Steem’s Mining Difficulty is Too High for Content Creators?

in steemleo •  3 years ago 

steem's mining difficulty.png

Most people on Steem don’t think of content creation as a form of mining. We’ve all heard the term Proof of Brain (PoB), but how many of us really understand it?

On the Bitcoin network, newly minted Bitcoin is distributed to miners based on a system called Proof of Work (PoW). The work that miners are doing is all done on ASIC mining units — Application Specific Integrated Circuit. These units are automated computers that are all competing on a global scale to be the winning unit every 10 minutes (10 minutes is the block time for BTC).

Miners are competing to be the winner, which allows them to be the ones who confirm the next block of transactions and earn Bitcoin. Thus, Proof of Work is a competition for resources. Due to the high mining difficulty in 2019, if you want to mine BTC profitably then you’ll need a warehouse that is well-positioned in terms of electricity, environment and location to ASIC miner factories.

On Steem, mining is a bit different. There is something similar to this Proof of Work mechanism where people are competing to be the ones who get to confirm the next block of transactions, but here on Steem it’s called DPoS which stands for Delegated Proof of Stake. That’ll be a topic for another post.

What we’re investigating here is the largest recipient of newly minted STEEM — Proof of Brain. After the changes in HF21, PoB now receives 65% of the overall inflation pool.

Before HF21, we had a lot of issues on Steem. Not all of these issues are resolved completely, but they have gotten a lot better. The purpose of this post is to explain these issues from the viewpoint of mining this newly minted STEEM.

Misaligned Economic Incentives and Easy Mining

Prior to HF21, the economic incentives were clearly skewed toward abuse. If you had a lot of SP and a lot of time, then the best thing to do was create 10 posts or comments a day and self-vote them. Then, you would buy small to large bids from the bid-bots for your posts.

Bid-bots typically gave a small ROI to the bidder. Anywhere from 5-20% depending on the bot you used and the times when you used them. The real profit was from the curation rewards you got from front-running the bid-bots on your own post. Many users were making thousands of STEEM per week from this method.

The problem is that this adds no value to Steem. The point of this strategy is to be as under the radar as possible. You aren’t contributing any valuable content to Steem, you aren’t developing anything for Steem… you are simply draining rewards from the overall rewards pool from people who are actually trying to push the chain forward.

You can’t blame anyone for doing this. The economic incentives on the blockchain were broken. The point of decentralization is that people get to do whatever they want and follow their own self interests. If you have misaligned incentives, then you can’t blame someone for using that to their own advantage.

After HF21, we see that the incentives are skewing toward manual curation (or at the least, setting up auto voters on popular content creators). The best way to make an ROI on Steem is to vote on popular authors before other people. The “best” content rises to the top — of course, this depends on how you define “best”.

In reality, it’s good content made by a creator with a lot of attention on the blockchain. More specifically, attention from large stakeholders. Is this a problem? No.

Is The PoB Mining Mechanism Making it Too Hard to Mine STEEM?

The fact is, a handful of content creators consistently get more rewards than anyone else. A lot of other content creators on Steem are claiming that their content is actually better and they deserve more rewards.

That’s all fine and good, but do they actually deserve more rewards?

When you look at other social media platforms, you’ll see that there are a few creators who make the VAST MAJORITY of the rewards. They get the largest brand deals and they are sponsored for the largest amounts.

It’s not because their selfie is better than someone else, it’s because of the value they bring to the platform and the sponsors via attention. They’ve built a loyal fanbase and brands know it. They are willing to pay top dollar because they know that anything posted by that influencer is going to influence a sizable portion of their audience to ultimately make a purchase.

On Steem, it’s no different. The handful of content creators may not have the “best” content in terms of raw quality each day. The reason why they earn the most rewards is because of the consistency of their blogging. They have carved out an audience on Steem and minnows, dolphins, orcas and whales alike realize it.

Once an author is discovered as having consistently good content, the upvotes start to slowly increase with time. Eventually, more people realize the author is posting consistently good content. Rewards go up a little bit more.

