Tuesday, March 14, 2017

Hedging on a transition

For the past few weeks, I've been working against competing demands for my blogging time. Besides the normal demands like work, family and a really cold basement where my computer happens to rest, something else has come to the fore: Steemit.

If you follow me on Google+, Facebook and Twitter, you may have noticed an occasional post regarding my efforts at Steemit. I'm just learning about it and I find it a fascinating venture. Steemit is yet another blogging platform but with one big difference. It pays to write on Steemit. From blogging to comments, to following and being followed, Steemit is an attempt to capture the value of social media interaction on a blogging platform and return at least some of it to the users.

Here is where it gets interesting. Every interaction is captured in a distributed transaction record called a blockchain. A blockchain is a database with encryption that is used to verify each transaction and store it so that every transaction can be verified against another. It is distributed across many peer computers for redundancy, security and speed. Computational effort generates value in the form of Steem, a cryptocurrency very much like Bitcoin.

I've been working out the logistics and am close to the point of letting Blogger go for awhile to give me time to try this out full time, that is, for all the time that I have available to blog, I will post there. I'll keep my day job, but when I'm blogging, I'll be doing it there, on Steemit. I want to see what a full effort there can do.

Steemit is still in beta, that is, they're still testing it. Few people really know that it exists, but it's there and so far, I like what I see. I will miss the integration with Google+ to be sure, but I won't miss the tremendous efforts required just to pull a few cents out of it. Don't get me wrong. I have a passion for writing and a passion for a cause. I'd like to be able to pursue those two passions and still pay the bills.

I'm grown to love Blogger. It's simple, easy to use and integrates well with Google+. When I post my articles on Google+ the comments received show up on my blog for others to read, too. That is a feature I really like that allows me to track comments wherever I happen to post the article on Google+.

Then again, I post articles on Facebook and Twitter and really don't have any integration from there. So there isn't much lost going from Blogger to Steemit. I can still link Mailchimp to my blog on Steemit, too.

Relative to Blogger, Steemit seems to be very good at generating value for content produced. Steemit also allows for upvoting of posts like Reddit. But that costs Steem Power, a sort of influence token. It gets more complicated from there and I'm planning on spending a lot more time there just to make myself familiar with it. All I can say for sure is that I'm optimistic about Steemit and I also see that Steemit is not the only social media site using cryptocurrency to pay their users. There are already a couple more to follow Steemit.

Steemit is attempting to do something that Facebook, Google+, Twitter and a few other social media sites have so far refused to do: pay their content creators for their work, and except for Google+, they show ads at the same time. There are no ads on Steemit, at least not now. Maybe not ever. The investors who created Steemit seem to think that content creators should be paid for their work. They have a business model that I'm still learning about it, but from what I can see, ad support is not an obvious consideration.

There is something else that I like about Steemit which, I think portends of the future: people will find ways to earn a basic income from something they are already doing. It is possible that in the long term future, say, 10-15 years, much of the routine labor will be automated. Trucks will drive themselves. Trains will drive themselves. Robots will stock shelves and pick produce. It is possible for this to happen, but it's not happening yet. Steemit could be an acknowledgement that we need to prepare for that eventual future. The future envisioned by Piers Anthony in the Blue Adept may not be so far off.

Billions of people are engaged in social media. Steemit is pioneering a way to channel that energy into blockchain computing. With Bitcoin, you can buy rigs and run software to mine Bitcoin. Blocks on Bitcoin are created by sheer computational power. In a way, such systems are minting money.

Steem generates blocks on the blockchain by a more familiar user interface, a social media network, something that billions are already doing now. The more content you created the more you earn, based on the votes you receive. The transition from social media networks familiar to us now to a social media network that actually pays their users for content would not be that hard to make.

I can even see these pioneers like Steemit pulling the old dogs along. I suggest that the appeal of a blogging and/or social media platform that pays for content will eventually be impossible to ignore. If Steemit proves to be successful, others will have to follow or lose their users and their revenue sources: the users. Ultimately, the users generate the value and they are the revenue source that social media relies upon. I see no reason they should not be paid.

Going even one step further, it is no secret that central banks have been rigging national economies. What appears to be not very well known is who benefits from this manipulation. I can recall in the days when I used to watch TV, and I mean broadcast TV, how the markets would go nuts when interest rates were raised or lowered. The Federal Reserve Bank is our central bank. They control the interest rates in America. When they raise rates, millions are thrown out of work, and stock markets rally. That seems like a good clue as to who benefits from the way our central bank works.

Cryptocurrencies have no central bank. There are hundreds of them, all competing for your use. The more people use a cryptocurrency, the more valuable that currency becomes. Most can be traded for traditional currency like the dollar and the Euro. There are now exchanges (like this one) that allow for purchase and trading of cryptocurrencies, much like any other security or commodity. And they're growing.

Bitcoin started out small. As developers built the software to exchange Bitcoin, businesses started to see value in using Bitcoin as a medium of exchange. It's still very tiny relative to the worldwide economy, but it's there. Checking on the prices today, Bitcoin is now on par with gold. Gold is selling for $1,204 per ounce. Bitcoin is now at $1,250 per coin. I can recall one story that I saw on Steemit that tells of a man who bought $27 of Bitcoin, forgot about it for a few years and found out that his investment had appreciated to $889k. The growth is there, but can ordinary people use it? I think so.

Bitcoin is now big enough that governments can no longer ignore it. All power derives from the people. It doesn't matter what form of government you want to call it, all power still derives from the people. When the people get tired of being manipulated by the banks, it is natural for them to seek alternatives. Cryptocurrencies are that alternative until a better one comes along.

Cryptocurrencies rely upon computational power to generate value. Through personal computing, this power is distributed to everyone who has a computer. Compared to traditional central banks, cryptocurrencies are fairly democratic and not easily prone to abuse by central banks run by governments. Perhaps through a union of social media and cryptocurrencies, the people can finally gain control of the governments that claim to represent them. If not, they may have to form new governments that provide the representation they seek for their mutual benefit.

I'd say there is a peaceful revolution in process now. Most of us just don't know it yet.

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