I am going to see if I can put together a few articles detailing what is making crypto communities so different and how it is the basis for a completely different model. I would use the word "new" except that it is not. Instead, cryptocurrrency allows for the advancement of some ideas that were bantered around for decades since it provides the monetary basis to transact.
Today, I would like to talk about one of the basic features we are dealing with here. It is called contribution. This is a radically different approach to the establishment of an system, one that is foreign to the way things are now.
Simply put, we live in a system that is extractive in nature. Throughout the entire process, we see people taking their "piece of the pie". This is something that causes a misalignment of values.
Let us look at the idea of stocks. A company goes public and shares are sold to others. These individuals or entities purchase the units with the expectation of getting a return. Each share of stock entitles one to a percentage of the value of the company along with the profits. Certainly, there are times when companies (boards) opt not to pay out the profits in the form of dividends, preferring to reinvest them. Either way, the idea is to promote the long-term value for the stock holders.
Employees of that company may or may not be shareholders. If they are, unless they are at the higher end of the system, the stock they usually own is minimal. Thus, while they do have an interest, their main focus is as an employee and the benefits received there.
Users or customers are a completely different ball game. They, too, could have some stock but it will be negligible. Their concern is about the product or service and all that surrounds it.
As we can see, there three different things being valued here. We are well aware, in today's world, shareholder value seems to be the most important piece of the puzzle. One could say that companies are concerned about customer experience since it directly impacts shareholder value. While this is acceptable in theory, I can tell you that, after working for a Fortune 100 company, this is not the case. What ends up happening is, since we have industries dominated by publicly traded companies, they all take the same approach. Consumers are left with no choice.
Let us use Facebook since they are a wonderful example of extractive versus contributive.
The users of Facebook are the ones who do the contributing. This is rather obvious. However, but for the few who might own some shares, they are not the ones taking out of the system. In this instance, since Facebook is public, there are shareholders to extract the value. Facebook does not pay a dividend, instead opting to reinvest in operations which enhances shareholder value.
This epitomizes the system we live in. Facebook is not alone in this. In fact, it is more the norm than anything else. Certainly, we can see different takes on this especially when we span different countries, with different parties involved. Nevertheless, it all ends up the same.
We see something different developing in cryptocurrency. It might be difficult to see since we are still in they very early stages and our mindsets are still ingrained in the old model. That said, things are starting to change.
On Steem, as an example, the contributors are the ones who hold the stake. Unlike stock, ones holding of the token does not denote ownership. There is no ownership of Steem. Instead, it is a holding that allows one access to different parts of the network. It provides utility that directly impacts the experience.
That does not mean there are not investors who seek out a ROI. There are. This is something that is going to continue for a while but I would expect things to change as this model gets more ingrained into people. Nevertheless, it will always be a part of the equation since there is the time element. As we accumulate more tokens, we are going to be able to help newer projects. While we might want to support all of them with our efforts, that simply is not practical.
I think a case example is Steemleo. One of the reasons why I really like this project is because it is placing great emphasis on what I am citing here.
Who owns Steemleo? The answer is nobody. We have token holders who opt to stake the token. Like STEEM, this allows them to use the platform, providing certain benefits.
There is a team behind the project. This team does not have ownership stake other than the amount of tokens they hold. While it is higher than the average person, the benefits of being one of the early founders/adopters, their goals are aligned with everyone else. These individuals are not seeking what they can get out of Steemleo as much as what can be put into it. The overall value of the platform is what is of concern.
Of course, the contributors have the same goal. The distribution is established in the code so everyone knows the LEO that are being "printed" each year. Thus, there is only one place to concentrate: making the token more valuable as compared to others.
The absence of any "rent seekers" makes the entire platform more efficient. If something is a good idea for the users, it is also for the team behind the project.
This is not to say that a model like this does not have direct payments. Certainly, there are time when expertise is required that is not within the community. On a platform like this, the most obvious is development. Many developers require fiat to provide their services. At the same time, there are also legal, accounting, and marketing aspects to any venture that could require professionals.
We also see private ownership. Steemit Inc has a stake in Steem just like everyone else. It is also a private company. Thus, it has an additional layer of goals that the platform does not have. In the end, this could cause great conflict and this aspect of the model might be found to be inefficient. We will have to see how things unfold but the idea of converting all that we can to DAOs in these type of systems might win out. Or perhaps, the hybrid system will be found to provide benefits in certain instances that make it an ongoing part of these ecosystems.
Either way, this does not override the contributive nature of things. Compared to the present system, this is a model that is showing a lot greater promise. It is not new rather just another twist on the cooperative idea that has been around for decades.
What is novel is the application online. The ability to operate peer-to-peer was the premise of the Internet. That said, the challenge came from the fact that a few things were missing from the original protocol. One was the ability to transfer value. This omission led to the formation of the likes of Amazon, PayPal, Google, and Facebook. These entities ended up as third party extractors or were responsible for the siloing of the Internet.
This is going to change. We are seeing many platforms put into place that will alter this outcome. In my view, it is proving to be more efficient and much better at aligning goals. While far from perfect, greatly because of the novelty of it, we are seeing progress being made.
Over the next few years, as we see millions involved, I think the paradigm shift will take hold.
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