When it comes to evaluating the strength of a blockchain (after you put aside technical discussions), what matters more, eventually, is the ecosystem that forms around a blockchain, the community that develops to support it.
In the public blockchain segment, bitcoin is known to have the strongest, if not the most expansive blockchain ecosystem. Ethereum is easily second in line, with over 300 distributed applications and an increasing number of startup companies opting to use its infrastructure.
If you continue this ranking using community and ecosystem as units of measure, Steem (via its flagship social site Steemit) is the best contender for the third-largest, blockchain ecosystem.
For background, Steem is the blockchain platform that powers Steemit, an incentivized social media publishing application. (Steemit is like social media sites you're familiar with, except that users earn real financial rewards for posting, participating and voting).
Actually, the Steem blockchain has already (automatically) dispensed $4m since its launch in March 2016 to thousands of its early adopters, and has caught the attention of the market due to the meteoric rise of its cryptocurrency, then subsequent fall back to initial levels.
For the sake of analogy, if Facebook was re-incarnated today, using Steem's philosophy, we would all get compensated for giving them our attention, which they have centrally and monopolistically monetized.
, a two-day conference held last week, was the first coming together of the Steem global community. It was the brainchild of Roeland Landegent, an Amsterdam-based software developer and event organizer.
In August, Roeland, an early Steemian (as Steem users are called) contacted Steemit's CEO and co-founder Ned Scott and proposed the idea for an in-person gathering, and the concept was embraced by Steemit Inc. Subsequently, Steemit Inc, along with other sponsors, agreed to fund the event to make ticket prices affordable, while keeping the quality of the event logistics high.
I was one of 35 speakers at that event, and witnessed the variety, vibrancy, excitement and eclectic composition of the 206 attendees who came from an impressive mix of 31 countries, representing Austria, Belarus, Belgium, Bulgaria, Brazil, Canada, China, Denmark, France, Germany, Greece, Hungary, Indonesia, Ireland, India, Japan, Malaysia, Mexico, Norway, the Netherlands, Lithuania, Panama, Peru, Poland, Romania, Russia, Spain, Sweden, Thailand, the UK and the US.
Many of the attendees paid for their travel using Steem dollars they had earned on the platform, As a bonus, each attendee received a number of Steem Power as a reward for attending. Furthermore, a fund was made available to reimburse attendees in financial need. One small exhibit area featured Maurice Mikkers, a "tear catcher" who photographs your tear via a special microscope in high resolution for 25 SBD (Steem-backed dollars).
These were just a handful of the real examples that demonstrated the usefulness of Steem as a currency that crosses from the online to the real world.
Two other demographics stats impressed me: about 25% of the audience were developers, and a good 35% of the total attendees were women.
Those two numbers are significant because they fly in the opposite direction of what you typically see in blockchain conferences that are filled with generally male developers. The non-developer segment speaks to the fact that many Steem users don't even have knowledge of the blockchain in the background.
Just like the SteemFest attendees, the speakers and topics were eclectic.
Presentations ranged from a "State of the Steem Nation" address by Ned Scott to a talk by eight-time New York Times best-selling author Neil Strauss on his Steemit experience.
Elsewhere, Steemit superstar Heidi, known as @heiditravels, spoke about how she is now able to fund her world travels from Steem earnings. There was also a coding on Steem tutorial; a developer’s roundtable; and discussions relating to Steem’s governance model.
Videos from 17 of the presentations from the main hall (there were two tracks) are available here. Both tracks were live-streamed during the event and garnered 1,000 viewers during the Saturday.
Some consider Steemit to be a live experiment, and if it is so, it carries with it several best practices and lessons. Instead of reporting on the content of the presentations, I will enumerate some lessons for other blockchain ecosystems, with Steem as an example:
- The ecosystem is a measure of strength. An ecosystem is typically an outcome that results from finding a community that embraces your technology, and is not dictated top down. Bitcoin has experienced it. Ethereum has thrived on it. Steem is currently doing it.
- Number of blockchain applications is key. Blockchains need to showcase the level of innovation that is forming around their technology. For Steem, Steemtools is a repository of about 100 Steem-related applications and useful tools. It is a good display of creativity and innovation around the Steem blockchain and Steemit. Some of the promising applications include a marketplace, a magazine and a decentralized publishing application.
- Users may not care or know there is a blockchain. A blockchain’s main purpose is to maintain integrity of transactions, ensure there is no double-spending, provide value flow and continue to care for the needs of its community. End-users in Steemit drive the value and engagement with the platform, not the technologists behind it.
- Tokens must provide a needed utility. A real linkage between tokens and the business is not to be underestimated. In the case of Steemit, the currency is part and parcel of its operations. Every user click, vote, comment or published content is tracked and monetized. It is not possible to game the system or easily cause unnatural user behavior.
- Work translates to value. Upfront investment is needed. Some people invest their money. Others invest their time. Both have returns, but you must invest something. Steem users that invested their time in publishing, upvoting or commenting on other content are rewarded. It’s the ultimate work-to-value translation.
- Governance can evolve. No blockchain is perfect at launch time, just as no product is ideal at its initial launch. Bitcoin, ethereum and other blockchains have experienced their share of hard or soft forks, on the road to continued evolution. Steem is no different, and they will be iterating on their incentive model based on a proposal that was the result of user feedback and discussions at Steemfest.
- Transparency is key. A public blockchain is almost like a public company. Ongoing transparency is paramount. Almost everything related to Steemit is openly available. They have publicly shared their usage metrics – a few of which are: 110,000 registered users, 25,000 daily readers (4,000 of which actively participate), close to 3,000 posts published daily, with an average of 35 actions on each, all of them recorded on the blockchain, resulting in over 1 transaction per second. Some of the applications in Steemtools use their API to pull further insights from Steemit.
- Network effects are important. You can’t escape the beneficial laws of network effects when building a blockchain ecosystem or application. Each new user benefits all others via their participation, therefore increasing Steem’s value for all participants, and enabling that value to get propagated on the very network that was inherently created.
SteemFest was an essential reality check on the status of the Steem ecosystem, but every blockchain, decentralized application or decentralized protocol owes it to their community to think about their own "fest" as a living display that brings together its ecosystem and showcase its life.
In an ironic twist, that might be the only central artifact in an otherwise very decentralized phenomenon.
Disclosure: The author holds value in bitcoin, classic ether, ether and steem.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.