SteemFest: Growing Steem Ecosystem
#SteemFest in Krakow was an amazing event, packed with useful sessions, community events and extensive cultural program! The efforts and skills required to organize such an event are truly admirable. I sure hope @roelandp will find the way to keep SteemFest going for years to come!
Here is the slightly edited version of my presentation “Growing Steem Ecosystem” and the introduction of Attention & Reference Trading concepts.
SteemFest - November 2018 (Krakow, Poland) - Day 2, Room 1 (02:31:00)
My name is Alex Gruntsev. For the past 20 years I was applying new technologies and building different products until the distributed blockchains challenged the foundations of existing business models.
Much of innovation used to be about gaining competitive advantages and building barriers of entry. It was necessary to keep customers unaware of alternative options and to squeeze better terms from suppliers. These were business models based on obscurity.
But even the atmosphere at SteemFest reveals something very different. App creators openly share ideas, customers and vendors happily mingle together celebrating service improvements, direct competitors almost hugging each other. Why?
Because all parties benefit from the growth of the open platform they use.
Being a Steemian means answering the question "Where does money come from?" on a regular basis to your friends, family, colleagues and total strangers.
And the safest way to answer this question is to explain the technical details of the reward distribution process to authors and curators. For example, this year, despite the market slowdown, Steem blockchain will reward its contributors with $19 million!
Surely, if everybody is being paid and nobody is paying (no subscriptions, no advertising), the system should deflate. Right? Well, but how did it "inflate" in the first place? It must be that crazy crypto bubble that just popped. Haven’t you heard the news?
Ok, jokes aside, let's look at the big picture. While certainly there are cash-out flows from Steem ecosystem, there are also deposits happening at the same time. So, Steem must be good at exporting value as well.
First, it is reputation and voting power. Authors need a balance of Steem Power to support their audiences, and curators need it to upvote promising content. Essentially any influencer on Steem will need a balance of powered up Steem to be effective.
In the last year and a half, we observed an explosion of bots on Steem. And while we might feel irritated by them, they play a very important role - they offer passive investment income to investors and speculators. For example, average annual ROI for the popular @therising is around an incredible 20%. There are not many crypto investment opportunities around that offer that level of return measured in crypto.
Finally, the upcoming Smart Media Tokens are expected to enable many new business opportunities and these projects will be required to stake a certain amount of Steem tokens to use system resources. This way SMTs further increase demand for Steem tokens.
Steem ecosystem has a lot to offer today, including creative potential of all the people involved.
Today I would like to discuss the vision of how we can grow Steem ecosystem even further.
Steemians, I invite you to re-image advertising.
Today, businesses chase their target audience using different intrusive techniques, aggressive strategies, sneaky tactics and creative intermediaries to bother us wherever we navigate.
Attention Trading on Steem offers a different approach.
Businesses will be able to post bids on the blockchain that will specify how much they are willing to pay to users who match certain criteria for their attention.
For example, a business may offer $5 or $10 to users for watching a video, installing an app, following their account on Steem, answering some questions, trying out samples and so on. But this offer is only available to eligible users that match certain requirements, for example: a user’s reputation should be no less than 50, they should have at least 100 followers, have made at least 10 posts, voted 100 times, have expertise in certain topics and live in a certain geographical area. Oh yes, and their account must have a minimum balance of $100!
This type of targeting is unprecedented. On Steem you can target users by the amount of money they have in their wallets. Transparency offered by the blockchain and targeting options are incredible.
Facebook offers a lot of precision targeting options as well, but businesses' ability to verify these claims is limited. There is no transparency. As a customer, the business has to trust a central authority to do the right thing. And, you know, maybe they do.
But the monumental shift is that users are the main beneficiaries of Attention Trading. Advertising budgets now can be redirected to users, completely bypassing all intermediaries, which are no longer required. Businesses can now communicate with their target audiences directly and they don't need anyone's permission to do so.
Some may say: "Here goes our ad free environment…"
Wait a second, these are not ads, these are direct messages to users and they no longer should be mixed into the content like annoying ads do. Imagine there is a separate tab in apps, which alerts you when someone wants to pay you for your attention. You can accept, ignore it or even counter it, saying you would do it, but they should double the price. You can even record your preferences onto the blockchain, so that everybody knows the minimum price of your attention. Maybe you can set different levels depending on types of bids, domains and so on.
We just invented an Open Attention Market. And Steem is the best place to launch it.
App creators can integrate Attention Trading into their apps and collect, say 5%-10% paid by businesses for providing convenient interfaces and action validations (locating the user and confirming execution, if necessary).
Besides targeting users using their general information, such as number of followers, it is important to understand what users are interested in and whether community recognizes the value of their posts and thus confirms their domain expertise.
The proof-of-brain consensus establishes the value of each post based on the number of upvotes it received from the community, and that value is expressed in monetary form.
Now it becomes possible to calculate weights of hashtags, based on the cumulative earnings of all posts that referenced that hashtag. For example, a large city will have more references compared to a smaller one and this will be reflected in the overall weights of these two objects.
