Steemit, which gained popularity in the Bitcoin community after it introduced the first blockchain-based website, announced a December 6 hard fork this morning. The fork, which had been discussed in Steemit forums in recent months, is designed to change the platform’s economic model and to benefit the social platform’s community. This will be done, according to Steemit CEO Ned Scott, by onboarding more short to medium term investors.
Before the change is made, “witnesses”, who help to govern the experimental blockchain system, will have to agree to the change through a voting process. The main change will be to the Steem currency’s inflation rate.
The idea to bring on short to medium term investors is designed to attract those individuals who speculate on cryptocurrencies, including for instance Ripple, Dogecoin, Litecoin and Ethereum.
“With this hardfork the greatest portion of the community feels the ecosystem will be changing for the better and will now be more accessible to more people,” Mr. Scott said in a statement. “The hard fork request was initiated by the community, and once we reiterated the recommendations, we received an overwhelmingly positive response. The reason we built Steemit was to create not just a community where people could get rewarded for their time, creativity, attention and effort; but one where every user has a voice. The community has recommended improvements to the platform and we responded to help us all. We’ve always encouraged two-way dialogue with our user base and we feel that this will benefit all current and future users of Steemit.”
Steemit hopes the change to the economic model will bring an influx of new users to the platform.
“Steemit’s value and growth has been phenomenal, but it was hindered by a reliance on long term participants,” the blockchain startup said in a statement. “The new structure of Steem lowers the inflation rate and adopts a model much more similar to bitcoin, which encourages participants who don’t want to lock up their cryptocurrency value for long periods of time to have influence in the social network. While all Steem holders will have increased liquidity, the allocation of new Steem tokens to witnesses, content producers and creators won’t change; that figure still sits at 9.5%.”
Mr Scott tells GoldSilverBitcoin that recent months for Steemit have been an “incredible learning experience”. The calls in the community to attempt a new iteration of the platform have not fallen on deaf ears.
“Users were looking for a system more reliable and easier to explain, which had less of a completely new experiment behind it,” said Mr. Scott. “When we originally designed Steem, it had this model for supporting people long term participants.”
People felt like too much inflation in the system (per the platform’s two year vesting period on Steem power) hurt the value. The new model is meant to for short and medium term investors who might trade a portfolio of cryptocurrencies and have less interest in the content creation aspects of Steemit.
“It’s means shorter amount of time to get liquidity in the system and there’s no more hyperinflation,” explains Mr. Scott. “The whole system is more accessible to medium and short run speculators, and generally it’s more playable.” The new changes will make it easier to have Steem power, which influences on social networking side.
“We truly believe in decentralized social media platforms in the sense they will become the new norm,” says Mr. Scott. “This is the very first website to be built on a blockchain, to have an incentivized token system that incentivize certain behaviors. The reason why I got into bitcoin is I love these systems that are incentivized databases that cause certain behaviors. That’s what really led to Steem. A place where people can monetize posts and socialize.”