How Many Users Should The Steem Ecosystem Have For You To Be Able To Live On Steem Income?

in steem •  6 months ago  (edited)

I made a post about what the Steem price would be if there was no speculative element to it and if the Steem front ends put together were as capable of generating as much income per user as some mainstream social media sites.

I'll take the median income of full-time employees in Finland, which is €2,800 per month, as the starting point. That translates into a monthly gross income of about $3108 or an annual gross income of about $37,300 according to today's exchange rate. Your mileage may vary depending on the cost of living where you live.

Here's a list of Annual Revenues Per (Monthly Active) User calculated for five mainstream social media sites:

Twitter ARPU: ~$9.48
Facebook: $7.37
Pinterest: ~$2.80
Snap: $2.09
Reddit: ~$0.30

Steem has about 48,000 unique monthly transacting accounts (according to @arcange's statistics). At present, Steem generates 3,483,920 STEEM monthly. Per account that translates into 72.6 STEEM per average Steem account per month or 871 STEEM per year. For that amount of STEEM to be worth the annual median full-time employee income in Finland, STEEM would have to be priced at $42.8.

Steem generates about 43.3 million STEEM at the current level of inflation at present. At $42.8 per STEEM that translates into an annual amount in revenue of $1.83 billion.

Now we can tabulate the required monthly active users (MAU) required if Steem were as effective at generating income as the aforementioned social media sites:

196 million MAU (Twitter equivalent efficiency at revenue generation)
253 million MAU (Facebook equivalent)
668 million MAU (Pinterest equivalent)
915 million MAU (Snap equivalent)
6 billion MAU (Reddit equivalent)

Reddit sucks at generating income per user. Twitter is much more efficient than I thought.

The first couple of figures look possible in the most optimistic case.

The take home message from the figures is that efficiency at generating income per user is even more important than the number of monthly active users by itself. 200 million monthly active users efficiently sorted into niche Communities or Tribes could be expected to generate pretty good revenue per user.

Steemit, Inc has spent the 1-2 years building the back end software components including MIRA and Appbase required for Steem to be able to scale. Now SMTs are being tested and are slated to be rolled out next spring. Communities will also be introduced by that time. With those critical pieces of the puzzle in place, I think what's crucial is improving the usability of Steem apps. @midlet made an excellent post titled The UX Pyramid: The REAL reason Steem is stagnant, in which he/she wrote:

First off. I am a visual designer. I have two degrees in different areas of this field. I have worked as a UI and UX designer in the past although it's not my primary specialization. I teach at the university level about design and visual communication. I can tell you all from the perspective of someone experienced in this, IT'S THE UX.

Read the post. It's really good. (UX means user experience as opposed to UI = user interface). Streamlining onboarding and designing better user experience are key to an explosive growth of the Steem user base after the back end issues have been dealt with, which should be done in the relatively near future.

[Edited to account for a simple error in calculations.]

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Super clear information. Thanks for sharing it with us :)

Per account that translates into 72.6 STEEM per average Steem account per month or 3775 STEEM per year.

Nope, 871.2 steem per year which means Steem needs to be valued at 42.8 USD

Fuck! Never write these in a hurry. Thanks a lot for pointing that out!

Yeah, I've done similar maths before so I knew it was off. 10 would be sweet living for me, but not the average holder/earner.

I was personally more interested in comparison to other social media as I'm less familiar with that kind of thinking. Very neat.

In the last 30 days, I made about 640 STEEM. I won't reveal my salary here but for me to make as much as the median full-time employee here, STEEM would have to at $4.86. If Steem were as good at generating fiat income as Twitter, the 43.3 million new STEEM minted every year would be worth about $210 million. If revenue generated per user were as much as Twitter's, then there'd have to be 22.2 million monthly active users. At Reddit's level, there'd have to be 700 million MAU.

If you ask me whether or not efficient algorithms that data mine the accounts and the visitors to Steem for the purposes of maximizing ad revenue are a good thing, you can imagine the answer. :)

640 Steem a month is a lot. I think that is what I made in my best ever month when I was blogging once a day. I imagine if it got to that price, I would put in more effort but there would also be a lot more competition.

The nice thing about the blockchain is how it equalizes datamining. I can imagine it will be big business when this takes off.

All we need is one amazing front end developer to make something for Steem and we are set. Imagine how amazing SteemPeak could be with 100X the budget and 10000X the daily users. At that point they would deserve ad revenue, but hopefully other income could offset it.

This is such a wonderful time to be earning STEEM. There is less competition and it's much easier to be noticed by the heavy hitters. Even when the price has gone up, the newcomers, however good will have an uphill battle.

I completely agree. It's also a good time to be buying if you have money to spare and want to increase power this way as well.

The only newcomers who will start off well are those with exceptional creative content or who have a following elsewhere. Anyone starting fresh definitely has their work cut out for them, but now is the time to start because people do built networks and connections easier when there is less to distract.

  ·  6 months ago Reveal Comment

I corrected the numbers. The MAU figures needed to be scaled up by a factor of 4.33.

I wonder what it would look like with only factoring in the top 20% of earners, rather than the average across all active. Pareto principle.

Very different. At my current level of STEEM earnings, I would be comfortable at $5 STEEM. For that level to be stable as in non-speculative and not at the mercy of the crypto market, it would may be take something like 20-100 million monthly active users. According to usesteem.com, there are currently only about 250 accounts that earn more than mine.

I'd say that when it comes to significant earnings, only a few percent will have a chance to live only on Steem, but many more could have significant revenue streams, especially from cheaper to live countries.

That's absolutely true. For many in the third world or places like Eastern Europe Steem income can be significant. Steem has about 25,000 daily active accounts. I just looked and realized I'm in the top 1% of all earners on Steem. That doesn't amount to anything even close to life-changing money in our neck of the woods, but it easily could once the crypto markets rally again or when Steem becomes an integral part of transitioning into Web 3.0 in case of a few hundred high-traffic websites. Gratitude is the first thing that comes to mind. It's clear that there are people who own large accounts who appreciate what I do here.

I can help spreading the word here in Brazil. I’m doing that already, actually.
But as you said, UX makes the difference and still is crucial for mass adoption...
I believe poor students could start using steem as a platform to share knowledge and get paid for it. For example: writing some essay about history, sharing with colleagues, and getting some steem for it as a recognition from their efforts.

That’s what they need and steem can offer the solution, easily. They just simply have no idea about it. It’s super simple to spread this idea.

I can help spreading the word here in Brazil. I’m doing that already, actually.
But as you said, UX makes the difference and still is crucial for mass adoption...

Hopefully, after the critical back end stuff is taken care of it will be possible for Steemit, Inc to revamp Steemit perhaps with the help of the community.

I believe poor students could start using steem as a platform to share knowledge and get paid for it. For example: writing some essay about history, sharing with colleagues, and getting some steem for it as a recognition from their efforts.

My wife is a teacher. She has noticed that there is no culture of sharing among her colleagues when it comes to materials they have made themselves. That's a pity because each time extra material is needed, the wheel gets reinvented time and again. It would be ideal to use Steem to reward teachers for creating material.

That’s what they need and steem can offer the solution, easily. They just simply have no idea about it. It’s super simple to spread this idea.

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  ·  6 months ago Reveal Comment

There clearly is more to this than meets the eye! :)

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