Steem: the $1 billion crypto for content curation and creation

Copyright 2018 Aaron Li
(aaron@qokka.ai)
Copyright 2018 Aaron Li (aaron@qokka.ai)
Aaron Li
Feb 20, 2017
https://linkedin.com/in/aaronqli/
https://t.me/ai_qokka https://facebook.com/ai.qokka
http://qokka.ai/about
Steem: the $1B Crypto for Content Curation
reward content creation and curation without micropayment

from zero to $1 billion market cap
aaron@qokka.ai
Founder & CEO @ Qokka
- Pitfalls of existing platforms: readers rewarding authors via micropayment

- What is steemit.com, a thriving community based on Steem, the $1B crypto?

- Behind Steem: crypto design, blockchain mechanism, economy system

- Why does it have to be on blockchain?
Topics:

(aaron@qokka.ai)
Announcement
Coming soon: Crypto Information Platform
Find out more at http://qokka.ai/crypto
https://t.me/ai_qokka
Summarizing news, discussions, technical papers, teams …

(aaron@qokka.ai)
Pitfalls of existing community content platforms
readers rewarding authors via micropayment
Communities want to …
=> have readers to decide what content is good
keep a sustainable business model
reward people who write good content
=> have readers to pay for good content
deliver good user experience & keep pages clean (no ads)

(aaron@qokka.ai)
Solution (existing platforms):
Micropayment & Tips
tips authors with small amount of money
But…. do readers really pay more often?
at minimal delay and near-zero fees
* Very challenging technical problem, see link

(aaron@qokka.ai)
Large platforms using micropayment & tips:
WeChat - Launched in 2015, lots of media coverage but with limited success
Experimental:
Flattr - Launched in 2010, acquired for undisclosed amount

Blendle - Launched in 2014, >1M users, $3.8M funding

Tibbit - Launched in 2016, ~$300k funding
Brave (Basic Attention Token) - Launched in 2017, $42M funding, blockchain-based

Coinbase (Payment Button) - Launched in 2018, blockchain-based
Small Scale:

(aaron@qokka.ai)
To tip = making a decision to buy
= calculate “Is this much of X worth that much of Y?”
= mental eﬀorts & anxiety from users
only transaction users would approve without a thought:
one cost them nothing
(also see “The Case Against Micropayments” by Clay Shirky)

(aaron@qokka.ai)
steemit.com: rewarding authors without micropayment
the platform based on Steem, the $1B crypto

(aaron@qokka.ai)
Motivation
Reddit would be improved if everyone who contributed to
reddit.com by posting stories, adding comments or voting
were rewarded with a fair share in Reddit, Inc
- Erika Morphy, Forbes, Oct 2014 (link)

(aaron@qokka.ai)
Users don’t pay each other.
Everyone gets paid by the system

(aaron@qokka.ai)
Users: >750,000 as of Feb 2018 (~3x Aug 2017)

~20% weekly active, ~10% daily active
Launched in March 2016, new blockchain, no ICO
$30M has been paid out to >50,000 users, as of Oct 2017

(aaron@qokka.ai)
post new content vote (+1) on existing posts
payout ∝daily rank of upvote help decide who should get paid
payout ∝vote power spentkeep 0% / 50% / 100% payout
What do users do?

(aaron@qokka.ai)
Three types of tokens
Steem SP
(Steem Power)
SBD
(Steem Blockchain Dollar)
For? Trading & exchange Carrying inﬂuence Preserving Value
Feature?
Convertible to

SP and SBD
Vote on things

(posts, witnesses, …)
Pegged to USD (1:1)

(not working well, needs
improvement)
Similar to? Currency Equity Debt
Interest? None
Yes

(from 15% annual inﬂation)
Sometimes

(aaron@qokka.ai)
Steem Price

(aaron@qokka.ai)
Behind Steem: How does it work?
crypto design, blockchain mechanism, economy system
power down 1:1

over 13 weeks

1/13 per week
Steem
SP
SBD
power up 1:1
trade on

internal exchange
Convert to 1 dollar

worth of STEEM

in 3.5 days
External Exchange
Content creation / curation
Witnessing (i.e. mining)
Content creation

