INSTITUTE OF MANAGEMENT,

NIRMA UNIVERSITY
MBA FT 2020-2022

MANAGEMENT INFORMATION SYSTEMS

INDIVIDUAL ASSIGNMENT 1
CASE SUMMARY: STEEMIT: A NEW SOCIAL MEDIA?

Submitted to:
Professor Balakrishnan Unny
Submitted by:
Girish Vasnani – 201419 – (Div D)
Submitted on:
20th December, 2020
 Table of Contents

1. Executive Summary………………………………………..3

2. Situational Analysis………………………………………..4

3. Problem Statement…………………………………………4

4. Identification and Evaluation of problems…………………5

5. The Action Plan………………………………………….....8

6. Reference………………………………………………….11

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Executive Summary

The case revolves around the blockchain-based social media platform which incentivizes or
rather rewards the users with the Steem cryptocurrency for their contribution or activities on the
platform unlike other popular social media platforms. At the core of the steemit lies its
decentralized operations policy and the cryptocurrency based reward system. In Steemit users
could create and share content as blog posts and these posts could get replies, reposts and votes
by other users, and all this user generated data would be stored in the Steem Blockchain and this
data is publicly accessible and difficult to be manipulated. Steemit gained popularity and enjoyed
growth initially due to its unique user oriented policies which promoted their freedom of speech
and rewarded them for their posts and promoted quality content creation. However this growth
was not long enjoyed as there were problems related to the upgradation of servers, misuse of the
decentralized framework and user accounts security. At the core of the steemit lies its
decentralized operations policy and the cryptocurrency based reward system.

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Situational Analysis

In the year 2016, a blockchain-based social media site was introduced which gained popularity
for its user driven policies which promoted freedom of speech and allowed users to post and
share content of their choice unlike other similar social media platforms like Twitter and
Facebook. Users of Steemit could create and share the content of their choice in form of blog
posts which could receive replies, reposts and votes by the other users of the platform. Based on
the number of replies, comments, reposts or votes the users were rewarded with the steem points
and they could earn revenues in form of cryptocurrency. Steemit is based on the Steem
blockchain system which is used to store the user data generated on the site. However, soon the
company started facing issues when the users started misusing the decentralized framework, and
how the user content started being influenced due to the rewards, introduction of a bot network
on the platform, hacked user accounts, instability in the cryptocurrency market, and involvement
of hackers and hacker groups on the site which posed a threat and raised controversy about the
site, to name a few issues. So now with the given situation at hand, the company must decide
how to maintain its position in this competitive scenario and retain its existing users and attract
new users in the long run.

Problem Statement

The central problem in this case revolves majorly around a few problems that have created a
roadblock for the company. Some of the major problems mentioned in this case are related to the
inequality amongst the users, as there are many categories of users and their powers differ
substantially which creates inequalities on the platform, use of vote bots to gain more steem
rewards, major security breaches, sensitive and controversial data and information being illegally
traded on the platform in exchange for other cryptocurrencies and moving forward the company
is looking for strategies to resolve the problem at hand and attract and retain new users on it
platform.

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Identification and Evaluations of Problems

 Censorship

Formerly this was viewed as one of the best reason to use the platform because there was no
censorship on this platform and users were free to post what they liked without any
censorship rules on the network unlike the other social media networks like Facebook or
Twitter. However, soon this started being a big problem for the company as well as the users
as people started using the site for posting illegal content as the instance the hacker group
“TheDarkOverlord” is mentioned in the case where a number of documents related to the
9/11 attacks were leaked on the site, however as the post was taken down from the site, a
group of users were unhappy with the decision since they thought this was against the moto
that steemit believed in with respect to the stand on Freedom of Speech and No Censorship.

From the bloackchain perspective, because there was no censorship on the network, the
disadvantage turned out to be in form where people with botnet could easily spam the entire
steemit network which would eventually lead to the user home pages flooded with the feed
and then end up bloating the blockchain.

With the given problem at hand, the company must decide its take on the point of censorship
and whether to allow users to post freely or not and if they introduce censorship then how
much and what all needs to be checked and how the policies would be revised is a decision
that they need to make and ensure that this does not hamper the user experience of the site
when their motto.

 Steem Power and Inequality

There is a lot of inequality on the platform in terms of some users being powerful than the
others because they owned a very huge amount of Steem Points and these users are described
as the Steem Whales, these are the early users of the steem platform and have gained the
power in all these years. The activity of steem whales significantly affects the activity of
other users on the site and eventually affects their income on the site. These Steem whales

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 must carefully promote quality content and be responsible about their actions on the site
because their interaction with other users affects their popularity and reach noticeably.

Also one of the best parts about the blockchain-based technology is the decentralization and
these Steem Whales seem to hamper the efforts of Steemit towards the implementation of
decentralization because in a way they enjoy more power over other users giving them more
control and power to influence the network.

 The Undesirable Bots

On the Steemit platform, a vast majority of the people are content consumers as compared to
the ones who are the content creators. A lot of people depend on voting to earn the revenues
from the platform by promoting or up voting the other users’ content, but this is where the
unhealthy or rather the undesirable use of Vote Bots comes to the picture when people use
bots to upvote the posts on the platform.

This leads to just the use of bots to earn revenues and completely defeats the purpose of
creating a network where people could express themselves and get rewarded at the same time
for their posts and contribution on the site. This again gives an undue advantage to some
users and is completely unfair; the company must put efforts to make a level playing ground.