At some point, the author hits their stride and now they have gained the attention of some whales on the platform. Through consistent upvotes on their content, it’s attracting the attention of other large stakeholders who are now competing for the highest curation rewards on that authors content.

These large stakeholders are competing to increase their rewards through curation, but the author who’s getting upvoted is also competing with other authors for those large upvotes. It’s not a competition based purely on quality of content, but rather a competition based upon quality, consistency, readership, engagement, brand building and more.

In short, if you put yourself out there on the Steem blockchain by engaging in various discord channels, telegram channels, commenting on other posts, curating other authors, finding ways to support the overall blockchain and most importantly: consistently putting out good content… then you will find your niche and eventually, your rewards will consistently go up.

To answer the question of this post, I believe that the mining difficulty on STEEM (in terms of PoB) has gotten easier as it is now a competition to build a brand and post good content consistently rather than a competition purely for resources to arbitrage your account with self-votes and bid-bots.

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I've seen that exactly as you said it. I don't normally have enough free time to post daily, but this past week I posted four times, which is double my usual output. I noticed a steady increase in followers each day which can only be the result of putting myself out there more.

That's great! I think the discipline of posting daily is a great one to cultivate. I'm working on it myself. I used to post multiple times a day way back when I first came to Steem and it helped me to quickly build a following here. Nowadays I have a lot less free time, but I am still doing my best to make at least 1 post a day!

Thanks for your explanation of why a small group of content creators are able to get larger rewards. I've heard it numerous times about putting yourself out there for the greatest amount of exposure. I can see now how being patient while consistently adding good content and value to Steem will eventually earn greater rewards.

Absolutely. I think that what you're doing right here is one of the best ways to get more recognition on Steem. Engagement is one of the many ingredients to "making it" on Steem. :)

If you want to make money being an influencer, you need to influence.
There is also the issue of dedication to the platform, if you power down and pull off all your 'rewards' people will notice and stop supporting you.

There is also the ability to make money solely from investing and this is curation. You can delegate or just follow a skilled curator and make more Steem doing this than ever before.

I like the new system better but that is because I am slowly learning the subtle art of both. I don't think my content is very good or anything, but for the time being, it's good enough. I feel I can stay on top longer especially if I slow down.

For people who can't influence or trend without cheating/using bots, I suggest you take a careful look at what is trending. There are certain topics that are more likely to trend. Also, you need to engage your followers and their posts, too. If people are ignored or neglected, they will leave.

I think tribes are a very good start for this and the best way to do it is not to join the most successful tribes, or worse all of them, join a tribe where you have something to offer in terms of content creation and consumption. If it doesn't interest you, I can promise your posts will not be that good.

These are some really fantastic points. The idea of carving out a following and dare I say... doing research 🙀 about what kind of content to create, how to formulate your titles, making a good cover, etc. are lost on so many Steemians.

People think that blogging on Steem is somehow different to blogging on other platforms. Fundamentally, all the main aspects are the same. We've just got some extra benefits piled on top and we have a more tight-knit userbase.

The strategies of putting yourself out there and researching what the audience wants are still key components to the overall "game" of content creation and "influencership" (is that a word?).

Tribes are definitely a major benefit to the mission of encouraging more great content on Steem. It's way easier to sort through content now that we have tribes and I can also support and read content that I actually like (which is why I started SteemLeo for investing content) rather than sift through the great sea of irrelevance that is the Steemit new page.

Very valid points.

To take it one step further, the opportunity right now is from mining the Tribes. They all are built upon the same Proof of Brain platform. This means getting the attention of the whales in the tribe. These people are, for the most part, different from those who are STEEM whales.

This is the great thing about Steem, we see the process continually repeating itself. The opportunities keep popping up with each new tribe.

Yes! You're absolutely right. It adds extra layers on top of mining STEEM. Now we can mine STEEM and use the same proverbial pickaxe (in the form of content) to mine other tokens simultaneously. This gave me the idea for another post ;)

This article and steem blogging in general reminds me of trading, it's not a quick get rich scheme, but with consistency and discipline, one will get out of it, what they put into it.

