Steemit Crosses 800K Users! What Does That Really Mean?
There's a sense of euphoria on Steemit about growing number of users. I don't want to be the Grinch of the party, but I'm not that enthusiastic about the growing user numbers.
@cryptoriddler has written a post about the user numbers exceeding 800K. I've already commented their post and they were kind enough to provide us with more numbers. So, I think the growing number of users issue is worth a post, because I see more and more people writing about it.
Are 800K+ Accounts Good News for Steemit?
In order to answer that question, I want to ask two questions.
- How many of those 800K accounts are retained as daily, weekly active users?
- How many of them turn into investors?
How many of those 800K accounts are retained as daily, weekly active users?
@cryptoriddler provided the following numbers as a response to my question.
from a post by @cryptoriddler
As I have written in my response, the only two meaningful numbers on that table are the daily and weekly. Unfortunately, the rest of the figures shows how low the retention rate is.
Moreover, the numbers on that table contain two figures that we need to ignore.
- People who have just signed up and who will give up on Steemit after 30 days.
- Automated accounts, such as bots.
There's a way to filter people who have just signed up. If we count only people who have signed up at least 30 days ago and were active on Steemit in the last 7 days, that would give us a better picture.
How many of them turn into investors?
Let's assume that all of these accounts are humans and Steemit will be able to retain a significant portion of them.
What is the motivation of these new accounts?
- Do they want to invest their time, effort, and/or money to the platform in order to add value to it and eventually profit from their investments in the long term?
- Or do they flock to Steemit with the expectation of a quick buck?
I'm not going to answer that question. I leave it up to you to answer that question. When you answer that question, also think about the consequences of that motivation on Steemit.
Do more users mean higher Steem price?
More users mean higher share prices for "traditional" Internet companies, because you either sell more subscriptions or more advertisement. Both options are not applicable to Steemit. That means the number of users doesn't have much of an impact on the Steem price.
A higher Steem price is only possible when investors see an investment opportunity. Personally, I don't see that opportunity in Steemit's current form.
When I look at the Steem price in Bitcoin, I see that other investors share my view. I'm not bothered about the Steem price in fiat and I explained that in a previous post.
Steem 1 year price chart in Bitcoin from coinmarketcap.com
Actually, increasing number of users who want a share from the reward pool is bad news for the existing users as their share will diminish since the Steem price doesn't increase.
So, I have a difficult time understanding the euphoria among some users who try to earn money on Steemit.
What would attract investors to Steem?
Let me invert that question.
What wouldn't push investors away from Steem?
At the moment, 6% of the yearly inflation is paid to the authors and curators. When I look at the trending and hot tabs, I don't see content that is worth $50+ Million USD a year. That keeps me back from investing more into Steem.
When I propose replacing the reward system with a tipping system, I get the feedback that, in that case, investors wouldn't tip. In the current system, they don't invest. The effect is the same.
Investors aren't the fools that many Steemians think they are. They know what it means to invest in Steem. If they wouldn't tip on the posts on the trending and hot tabs, they wouldn't buy the Steem token in the current system, because the effect on their portfolio is the same.
Conclusion
If you want to save Steemit, attract investors, and help it reach its potential, you need to get rid of the author and curator rewards.
Moreover, you need to create a system that feeds relevant content to users just like YouTube and other social media apps. And let investors tip on that content, on their own discretion.
Investors aren't idiots. They know that in order to make more profits on their Steem compared to on Bitcoin, they need to have great content on Steemit. They will tip if you give that content to them. They know that would motivate more producers to create more high quality content on Steemit.
Disclosure and Disclaimer
At the moment of writing this post, I owned Steem Power. This post is for information purposes only and not intended to be investment advice.
I don't agree that they should do it like YouTube. I totally agree to the rest. In my opinion the frontend is a major problem. You just don't find the content your interested in. And it's hard to see through for new users. And Interaction is still difficult. Why do we need discord for chatting? Steemit could be much greater than it is right now. At the moment it scares away new users and investors. 800K sounds great. But not when people leave again after a couple of days.
What do you not like on YouTube?
I gave it as an example. Whenever I go to the homepage of their app, there are dozens of videos I’d like to watch. At the end of each video, there are a dozen of related videos, I’d like to continue watching. I have to make a conscious effort to not spend too much time there. It is the complete opposite on Steemit. Here I have to make a lot of effort to find something interesting to read.
If you don’t like YouTube, take Medium as an example. They also feed you with dozens of relevant posts. There are way more bookmarked posts on my Medium account than I have time to read. The complete opposite problem compared to Steemit.
Ah. I guess I got you wrong. I thought you would mean, that they should do some kind of sorting what's quality and what's not. I should have known, you don't mean this, because it's the idea that the users do this. You mean something like a "you may also like..."-section. That's indeed a good idea!
There are only 70k daily active Steemit users. We still have a long way to reach Facebook's userbase. I think that as more people join Steemit,most of them will biy at least a few STEEM to power up. If not their content will be hardly visible beside their circle of friends. Unless they produce really high quality content that gets noticed by a whale.
That's a logical way to think about if those new users lived in developed countries. The question is how many of them come from developing countries where even $3 USD is a lot of money and a few Steems they can make here is a significant contribution to their budget. My gut feeling is that a good deal of them fall into that category. I don't have any evidence though. But the Steem price makes me think like that.
There is nothing wrong if they change that Steem into USD. They are producing some sell pressure that is understandable,but I think investors and believers in the platform will overpass them by far as they will hodl that Steem as power.
Ok, I see what you mean, but I'm not as optimistic as the second half of your comment.
Hi. I’m one of the new guys.
I stayed on the outside for quite a while up until I discovered Dtube. At that point I decided that I needed to give it a try.
I won’t lie. The main reason that pushed me to join is the hope to be able to earn with with my content.
Of course the content needs to be good. That goes without saying and I believe that in the long run good content will always prevale. Especially in this space.
I believe that the rewards system is what enables Steem to really be different. If you were to change that, then it would be a kind of mash up between reddit and patreon. Don’t you think?
Anyway. I’m new but I’m here to be a part of this community. Even though I know that your opinion on the herd that is coming is probably right : )
Thank you for your honesty. If your content is good and adds value to the platform, it deserves to be rewarded. No need to be ashamed of that.
Some people are investors. Some people are producers. Some people are both. Steemit needs all of that.
Yes, Steemit is different, but how sustainable is it?
That's a good analogy. Thank you for that. Steemit would add to the mix the decentralization and the cryptocurrency aspect. That would be a killer product!
Thank you for your contribution and welcome to the club!
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