Authors make money on steemit by creating content and having others upvote it, a like = $ in the Steem economy. Dead simple formula, no gimmicks, but a lot of conditionals. The worth of a user’s upvote is proportional to their Steem Power (vested shares in Steem received through payouts or converting your Steem into Steem Power). Which means upvotes from new users aren’t worth diddly squat. And if users don’t create content that gets noticed, or invest their dollars into Steem, their upvote is doomed to the sub one cent zone.
As of now the upvotes are mostly coming from other authors, curators, or investors in Steem. It isn’t a platform where pure content consumers (much of social media's user base) have much value or sway in the system. This is a huge oversight, and if not remedied it will prevent the best content creators from being as successful as they are on ad based platforms. A user, unless he/she purchases Steem, that isn’t regularly contributing content and building a following will have a minuscule upvote. On the surface, there’s little incentive for them to invest in the platform. Most won’t make the effort to understand the platform and invest and will go inactive within a few months.
TLDR:
- While we should expect authors to contribute quality content, not everyone is an author. Forcing the non creators to contribute in hopes of succeeding will just flood Steem with a ton of subpar content.
- Established authors need to invest immediately in Steem and heavily reward engagement. This will boost their user base’s total voting potential and create a better environment for all creators.
Upvotes it takes to reach $266 a post
($200 would be the author payout and is a decent wage for a full time creator in the US)
| SP | $4/Steem | $10/Steem | $100/Steem |
|---|---|---|---|
| 15 | 50,000 | 20,000 | 2,000 |
| 100 | 7,500 | 3,000 | 300 |
| 250 | 3,000 | 1,200 | 120 |
| 1,000 | 750 | 300 | 30 |
| 5,000 | 150 | 60 | 6 |
Since the majority of users are floating in the 15 SP range it would be next to impossible for an author to live off of the Steem wages in the current climate. 50,000 roughly accounts for the total daily active users. It's a pipe dream right now for anyone but those who've gained the autovoting from whales to make a living on Steem. Especially the content creators who have overhead. Getting more users in the 100 range makes a lot more possible. And this should be our goal.
What Type of Steemian are you?
In order to understand how to do this, we need to identify the types of users on Steem, and understand how they achieve growth. There are 3 core Steemian “builds” for users on the platform.
- creator
- consumer
- curator
I believe every user can have a primary build, and a secondary build. It's important to define which build you fall into to better your focus and understand the types of users your success depends on.
Pure Creator
You spend so much time creating you have very little left for reading on Steemit. You post 6-14 times a week and engage heavily with your readers. Most of your upvotes go to replies on your posts and you support your readers as they support you.
Creator Consumer
Your main goal is to create content, but you are also looking to learn, connect, and share ideas with other content creators. You post 2-4 times a week and read and engage pretty heavily. Most of your upvotes go to other author’s posts and not replies to your own.
Creator Curator
You’ve been on Steem for some time and have built a following of over 1,000 users and have over 500sp. You post regularly 2-4 times a week and moderate or run 1 or more Steemit communities. You enjoy supporting new authors and finding quality content to share with your followers and resteem 3-10 articles a day. You may also curate for curie, or other large curation accounts.
Pure Consumer
You have no interest in posting anything beyond photos or memes, and spend most of your time on Steem reading and finding authors that interest you. You most likely found Steemit because a blogger or vlogger you follow joined and recommended it. You love to engage with authors and their readers in the comment threads. You have no interest in building a following or curating content, but want to be able to support the creators you feel are doing great work.
Consumer Creator
Your primary goal on Steemit is to find great content, but you enjoy writing and being part of a community. You post 1-3 times a week, but most of your time is spent in comment threads and discord.
Consumer Curator
You have a knack for finding good content. You are always searching for up and coming authors and love supporting the growth of Steem as you’ve invested quite a bit of money to power up. You don’t post but you’ve amassed a large amount of followers through your top notch resteems.
Pure Curator
You have gotten delegations or have invested and have over 5,000 SP. You have a desire to support the platform and to help minnows succeed. You spend all of your time on Steemit looking for great articles upvoting and resteeming.
Curator Creator
You have at least 1,000SP and quite a few followers. You’ve gained your followers through building community, supporting authors, and creating community focused content. You run a lot of contests and challenges and enjoy promoting and highlighting authors
Curator Consumer
You curate because you love quality content. You read on a wide variety of subjects and engage with authors from a genuine interest. You don’t post much but resteem and comment heavily. You’ve gained your following and SP through grinding in the comments section and quality resteems.
Path to Success
For the creators, the formula is rather simple. Make great content, connect with communities, get curated, build a following and get some dolphins to follow you. But it’s much more difficult for the pure consumers and pure curators.
