INSTITUTE OF MANAGEMENT,

NIRMA UNIVERSITY

MBA-FT (2020-22)
Management Information Systems

Individual Assignment - I

“Steemit : A new Social Media?”

Submitted By: Anshuman Singh Deora

Roll No: 201107
Section A

Submitted To: - Prof. Neil Harwani

Date of Submission – 20th December, 2020

 ACKNOWLEDGEMENT

I would begin by expressing my deepest gratitude and appreciation to Institute of Management,

Nirma University for providing an opportunity of studying the subject Management
Information Systems as a part of my course. This subject has enhanced my purview and
understanding of Information Systemas it is one of the major tools available to business
managers for achieving operational excellence, developing new products and services, improving
decision making and achieving competitive advantage in organizations and various other
dynamics related to it. I consider myself very fortunate for the same. I am also very grateful to
Prof. Neil Harwanifor being the facilitator of this course and for providing me with a platform
to understand real-life cases of big industries and known businesses which has helped me to
understand the aspects of Information System. I would also like to thank them for their extensive
guidance and support throughout the making of this report. Their valuable insights based on their
rich experience have helped me to analyse the companies in a successful manner.

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 Executive Summary

The case talks about the Steemit, a one kind of incentivised social media platform that uses
blockchain and gives monetary rewards like steem cryptocurrency to the users for sharing the
information or views on their platform. The reward was in three different forms like Steem,
Steem Power(SP) and Steem Dollars(SBD). It Started off a few years back and having faster
growth over a small period of time due to its unique freedom of speech stance, the company is
currently facing some issues including the ones related to content curation, misuse of
centralized power and users’ accounts getting hacked. This case review analyses the problems
that the company is facing and tries to come up with effective solutions that can help Steemit
in the long run in order to maintain its good and healthy image in the market and to attract other
new users and retain older users. Major solutions discussed are about content curation rules in
Terms of Service, continuous server security upgrades and making it more user friendly and
gave fair and equal opportunity to every user in the steemit to grow and earn steemit rewards
according to their posts.

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 Situation Analysis

Steemit, a blockchain-based social media platform was launched in 2016, and became famous
for its stance on freedom of speech and sharing their views on social media platforms, thereby
letting users post as they wish, unlike other platforms like Twitter and Facebook. The users of
posts were rewarded by votes and comments by other users, which helped them earn Steem
points and other cryptocurrency rewards. Due to the inherent ways of blockchain, all the
accounts, their posts and their cryptocurrencies are fairly secure worldwide. However, in recent
past, the company is in dilemma about deciding long-term competitive strategies to attract and
maintain users, due to issues like hacked accounts, volatility of cryptocurrency market,
security issues and selective curation of content – including a post of “TheDarkOverlord”
hackers’ group regarding thousands of leaked 9/11 attack documents – and other unfair
practices on the platform. Moreover, other social media giants like Twitter are emerging as
potential competitors in the selectively-curated content space. So, the company must analyze
all their problems and issues and take effective steps to solve them to ensure its long-term
conectivity to its users and continue its business model in the upcoming competitive scenario
with other social media platforms during this technological time.

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1. Identification of Main Issues/ Problems

 The steemit users find it complex while using it as it’s not so user friendly and hard to
attract the new users. The complexity of Steemit’s three financial functions like
steem, Steem Power and Steem Dollar are difficult to know their usage. The steemit
also provide one time user password which is master key of your account after that
you can’t retrieve your password if forgot or misplaced.

 The other issues that came infront by the cases that the hacker group “the Dark
overload” use to leaked thousands of information regarding 9/11 attack so that to earn
bitcoin from the public. But, the steemit developer name “jredbread” banned that
hacker to post such content on its site. As many Steemit users betrayed the ban used
to impose on the hacker and said it’s anti-censorship and anti-regulation stance.

 The steemit developers should bring the balance between crowd sourced and
centralized curation. The many new steemit users claim that the moderators are
providing the users post to upvote their views and information and helping them to
grow and earn rewards. These steem Power(called “steam whale”) use to increase
their influence and content on steemit and put downvote reported posts of other users.
This is more of objectionable and against the standard of any social media platform as
steemit is decentralized so such unfair activity goes on and benefits are also been to
the founders.

 The security is also main concern in the steemit as hackers gained the access of more
than 200 users and stole the steem dollars of worth $85000. As these users are those
who created their account by Facebook or Reddit. The steemit gave money back to
the affected users and asked them to change the password. The hacker used the bittrex
trading portal to transfer the funds. Later the steemit use to suspend the trading from
bittrex and started the investigation. After this incident the steemit went to DDoS

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 attack by the hackers in response the steemit shut down it servers for security
upgrade.

 In early 2018, the steemit value reached at a peak of $7.31 which later came down to
$0.41 by early 2019 in January. This hit hard by the Steemit users and the founder as
the value of cryptocurrency was going down and the bitcoin value fell more than 70%
in the market. In realetd to the cryptocurrency many other faces loses and forced to
lay off their workplaces.

