Hello Steemians, as you might have heard, Steemit has a new Managing Director (@elipowell). We are still developing and refining our strategy under her direction, but we wanted to share with you what we are thinking so that you can have better insight into the organization.
We are committed to making consistent improvements to Condenser (steemit.com). Condenser is the open source software that powers steemit.com. The difficulty with maintaining Condenser was the large cost we were bearing. Steem integration is a powerful driver of growth, but with growth comes scaling challenges. As more users joined Steem to use steemit.com, the more time, energy, and capital was allocated to improve the back-end database built entirely on the Steem blockchain.
The more successful steemit.com became, the more time was spent on Steem, not Condenser. When the cryptocurrency market was strong, it was more justifiable to just absorb the cost of running steemit.com, but it eventually became clear (even before the bear market) that in order to justify the back-end costs of running a site, the front end itself must be revenue generating.
Lowering Node Costs
When steemit.com initially launched, Steem users had no other option for accessing the Steem blockchain. There are now a plethora of great Steem-powered user interfaces and more coming online every week. We think that’s amazing, but most of these interfaces also use the infrastructure that was created to power steemit.com (Steemit’s APIs and full nodes), increasing our costs even further. Due to these factors, operating our full nodes became the single largest expense which is why we had to spend the last 2 months focusing on lowering the costs of running nodes. We have made a lot of progress on that front, making it less costly for 3rd parties to stand up their own full nodes, power their applications, and foster more decentralization.
But there are still real costs associated with running front ends like steemit.com, and the back-end infrastructure necessary to power them. In order to sustainably pay for those expenses, revenue must be generated which is why we are working to integrate advertisements into steemit.com. Ads are the most established and mature method for monetizing web interfaces which makes them the most promising opportunity for monetizing steemit.com.
As the only blockchain powering real applications with thousands of ordinary users, Steem needs real solutions for improving the economic sustainability of the ecosystem today. Since Steemians now have ample choices for accessing the Steem blockchain, we believe the time is right to experiment with ads. We are open to exploring more advanced and innovative solutions, but first we need to stabilize the organization and develop a sustainable business model that provides us with the revenue needed support this massive, and growing, ecosystem.
This is why @elipowell has been made Managing Director of Steemit and @ned has moved to a higher level position where he will be less involved in the day-to-day operations of the organization. He will be lending her his experience and expertise in the space, while empowering her to move forward based on her own vision of a successful steemit.com. We have an amazing team of developers who know this technology like the back of their hand. @elipowell has that same level of expertise with advertising and managing teams. We believe that these two skill-sets, when combined, will enable us to make faster progress. Thanks to the recent release of Hivemind, related tools, and our successful node cost reductions, we are now primed to make rapid progress on efforts like RocksDB and Version 1 of SMTs.
We look forward to keeping you updated as progress is made.
The Steemit Team