If posts had multiple tags, their earnings should be distributed to multiple objects accordingly. An advanced version of hashtags would allow authors to specify link weights, even assign negative and zero values.
Additionally, we can calculate expertise of users in an object, by adding up the value of all references from their posts to that object in relation to the overall weight of the object.
Waivio Reference Protocol suggests a process how traditional hashtags can be enhanced with additional information, such as full names in different languages, descriptions, locations (where appropriate), pros/cons/tips, photos and all other types of information. It becomes possible to organize objects into lists, catalogs and categories, and the community can vote on every aspect of that object, improving its description over time.
Objects enable accumulation of knowledge from posts as well, including general and seasonal trends, related objects, key influencers and more.
Users should be allowed to follow objects as they follow other users on Steem blockchain and be informed when a new post referencing their favorite object is published. This can dramatically improve discoverability of posts on Steem as well as connect people indirectly through their common interests.
Objects would allow App Creators to build niche apps that provide custom interfaces and experiences for groups of people with shared interests, such as hiking, cycling, cooking, dining, fashion, travel, shopping and many more.
The next level of targeting is domain expertise of users.
It is possible to select a subset of objects. For example, all hiking trails around a city and compile a list of all users that referenced these trails in their posts, and sort them according to their expertise in hiking around that city.
We can combine hikers with campers, cyclists and so on to receive a list of users that enjoy outdoor activities in this area to present them new outdoor gear, specialized clothing and more.
Domain expertise of users can be calculated in very precise ways, by adding, overlaying, subtracting data sets. This level of transparency and openness has never been available to businesses before.
And all that deep targeting data is verified by the community and can be used by businesses to openly approach their potential customers, offering them clear value in return for their attention.
In addition to Attention Trading it also becomes possible to provide incentives to users for future actions, such as writing service reviews, doing product placements or creating content according to some requirements.
For example, hotels near a beach might incentivize surfing reports, thus increasing the overall popularity of that destination and potentially attracting more surfers to come to that place.
Or a company that manufactures food items might incentivize users to create cooking recipes with some of their ingredients.
When new posts are being created, Steem blockchain offers a very effective way to support submissions by upvoting them.
To do that, business may choose to power up some Steem tokens to obtain higher Voting Power and vote for posts that match their criteria.
Maybe we will see some businesses that have whale or even mega whale accounts on Steem.
Both Attention and Reference Trading form an Open Attention Marketplace, where users retain all the control of their own attention. There is no point in trading privacy data, because users are no longer manipulated by advertising. Instead, businesses can openly approach their target audiences and communicate with them directly.
Now it is up to users to decide the price of their attention and social actions.
It is hard to predict how this market will evolve and what practices will become common. But what we know for sure, is that this open market makes users the main beneficiaries and provides businesses a very transparent, predictable and fair way to approach their potential customers.
Maybe we will even find a more appropriate word for it, as this is no longer really “advertising”.
Steem ecosystem has something very valuable to offer to the outside world – Open Attention Marketplace. This increases demand for Steem tokens to power up growing number of transactions on the blockchain.
Value of Steem open social platform is driven by the number of active users and as innovation continues to accelerate and open software development community builds exciting user experiences, we will see the value of Steem ecosystem grow exponentially.
Arrival of businesses to the scene will lead to the growth of e-commerce on Steem blockchain. In fact, it is very easy to integrate STEEM payments into websites. Current power down procedure takes 13 weeks and makes commerce impossible. Therefore, WVIO smart media token will support instant power down to enable shopping on Steem.
E-commerce will increase utility value of tokens and users will be able to spend them on products and services directly within the Steem ecosystem without cashing out, while businesses will have a motivation to increase their holdings of tokens to gain Voting Power and overall influence on the Open Attention Marketplace.
These are very exciting times and we will have an opportunity to observe these developments.
Today we are announcing two projects that are being build using Waivio Reference Protocol and are going to support Attention and Reference Trading:
InvestArena is a social project that will allow people to discuss different investment opportunities, ICOs, STOs, companies and markets. And to make these discussions meaningful users are invited to make forecasts which will be recorded on the blockchain and later compared to actual developments.
Prediction ability of experts will be calculated using cumulative Brier Score and those with better skills will benefit from the increased visibility of their posts and forecasts.
Often it is difficult to find reliable information and reviews for Initial Coin/Token Offerings and simplified rating systems may not be enough to make informed investment decisions.
InvestArena is set to solve that problem by offering multiple expert perspectives, analysis and formal forecasts, while keeping experts accountable for their predictions.
SharpHooks is a social app for anglers, where they can exchange fishing reports, fishing advice, equipment reviews and more. All data is being aggregated, processed and visualized to assist in planning fishing trips and connecting with other anglers.
Incorporating Attention Trading into SharpHooks would allow businesses to bid directly for the attention of this lucrative audience. Anglers spend a lot of money on their sport!
This hobby app is an exciting example of application of proof-of-brain consensus for a niche audience within Steem ecosystem.