 Complex User Interface

Today when the world is moving at such a fast pace and everybody in in a hurry, it is not a
very good idea to ask users to maintain a lot of different passwords, keys and pins for
different activities on the site, to an extent where some of them are irretrievable.

There were different currency systems namely Steem, Steem Power, and Steem Dollars, this
makes it complex for users to manage their account and adds additional complexity.

If the long term objective of the company is to attract new customers then definitely they
must focus their efforts on building a user friendly website interface so that it is easier to
operate the website and not a big task.

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 Security Breaches

As described in the case about the multiple no. of security breaches whereby the customer
data was stolen and the users had lost thousands of dollars and in many instances the entire
site was down for about 25 minutes. The Steemit.com website itself was hacked due to which
they had to immediately shut down the main site itself and it was a threat to the user data.

This is a very big issue as this can be looked as a negative point about the system and the
credibility of the platform comes under question due to these instances. The company must
ensure that the web implementation of their site and ideas is done in a manner keeping a
check on such security breaches which possess a threat to user data and the Steemit
community.

 User Turnover and Accumulation

This point brings with it an underlying problem of the Content Quality as users will not be
posting quality content and would just focus on posting more frequent to get rewarded and
then the quality of content would decline rapidly and this might turn away the new users and
lead to the old users quitting the platform.

The users who might want to join the platform would shy away because of first, the technical
glitches, and second, the not so user friendly experience, third, breach of security, strict
censorship, and lastly low quality content. So Steemit has to focus their efforts on working
on the points where it currently lacks.

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The Action Plan

Moving forward, Steemit needs a strong Action Plan which can be implemented to solve the
problems that now stand as an obstacle to growth. The company definitely needs to modify some
of its policies and work on enhancing the user experience to stand out from the competition and
stay firm on its vision of building an incentivized blockchain-based reward centric social media
platform. Listed below is a plan of action that could help the company in the following situation.

 Limit the Voting Rights

To save the servers from the bots and people using bots to earn greater revenues on steemit,
the company could put a cap on the number of upvotes a user can give in a particular day,
this would ensure that users start appreciating quality content and the servers are bot free so
that the blockchain is not bloated by the spamming. This will help the company boost up the
interests in the general public with respect to their perspective about the platform.

 Decide whether to Introduce Censorship

Steemit must clearly define its stand on censorship and decide whether it has to implement
the Censorship or not, if not then there should be no monitoring or taking down of user posts
by the admins.

If the company decided to introduce censorship then it must redefine the Terms and
Conditions and make it clear to the users citing the basis of upcoming content curation
policies.

It must also ensure that it does not impose too many restrictions on users otherwise they
might just take the exit door but at the same time ensure that mishaps like the
“TheDarkOverlord” could be avoided and ensure that it focuses on building a healthy
community and appreciate and promote the quality content on the site. However the company
at the end needs to take a firm stand on its belief and make sure that they clearly define this
beforehand itself to its users.

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 Expedite the Security Updates

Steemit must focus on bringing security patches in the website and ensure that the servers
and data are protected from hackers or other such groups of people. Providing continuous
upgrades will help the company sail through this problem.

The company must ensure that the servers are functioning well and free from any security
breaches in future, Steemit has to take a proactive stand on this issue.

The company also must try to ensure that users do not face any problems such as losing their
money in a hacker attack or so.

 Build User Friendly Site Interface

Nobody really likes to remember multiple passwords for multiple logins for using a single
site and the company can focus its efforts on creating a user friendly interface for multiple
platforms so that the users appreciate the usefulness of the site and are not hassled by the
strict security checks before logging into the site.

The Company could also create user tutorials and an FAQ page which ensures that the users
have their queries solved immediately instead of spending so much time searching for a
technical fix on the site.

The features also must be made remotely accessible with a single login and the systems
needs to be redesigned and ensure that the complexities are minimized to serve their
customers with the best experience.

 Simplify the Reward Systems

Having gone through the company’s website it is very difficult for new users to understand
how the reward systems work and hoe three different reward systems function, so steemit
needs to simplify their rewards system.

The company can also focus on having a guide to the rewards systems which could help
users understand how the steem rewards work and they could accordingly direct their actions
towards maximizing rewards and appreciating the posts at the same time.

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 Maintain the balance of Steem Power

The power equation at Steemit.com has to be balanced with immediate effect so that the
Steem Whales do not eat up the steem fishes in the Steemit.com pond. The dominance and
control of these users must be taken away in a way by introducing new restrictions
proportionate to certain frameworks.

This will help steemit.com in attracting the new users and then help on building the
decentralized blockchain-based website. It could limit the content being promoted by whales
and try to narrow down the gap between the old users and new users in terms of the power
they have to influence the users posting on the site.

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References

 Casadesus-Masanell, R., White, A., & Elterman, K. (2019, December 19). Steemit: A New Social
Media? Harvard Business Review, pp. 1-34.
 Koetsier, J. (2020, October 25). Social Censorship: Should Social Media’s Policy Be Free Speech?
Retrieved from Forbes:
https://www.forbes.com/sites/johnkoetsier/2020/10/25/social-censorship-should-social-medias-
policy-be-free-speech/?sh=30df85d2489a
 Leeway Hurtz – Blockchain Based Social Media Platforms
https://www.leewayhertz.com/blockchain-social-media-platforms/

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