one commercial initiative but there are others around.

Have you had a look at BetDice on EOS yet - this is what Steem misses. However I don't actually believe EOS to be a threat in the blockchain social media space - too expensive to transact. Users will need to invest $1,000 just to make 20 votes and comments a day.

SK.

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It's a really good point to raise. Where did you get the figures, though? Because I think they're wrong.

https://www.eosrp.io/#calc

The bandwidth needed for an upvote is small, and a person can issue 1 KB of bandwidth data to the chain at a cost of about 0.003 USD. I have found there is a lot of erroneous info out there about how EOS works. The ultimate test is when some other project goes live with an implementation, then we know for sure.

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I have been experimenting Ted and can tell you that <50 EOS staked as CPU doesn't get you many transactions before you hit the red line. This is already $US250+ - more than most would be willing to stake. I can also tell you that prices fluctuate. I am sure the prices will all come down in time though. But it does keep the headstart we have here at Steem going - and once SMTs are here - that's it.... no more competition.

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Interesting thoughts which some are probably being thought of already! I think that DApps will be what bring these models to the ecosystem to solve the distribution issue. The development of the Hivemind initiative and the deployment of Smart Media Tokens (SMTs) would allow for these thoughts to come to fruition. What is encouraging is that each project could deterrhow to distribute the rewards which provides an additional level of flexibility to Steem that if adopted and appreciated by the majority could ultimately filter to the main blockchain distribution. Regarding advertising, check out @dclick which are doing something interesting and also look at @fundition for crowdfunding although SMTs can do the same.

Some intetesting ideas here, I like the subscription model to unlock full content :)
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