@pennsif’s tribe.talk episode yesterday featured @elipowell, @roadscape and @jongolson. They talked about the launch of communities and how they will work in the beginning.
One of the other topics brought up is the cost of creating a community. Creating a community is basically the same process as creating a new account with a few other minor formatting details. The cost of doing so is 3 STEEM, which is ultimately burned.
The price of 3 STEEM is currently about $0.40 USD.
Does $0.40 seem like a fair price to launch an entire community on the Steemit interface?
In the real world, $0.40 is about the amount of money I pay to the parking meter to have my car sit in front of Starbucks for 2 hours. It’s about 1/4th the cost for me to then go into Starbucks and buy a cup of coffee.
Does it seem reasonable that creating a community — which can be likened to essentially launching a business — costs 1/4 the amount that it would for me to buy a cup of coffee?
That makes absolutely no sense. The fallouts of having such a low barrier to entry are some the are known and many that are unknown:
- Name squatting — if creating a community is so cheap, why not squat the name of hundreds… thousands of online businesses?
- Community Creation Spam — if I were to venture I guess, I would say that within 48 hours of the launch of communities, there will be well over 1,000 communities created by less than 100 people
- Waste of an Opportunity
- … unknown impacts of a low barrier to entry
This third point is the most important one in my mind. We have all been taking about how STEEM’s inflation rate is too high. How there is such a small amount of burning happening on this blockchain. We also now have the @steem.dao.
We have two different opportunities here —> we can burn more STEEM or we can send more STEEM to the DAO. Why would we not capitalize on that opportunity as a blockchain?
Ultimately, this is Steemit’s product and it’s on their website. Communities are not a fundamental blockchain development and with tribes, communities are actually an inferior product.
Regardless, competition is good. Options are great. We’re finally seeing some progress out of Steemit, Inc. toward the vision that was laid out over two years ago.
How Much Should We Charge for Community Creation?
If I want to launch a business in the U.S., it can range from hundreds to tens of thousands of dollars, depending on the structure of the business you launch.
Forming an LLC costs $500 and a $250 annual fee. The fee for a corporation varies, but is usually $125 to start and $100 annually. Illinois offers a wide variety of business structures.
This is actually an annual fee. Forming an LLC doesn’t actually do much for you. It’s simply a starting point and then it’s up to you to build the rest of your infrastructure and business. Essentially, it’s a “tax” for the simple ability to start.
Starting a community on Steemit is very similar. You’re launching a business or maybe you’re already an existing community elsewhere on the internet and you want to come to Steem to build a web 3.0-enabled community on the blockchain with proof of brain tokenization.
I said this in chat during the conversation —> if you’re starting a community, $100 should be pocket change to you. People who can’t afford to pay $100 to start, probably shouldn’t have a community anyways.
With that said, I think $100 worth of STEEM should be burned or sent to the @steem.dao or maybe even a combination of the two in some sort of pay split. This would have the effect of burning STEEM and combatting inflation and/or funding further development of the blockchain.
Some people think that $100 is too much to start a community.. I think that’s utterly ridiculous. Even @roadscape said on the show that we should focus on the cream of the crop — the communities that actually have some sort of promise.
Why not create a barrier to entry that automatically filters out 90% of the shit-communities that people would create if the cost was 1/4th what it costs to buy a cup of coffee?
The entire Steem blockchain is a decentralized cooperation of people. If you want to use our facilities, then there should be some cost to doing so. Similar to how a government might charge tolls to use highways or how I have to pay a parking meter to park in my town when I want to shop at a store or sit at Starbucks.
This is a source of funding for my local government. It’s how they keep the roads clean, the streets safe and fund the development of local schools.
Why shouldn’t we think of Steem in the same way? As a government body that needs to source funding for further development? Why charge $0.40 for something when you can charge $100 and actually make it a better environment because there will be less spam and name squatting?
Just to tie a nice bow on this, I think Steemit, Inc. should charge $100 worth of STEEM for community creation and send 50% to @null and the other 50% to the @steem.dao to support the price of STEEM and further the development of this blockchain.
As the STEEM price goes lower, it costs more STEEM to create a community, because the supply is less scarce.
As the STEEM price goes higher, it costs less STEEM to create a community, because the supply is more scarce.
Seems like rather basic economics to me. Two of the most important focus points on this blockchain should be funding further DAO developments and reducing the overall supply of STEEM.
