People use social apps every day, and despite the hype surrounding so-called “next-generation” blockchains, none of these social apps are decentralized. Let’s unravel why, using two blockchains as a reference: ETH -1.94%-news/">Ethereum and Steem.
Ethereum has more developers than any other general-purpose blockchain, but none of these developers have been able to successfully build social applications for mainstream adoption. Once upon a time, Steem was one of the most widely used blockchains in the world and one of the most used social DApps in the world, reaching an all-time high of $2 billion in market capitalization.
Steem was able to grow at a breakneck pace and attract hundreds of thousands of regular users, but never gained as much developer adoption as Ethereum and ultimately failed to live up to its potential.
Ethereum: The universal blockchain
When building Steem, Ethereum was the only viable blockchain that developers could use to build their DApps without forking and modifying the code of existing blockchains like Bitcoin BTC -1.58%.
Thanks to Ethereum, developers don’t have to build a blockchain from scratch to support some specific application (such as a social network), but just write the code needed by the application and upload it to Ethereum as a “smart contract” blockchain.
Allowing developers to upload code to the blockchain creates endless possibilities, including the possibility of uploading code that uses up all network resources, rendering it useless. Some restrictions must be imposed on this “infinity”. To solve this problem, Vitalik Buterin invented “GAS” – a decentralized system for charging fees for executing code on the blockchain (Ethereum).
Blockchain fees
Ethereum’s fee design is excellent and set the direction for a decade of general blockchain design, with almost every blockchain implementing a different GAS.
The genius of Ethereum is that it offers developers an infinite programming language. GAS creates decentralized restrictions on what developers can do with the language. It is this potential conflict (unlimited vs limited) that explains why there are still no mainstream social DApps on Ethereum.
Free blockchain
Steem developers took a completely different approach than Ethereum. They built a very basic blockchain called Graphene that they could easily convert to a specific social blockchain.
In addition to social features, Steem developers have also experimented with a network usage management system that is fundamentally different from GAS. In short, it’s free.
When Steem was first launched, many people called it a scam, precisely because of its free “bandwidth” system. They argue that since Bitcoin and Ethereum are fee-based, blockchains without fees are bound to fail.
While the system introduced by Steem is far from perfect, by providing social features and allowing users to transact for free, Steem has quickly become one of the most valuable blockchains in the world and the most used blockchain to date.
Smart Contract Rules
To the surprise of many, the reason Steem can’t compete with Ethereum has nothing to do with its free model, which the core developers have refined over the years and still works today.
Steem has never matched Ethereum for the simple reason that Graphene (the blockchain framework it is based on) lacks smart contracts. Graphene makes it easier to start a blockchain with specific features, but it’s by no means “easy”, it’s very difficult to change those features or add new ones, unlike Ethereum, which allows any developer to upload whenever and wherever they want any code.
From this point of view, the solution becomes obvious. If we can combine the free system developed for Steem with the flexibility of the blockchain with smart contracts like Ethereum, we can give developers the best of both worlds, allowing them to create applications that are free to use and feel free to use at any time. Add new features!