Exactly. It also carries a similar misconception as trading: people expect it to be super easy, but once they're in it, they realize that it's not as easy as they once thought and have to decide whether they want to give up and leave or push forward and persevere.

On Steem, it’s no different. The handful of content creators may not have the “best” content in terms of raw quality each day. The reason why they earn the most rewards is because of the consistency of their blogging. They have carved out an audience on Steem and minnows, dolphins, orcas and whales alike realize it.

EXACTLY!! Yes, quality matters a lot, better quality should get good rewards, but there is a thing called networking which is just as important, networking is one of the most important things we humans have on social networks, creating, developing and growing your web of contacts, your followers, your friends, provides just as much value as you would get from making your content better.

This can be expanded to real life, there are so many companies that focus more on the people's skills than on the professionals skills when giving a job...

100% agree! Somehow, the concept is lost on so many people who come to Steem. I boil it down to a marketing problem and generally human nature. People are told that they can earn money for their content on Steem, but to them that means that they are entitled to come here and earn a HUGE paycheck for little-to-no work.

People skills are getting more and more valuable with each passing day. Ironically because of the social paradox of technology which makes us more connected yet more disconnected than ever before

I am really glad you did this post @khaleelkazi because it Really is Better That there is more Manual Curation being done on Steemit and I see an Up Tick of more Engagement with people that are getting involved by their curation...........

It's wayyy better! Many of us who have been here a while appreciate the changes and I think it's only going to get better from here

I must admit that I came here to read about miners and instead found a metaphor explaining POB mining and it was a pleasant, informative surprise.
🙏🏻

It's pretty fascinating, right? Steem is truly something special because of this.

Thank you for posting from the https://steemleo.com interface 🦁

Thank you Khaleel, and all the other contributors who have made this blog so memorable to me.

I joined Steem just 37 days ago, so still in nappies taking my first tentative steps.

We need more old fish to write content relevant to new fish.

One of the most challenging aspects of Steem is the lack of a central guide. I like that approach, as newbies are forced to explore, to find tribes and apps that interest them.

This post Khaleel, written in simple English, explains so much; hence the resteem. tyvm.

My favorite quote:

Once an author is discovered as having consistently good content, the upvotes start to slowly increase with time. Eventually, more people realize the author is posting consistently good content. Rewards go up a little bit more.

The best statement from this post that everyone who wants to be successful on STEEM needs to read and understand, IMO this could also be the TL;DR, (although we don't really need the TL;DR mentality on STEEM honestly..):

In short, if you put yourself out there on the Steem blockchain by engaging in various discord channels, telegram channels, commenting on other posts, curating other authors, finding ways to support the overall blockchain and most importantly: consistently putting out good content… then you will find your niche and eventually, your rewards will consistently go up.

This also helps to weed out the users who we don't really need in the eco-system as they will hopefully disable their miners:

I believe that the mining difficulty on STEEM (in terms of PoB) has gotten easier as it is now a competition to build a brand and post good content consistently rather than a competition purely for resources to arbitrage your account with self-votes and bid-bots.

I agree, I am definitely loving this #newsteem and I am a Red Fish, so that debunks the negativity that the small accounts are harbouring, as so many of them are whining about their lack of rewards due to a curve.. It's just that before they did not have to do very much for their rewards.. It was like using a crypto faucet.. Come on STEEM, click a few buttons and that was that, no need for reading other's posts or proof-reading your own posts for that matter...

Now one actually needs to do work to get anything substantial. Need to work harder on creating your content and need to work at discovering other's content. Also I feel like the most work that needs to be done, at least for me, is networking and creating content consistently. - In my own personal case the meaning of consistently is in regards to keeping up a good posting schedule to remain relevent and in the minds of would-be/soon-to-be/already loyal followers.

I'm tackling the #blogtober challenge this year (as usual, I came in late xP) where I'll be attempting to post 31 posts consecutively on a daily schedule.
Wish me luck!

*When I use the term you in my commentary I am using it in the general/overall context, not you personally

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