Pure curators can only be profitable if they have high SP and a large following. Renting delegations is a terrible method to get there and will only act as a money funneling scheme to enrich the whales at the top. Instead, the whales should be looking to delegate to quality curation accounts who are supporting the growth of the various Steem communities. The curation accounts are essential to a healthy Steem economy and the value of the Steem token.
The missing Piece
If the culture and mindset don't change on Steem, the pure consumers will continue to have little worth in the system. Most have no idea how the system works and usually join for the promises of making money from posting, “Post and get paid for good content". They join and treat Steemit like its Facebook, and fail to achieve much. These users are falling through the gaps, and building a path to success for them is a missing piece of the formula for Steem's domination.
Right now we have roughly 60,000 daily active users. With the majority of those having sub $0.01 upvotes. To illustrate how this affects the Steem economy, let’s look at the following example.
A major YouTuber with 1,000,000 followers joins steemit and gets 10,000 of her users to join and follow her. Each of those users will only have $0.004 upvote initially. About a quarter of them actively upvote every post, which gives her a small $10 per post. This is probably a far cry from what she would expect, but she knows she just started and believes in the potential of Steem. So she continues investing her time in Steemit. Eventually she grabs the attention of 10 dolphins who increase her payouts on average by $10. Great, now she is making $20, but to begin to make it worth her time, she’ll need at least $100 on every post. With only so many established users to pull from, the reward pool begins to thin out and reaching her goals seems impossible. The users she brought on board fail to find their way through Steem and many eventually go inactive.
Solving the Pure Consumer dilemma
In order for creators to see this as a viable platform, the consumers need to build their SP. I see 2 possible paths for achieving this.
1. Pure content creators use their voting power to reward replies to their content.
While one creator may not be able to make a difference, if a large portion of creators start doing this it will have a noticeable effect on all of their payouts and create a more hospitable environment for creators to thrive in.
Let’s explore an example. Johnny just joined Steemit and has no interest in creating content or investing in Steem. But he is very engaged with the 10 creators that he follows, upvoting and leaving comments on all of their posts daily. Let’s say every one of those 10 authors has high SP and rewards their readers for engagement, so he averages $0.75 from each of them a day which brings him in $52.5 in rewards a week. Within 10 weeks he’ll have over 100 SP and have an upvote of $0.02 - 0.5 (if he doesn’t cash out his SBD). By the end of the year he would have around 650 SP and his upvote would be worth around $0.20-$0.40. By reading and engaging he’s able to pull in $2,600 of value a year, that’s pretty incredible considering he simply did what he was doing on YouTube, Facebook, and Twitter already.
Having 100 of these loyal followers will bring a creator $40 a post. It would take 10,000 upvotes from new users to achieve that. The more content creators invest in Steem and reward their readers, the more they all benefit as it creates a healthy base of engaged users with meaningful SP.
2. Instead of using Patreon to support content creators, content consumers can invest in Steem and support them with an upvote.
A donation in patreon only goes so far. An investment in Steem benefits the user, the creator and everyone else on the platform.
100 SP is worth $400 and will give you around a $0.03 upvote, at the time of writing. In 3 years 100 SP may be worth $10,000 and give a $0.75 upvote. That means the user will be able to distribute over $50.00 a week in rewards without having to spend any money from his/her pocket, and he/she has turned $400 into $10,000. Obviously this increase in Steem is speculation, but if we can solve the pure consumer dilemma I’m sure we will see Steem much higher than $100.
The big Experiment
Perhaps Steem wasn’t meant to support a full blown content creator economy like youtube has done. Perhaps the monetary gain is just meant as an incentive mechanism to moderate the culture. Maybe the payouts will always be looked at as a bonus and not a goal. But I personally believe Steem can achieve so much more and potentially replace the ad funded content creation of YouTube and Co. In order to do this though, the Steem price will need to reach $100, and there will need to be a user base of a few million content consumers that can provide a $0.05 - $0.50 upvote. I believe this is possible, but we'll need to work on the distributions, on boarding, and culture here to get there.
Photo by Elijah Hail on Unsplash
Very nice and clear description! I especially like your realistic view at the rewards as a bonus and not the main reason for being here on Steemit. It´s simply not sustainable to lure people in just with big potential payouts.
Yeah, at the moment it can’t sustain creators. Like other’s have stated, it wasn’t originally designed for this. But the rules have changed, with the original inflation rules, the value would have never risen past $1. But now it has the potential to sky rocket, which is going to allow new things to happen on Steem. I think we should stop limiting it based on the original intent. When this was first being developed the censorship and demobilization of YouTube and co hadn’t hit yet. But now there’s a need. It’s goimg to be at least another year or two before other block chain inventions come up with a solution. But we can have one right here, right now, if people realize the potential.
Indeed! Even if Dan is producing some kind of social network on EOS, it will take 1-2 years before it will reach any level of productivity. We need to use this first mover advantage well, to not become the MySpace of the blockchain area.
