Enabling a Steem-based alternative to Patreon through light accounts
Nothing I can think of would bring more value to Steem than having a Steem-based alternative to Patreon that is well integrated with condenser.
Not only would it bring a lot of value in and off itself, but it would also serve as an important building block to make Steem a more attractive platform that solves relevant problems for content creators out there looking for alternatives to the broken platforms they've currently got. Without trying to over-exaggerate anything, but simply wanting to stress how big I think this could be, I strongly believe this rather simple edition would add more long-term value to Steem than the aggregated set of values brought by Smart Media Tokens.
Patreon is the service that creators in the demographic most relevant to Steem currently rely on for content monetization (creators facing demonetization, those who don't want to rely on ads, or anyone wanting to give up less of their potential profits in fees). This fact alone makes it easy to "sell" when pitching Steem to creators out there, as most already understand the benefits of such a service as opposed to the burden of needing to explain how the rewards pool on Steem works. Better yet, Steem's core value propositions just happen to also solve the two biggest weaknesses that Patreon still have from the point of view of the creators:
- Patreon is still centralized and occasionally ban users, thus adding risk to creators that would not exist on Steem.
- Patreon charges a large fee on transactions and subscriptions, thus adding a direct opportunity cost to the creators when compared to an alternative without fees.
Thus, from the point of view of making Steem more attractive to creators to use, this would allow Steem to provide a better option at the very core of what most creators care about the most.
Benefits to Steem
From the point of view of Steem's growth as a platform, it is also in dire need of monetization options that do not rely on the reward pool and stake-based voting. Again, there are many reasons for this:
Inflation is not sustainable long term as the main source of rewards nor will it always be here with the decreasing inflation.
Creators need ways to monetize that do not depend on the whims of whale votes, but rather the loyal support of content consumers whom their contributions valuable and supporting.
Steem needs monetization options for creators that scale with the number of content consumers and followers that they have. This in order to motivate going outside of the Steem bubble, to share content and to make other actions to grow their following. This is, unfortunately, opposite to the current system on Steem that does not reward users at all for growing their following, but instead motivates them to only share their content with those who are already on Steem and have Steem Power to vote with. Resulting in no network effect at all for Steem.
A Patreon like model requires no additional explanation and leaves no impression of a "Ponzi scheme" or unreliable/unproven economic model the way that the current inflation-based reward pool allocated by stake-based voting does. Having this as an alternative will make the onboarding of more serious content creators much easier.
Unlike inflation-based rewards, a Patreon system will actually make external visitors buy STEEM and use RCs to make transactions. Thus bringing value to the token.
I don't think it can be stressed enough how important such an addition, as well as other alternative monetization options independent of the inflation-based reward pool that instead capture and distribute external value generated from web traffic and engagement, is for Steem. It really is the one thing I believe everyone ought to be working to add at this moment in time if we want to turn the current reputation of Steem and the market price of STEEM around. I would therefore highly encourage anyone who can look at this proposal, and who believes they have what it takes to build an open-sourced solution for condenser, to take the time to make a serious SPS proposal for it.
So why doesn't this exist already?
The main obstacle to make this work right now is the fact that users looking to support a creator through such a Patreon model would need to give their Active key to a third-party app in order to continuously pay their monthly subscription. Of course, it is not recommended that anybody does this with their main account as it can also be used to initiate power downs of Steem Power or irreversibly send away liquid funds. This means, that the backer would either need to verify a transaction themselves once every month to keep their support going, or trust their Active key to a third party. Neither are ideal options.
This is where light account come into play. Steem light accounts, as described by Steemit Inc will be a basic Steem account that only provides the features needed to use a wallet. Thus, it will require fewer resource credits to operate and be a lot cheaper (if not free) to create. Such an account would be perfect for subscriptions. Anyone interested in making subscriptions to a Patreon-like service would simply have a light account controlled by its own Active key containing only a limited amount of liquid STEEM at any point in time.
The practical outcome would be a bit similar to carrying an additional credit only card, as I am sure most of us do. Everyone is already familiar with how leaving a card with a limited balance in the bar is far safer than giving away your main debit Visa card. Light accounts could be used in a similar way across many different Steem apps and websites, as I'll get to later.
I propose that with the arrival of light accounts, we also introduce an option in the Steemit wallet to create a new "spending account". This would take away the confusion of needing to create a separate Steem account and serve an additional purpose as an incentive to hold Steem Power to "unlock" such additional features when gaining the required RCs to operate it. Anu user with enough Steem Power will then have the option to create a "spending account" with the click of a button after having saved their new Active key (which I also think should be renamed "wallet key". But that's another discussion). The UI would then also provide some minimalistic information about why having a spending account with limited funds might be a good idea for anyone looking to make transactions. For user experience purposes, it would be best if the light account, although technically a separate Steem account, would still feel like an extension of their main account, or just a separate wallet that can be accessed on the same page as their main account (aka the account of the light account creator).
Having such a spending account would make sense not just for subscriptions but for third party apps that want to allow transactions without the enormous security risks involved with handling the Active keep of a user's main account. Indeed it should be essential for a currency like STEEM, whose competitive advantage is the fact that it is fast and feeless, to do everything to ensure that users actually want to use it for transactions, and not avoid it. We want hundreds and thousands of websites out there that implement STEEM tipping services, subscriptions, merch-stores that accept STEEM on-site, etc. By instead having a "spending account", users can be more liberal in their use of services that require an Active key without the risk of giving away any access to their main account. Again, this will also be useful for any services looking to accept smaller payments for which Steem is meant to excel.
By having such "spending accounts" in place that is a well-integrated part of the normal user experience, it suddenly becomes very easy to provide a Patreon-like system. Now if you want to support a creator with let's say 10SBD per month, then you could sign up to be a "backer" with the Active key of your spending account and leave something like 20 or 30 SBD in its balance. Condenser could then give you a notification whenever you need to add more tokens to the balance account to continue your subscription. By having it integrated with your main account, the person you're backing or the community front end will also easily recognize its connection to your social account and provide it with optional permissions or privileges. Much cleaner than sending a transaction from the Steemit wallet with a unique memo.
Third party standard
I would also hope that this could open for a whole new standard for apps on Steem looking to enable payment services or otherwise accept STEEM/SBD. What I imagine is a trusted payment option similar to Steemconnect that on purpose only accepts Active keys that are associated with a Light account / "spending account". This would open for a higher level of security while at the same time providing high levels of convenience to users who want to make purchases with the fast and feeless currency that we have!
I look forward to further discussions about the potential obstacles as well as the potential of such an addiction to our blockchain. And I hope that anyone who reads this and are capable of building any of the required building blocks needed to bring this vision to life will consider doing so.
I would love to see a team of the come together to create such a proposal. Imo, it would be well worth funding north of 300 SBD per day, and I would do anything in my power to help it get the funding that it needs and deserves!
Fredrik / @fredrikaa