(aaron@qokka.ai)
SP (Steam Power): Get via witnessing, content creation / curation, or market
Decides the maximum weight of votes you cast
Steem: basic tradable crypto token for conversion into SP or SBD
Also get by “powering up” Steem
Convert back to Steem slowly over 13 weeks (1/13 per week)

(aaron@qokka.ai)
SBD (Steem Blockchain Dollar)
Get via content creation, or conversion from Steem, or buy from market
Supposedly stable token pegged to USD (not really working well…)
Redeemable into Steem by conversion (which takes 3.5 days)
or by trading market (which has diﬀerent rate)
Generate interest if SBD price is close to $1 USD (right now 0%)
Promote content in “promoted” section (see link)

(aaron@qokka.ai)

(aaron@qokka.ai)
Behind Steem: How does it reward people?
proof-of-brain: determines social value of content
15%
10%
75%
Authors and curators Witness nodes Interest
Rewards Pool
New tokens at fixed rate every 3 secs
Distributed to authors, curators, witnesses
Works similarly to “inflation” in fiat currency
Rate = 9.5% per year (Dec 2016)
decrease by ~0.5% per year (0.01% per 250k blocks)
until 0.95% (at about year 2037)
How is the fixed rate computed?

(aaron@qokka.ai)
Behind Steem: how does it prevent cheating?
Voting Power
Recharge 20% each day
Depletes a little bit when vote
Vote at X% power has X% weight
Voting Weight
Determined by SP

(aaron@qokka.ai)
Bandwidth
To prevent excessive amount of transactions

(e.g. votes, posts, … any operation with blockchain)
Designed to replace to “transaction fees” in
traditional blockchains (e.g. Bitcoin)
Measured by weekly moving average of
bytes usage on the blockchain
Behind Steem: how does it prevent attack?

(aaron@qokka.ai)
Bandwidth (continued)
Allowance determined by SP
When network load is high, users who use
bandwidth above their limit may get their
operations delayed (votes, posts, etc.)
“dynamic fractional reserve” model, a variation
to “fractional reserve” model used by ISPs

(see Steem whitepaper, page 21)
Behind Steem: how does it prevent attack?

(aaron@qokka.ai)
Behind Steem: How does the tech work?
Steem blockchain technical details
Blockchain - DPoS (Delegated Proof-of-Stake)
Designed for up to 10,000 tx/s
Each operation (vote, post, …) is a transaction on blockchain
Miners = witness nodes; generate 1 block per 3 seconds
Robust against forks (already had 18 hard forks, always only 1 chain persisted)
>> Reddit scale ~= 250 tx/s (~= 220 votes + 23 comments + 2 posts / second)

(aaron@qokka.ai)
Blockchain - Interesting Core Implementation Features (C++)
Steem blockchain technical details
Database: ChainBase (link)
memory mapped, faster than key-value DB (e.g. LevelDB used by Ethereum)
Modularization: AppBase (link)
make Steem blockchain features modularized
Architecture: LMAX (link)
Single thread handling 6 million orders per sec, on some production system s
Behind Steem: How does the tech work?

(aaron@qokka.ai)
Why blockchain?
Proof-of-brain: determines social value of content by public consensus
without blockchain: value of content is arbitrarily set by some authority
Public blockchain: prevents censorship, promotes valuable content
without blockchain: easy to ban users / censor topic / manipulate content
Rewards pool: pay contributors from community economy (inﬂation & interest)
without blockchain: either readers pay, advertisers pay, or companies pay
With blockchain v.s. without
Decentralized system: fault-tolerant distributed platform at high tx/s, with little cost
without blockchain: high cost, dedicated teams to operate & maintain

(aaron@qokka.ai)
Contact
https://linkedin.com/in/aaronqli/
https://t.me/ai_qokka https://facebook.com/ai.qokka
http://qokka.ai/about
Aaron Li
aaron@qokka.ai
Founder & CEO @ Qokka

Steem: the $1 billion crypto for content curation and creation

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