Xactly 😎 I think any other social network will take at least 1 to 2 years to launch after EOS. And then it would take another year to iron out all of its economics. If all goes well here on Steem, by that time Steem could be near $100 and full time Steeming would be totally viable. It’s really up to the community where this goes. I don’t think I’ve been a part of something so dependent on its members. A great experiment indeed.
Thank you for this insightful look at steemit, it answered a lot of questions I had myself. The thing I see is that if you invest in steem power your blog will do well. As an artist I’m trying to start from ground zero.
I really like your illustration style. I think you'll do well. Did you do an introduction post with the #introduceyourself tag? That helps getting noticed early and getting some followers. The key for new content creators is getting involved with a community that can give them exposure. Also getting a curie, blocktrades, or similar upvote will shoot your rep and account value up pretty fast. Followed.
@theferalone thanks again, now I'm really excited to get going with Steemit. Its been 3 days now and I am enjoying everything about the platform. Will be looking forward to your posts ;)
Imagining when the amount of active users has increased tenfold! I'm deep in minnow world and dreaming of when I can invest. In the mean time I'm amazed at getting a few cents worth on a comment or post. I'm hoping that by the time I'm ready to really sell the Idea of Steemit to my friends and encourage them to join and participate that I'll be in a position to support them a little better.... And also that the wait time to get in is decreased. I've had a couple friends totally lose interest cuz they had to wait to participate. Let's hope we can get them back.
This answered a lot questions I have been wondering about. Thanks for posting.
Again, you amaze me with well-analyzed problem descriptions, some good thoughts on solutions and in general awesome content. Upvoted/resteemed.
The role of the strict consumer is not an oversight. The original whitepaper lays it out. Steemit is simply a platform that demonstrates the transaction capacity of the Steem blockchain. Everything that anyone does is a transaction -- post, upvote, comment, etc. The reward pool exists to encourage people to do transactions of one kind or another. In the most simple conception, that's all that's going on here.
But the addition of the Steemit social platform on top of the Steem blockchain did allow unexpected things to happen that could test the blockchain -- scammers, hackers, bots, and more -- and the community could figure out how to deal with them. Other, good, unexpected things could happen, too, as people get to know each other and understand the power of the blockchain. Like utopian.io - nobody saw that coming and it's a big deal. As a social platform, Steemit is also a gateway to cryptocurrency for the average person.
But there was an early appreciation that Steemit is not likely to be the application that ultimately drives the value of Steem upwards. Nobody knows what that application is -- although the SMTs may be it, as they propagate out beyond Steemit.
So the strict consumer doesn't even matter for that bigger picture. The view is that people that are not vested much in the success of Steemit should not have that much effect on what goes on. And the way to become vested is to either invest capital or invest work -- posting, commenting, and community building. People can do well on Steemit by commenting a lot. For folks that don't want to post blogs, commenting is the fastest, easiest way to get SP. Or enter contests -- some are just rolling dice, lol.
Yep. That was my general conclusion. I think Steemit and other Steem apps have the ability to grow beyond the original creators’ vision. And I think success for the consumers boils down to commenting or investing to support authors. But the authors need to support their readers in turn.
Hey,
thank you for making the structure bit more clear for me!!
It seems a bit like I have to make a decision which category which type of steemian I want to be. ;D
For me thats not possible, I just do it like I feel. ;) And it totally depends on my time!!! Probably after a while it will be clear by itself.. so i am curious which type I am! ;D
Thank you!!! :D
What a good analysis!
These days I am mostly concerned about the good and honest content. I think that Steemit should be a place both for experienced writers, and the beginners who are still to learn. However there is lots of google-translated content, or content written just in rush, made by people who invested a lot in steem. Those people usually get followers who are there just to upvote them in the right moment to get curation rewards. Idk how this can be solved really, since the main purpose of Steemit shouldn't be just earning money, but making great content online...
I do think that’s an issue, but it’s solved by getting full time creators here on Steem and having better distributions. Right now there are so few authors that are getting consistently high payouts, so curators gravitate toward them and autovote for rewards. Once there is more competition I think the issue will be resolved somewhat. Thanks for the reply, cheers!
Is is such a great post for those like myself who are just starting out and trying to find how and where we can make the best impact. I'm seeing myself as more of a curator creator. I'm still learning on both fields however. You have provided good tips especially for creation. Thank you.
good work! your assesment is excellent and I appreciate the effort to made to break it down. I agree with what you've said. I wonder, though - is it predictable at all what happens when you complicate the picture by considering how many users might be in places like malaysia, where $10 USD might be significant earnings and not just enough to buy a cheap lunch? In any case, good food for thought.
Thanks so much! I may be incorrect, but the majority of Steem Power is held by English speaking users. So it’s harder for non-native English speakers to make as much money here in general. So my guess is it evens itself out. Now if the individual from one of those counties speaks and writes well in English, they will do very well.