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2. Analysis and Evaluation of Main Issues/ Problem

 Inequality of Users and Snowball Effect :- There was an inequality in steemit users
as it was not fully decentralized so that the users which use to have more steem points
often called Steem Power (called a “Steem Whale”), their votes and other interactions
on steemit affect the content. These users decide about which posts should be
rewarded more and likely to be upvoted. The snowball effect also determines that the
powerful users give direct benefits to the founders of steemit to increase their reach of
popularity of posts, which directly affect the income of the users.

 Vote bots and Incubators: - the vote bots are significantly created by the large users
of steem power, they use to pay others users to upvotes their posts and use to
exchange large steem rewards. They misuse their power by promoting the posts of
other users and exchange the steem rewards. Likewise the steemit also gain the users
of “incubators”, its the similar strategy like vote bots, they use to earn by sharing
monthly by increasing reach of the posts and providing upvotes and in exchange use
to get certain amount of rewards for promote and guides.

 Not User Friendly: - If the new user joins the steemit than he use to remember his
password as it can’t be changed or retrieved once forgot. The users also face
difficulty in finding the contents of their likes and interests after the limited numbers
of searchable tags. It doesn;t show the about which account you are followed while
commenting and liking the posts. Further this issue was to be resolved by a beta
version of steemit communities on shared interests.

 Hacking of Accounts: - In the recent past, 200 Steemit accounts were hacked and
$85,000 worth of cryptocurrency was stolen from users’ accounts by a hacker who
infiltrated the vulnerabilities of the browsers of users that created their accounts via
Facebook or Reddit. Though Steemit issued full refund to all the victim users and told
them to change their passwords. They also took necessary measures like launching an

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 investigation against the hacker and upgrading their servers’ security, such incidents
are likely to cause insecurity among the users about their wallets, which further
negatively affects the user experience, and thereby reducing the attractiveness of
Steemit in front of new users.

 Volatility of cryptocurrency market :- In early 2018, the value of single steem token
reached at a peak of $7.31 which further sunk to $0.41 in early 2019. Because the value of
Bitcoin has felt more than 70% in the market. The value of all the cryptocurrencies, including
Steemit had the recent crash in the cryptocurrency market that adversely affected all the
related professions in Bitcoin like mining as well exchange ( Bitmain, Huobi). Due to this,
many users also lost the majority of the value invested in Steem and other bitcoins during the
massive fall in 2019.

 Lack of Norms in Term of Service and Censorship This is a major one, especially due
to the recent incident the case talks about, in which early 2019 a Steemit developer with
username “jredbeard” took down an announcement post by a hacker group named
“TheDarkOverlord”, leaked thousands of information regarding 9/11 terrorist attack. The
basis of the takedown was cited as “violation of Terms and Services”. However, this move was
condemned by the loyal users of Steemit, as they believed that it was clearly against the
freedom of speech and sharing their views in stance of Steemit, although not against the
Terms of Service. Steem users felt that betrayed by the ban, as it’s against the steemit
censorship and anti- regulations.

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3. Effective Solution/ Strategies

 Developing user-friendly interface: - The Steemit should bring the user friendly
platform for their users. As the steemit users finds its so complex as the password
can’t be recovered later and the three financial process of steem, steem Power and
steem dollar, many users didn’t know how to access such financial transaction while
getting earned through their posts.

 Update Security as per the Requirement:- Instead of waiting for things to go

wrong and hackers are getting benefitted by hacking the account of many steemit
users. The steemit should provide better security upgrades to the users, steemit must
provide regular and continuous upgrades to it. After the hackers attempt first time and
later they tried DDoS, it created a major change in the security in the server systems.
As the traffic goes down on the site they should likely update their systems according
to it. This step will make less vulnerabilities in the servers and the developers will
always be ahead from the hackers.

 Control Votebots and Incurabtors :- The steemit should control over the access of
rise in accounts of “vote bot”. The users with many steem power points use to benefit
by providing the steem rewards for upvote their posts and earn more steem power
points. This activity should be suspended and fair chances should be given to all the
users. The new users didn’t get many rewards as the steem powers users use their
rewards to increase their posts and downvote other user’s post.

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4. Links to Course Reading and Additional Research

 In social media platforms such as Reddit and Quora have access to owns the
complete data and post generated by users on their websites. In Steemit, its not
only open sources at the front-end and the back-end of Steem-blockchain , this
makes all its data in the blockchain for public and other user access . Rather than
functioning as a single entity, the Steemit is a platform that is operated by a group
of 21 witnesses elected by its users. Any user in Steemit can run system server,
install the Steem blockchain and get it synchronize with the blockchain data in the
latest block. The user can become a witness member and have a chance to operate
the Steem website and earn the producer rewards if he or she can gather great
support from the electors to be a part of the 21-member witness group.

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