I've been on Steemit for 7 months and yesterday was the first time I read the Steem Whitepaper.

Why did I wait so long?

It's 44 pages long.

I read a lot but 44 pages of ultra dry material seemed like a huge time investment. I opened the Steem Whitepaper many times, maybe 5 or more times, but I closed the .pdf files after seeing the 44 pages length.

The Steem Whitepaper For Dummies series is my 2017 Roadmap contribution to help newbies understand and want to stay in the Steem ecosystem. I will attempt to explain the Steem Whitepaper in the most basic, easy-to-understand way, in small digestible bits. Each post will contain only one topic.

Our first topic is the Payout Distribution.

It's the most controversial and most difficult aspect of our shared experiences here. Well, it's only controversial if you happen to among the vast majority of users who don't see big payouts on your posts. It's the cause of anger, joy, disappointment, depression, quitting, retention, rage, euphoria, flagging, and every emotion in between. Very few people are not affected by it. But they do exist, and they are strange and wonderful beings.

Let's look at a passage from the Steem Whitepaper about the Payout Distribution:

The actual distribution will depend upon the voting patterns of users, but we suspect that the vast majority of the rewards will be distributed to the most popular content...

The impact of this voting and payout distribution is to offer large bounties for good content while still rewarding smaller players for their long-tail contribution. The economic effect of this is similar to a lottery where people over-estimate their probability of getting votes and thus do more work than the expected value of their reward and thereby maximize the total amount of work performed in service of the community. The fact that everyone “wins something” plays on the same psychology that casinos use to keep people gambling. In other words, small rewards help reinforce the idea that it is
possible to earn bigger rewards. -Steem Whitepaper

Zipf's law is mentioned in here. I will get to that in a different post because it requires its own space for digestion.

A few sentences jumped out at me:

"Vast majority of the rewards will be distributed to the most popular content."
"Large bounties for good content"
"The fact that everyone "wins something" plays on the same psychology that casinos use to keep people gambling."

Wait! Did the Whitepaper just say that the payout distribution is using the same psychology as a casino?

[The usage of a casino metaphor is not literal. Steemit is not an actual casino (calm down Steemitophiles). Art uses metaphors to describe subjective feelings on the part of humans. It's a language like that of dreams, and it reflects a subjective experience. Art is the opposite of hard data for it relies on human impressions to form its existence.]

That would explain why I keep observing users describe symptoms of "Steem Gloom", "I'm thinking of quitting" and "I need to take a Steemit vacation". These are classic symptoms of addiction. But Steemit has so far only addicted certain kinds of people.

Here's what appeared to my imagination when I thought about Steemit as a casino and many of us are sitting at the bar, having Steem drinks, getting drunk, hungover or excited, or somewhere in the various stages of gambling addiction:

Our Steem bar is represented by the keyboard and dice

Some have found their purpose in Steemit and others have been ostracized. Some have become optimistic outsiders while others have embraced the system in a cult-like frenzy. A few are besides themselves with exuberance while others are like ghosts with empty glasses, about to silently and depressingly quit Steemit without a farewell party.

The big Steem Power holders are really the only ones who are able to give sizable payouts to bloggers.

This was done in order to protect the system from abuse. The thinking is, those who have invested more time/money into the community, should exert a greater influence on the direction of the rewards. In essence, they control the flow of money in Steemit. If you're at odds with those who have power in Steemit, you're very likely not going to stick around. While I think the system makes sense for those in power, I feel that it doesn't make sense for newbies or more critical or controversial types.

That's why "popular content" is not really described accurately in the Whitepaper. A more accurate description would be "popular content according to Steemit's power holders". If you're a blogger who has 1000 followers who are all minnows and who continually vote for your posts, you're not guaranteed to make a large payout. Your content may be really "popular" but unless your posts are liked by the Steem Power holders, you will not be rewarded with a decent payout.

Steemit is much more like a Kingdom than a collection of microcommunities.

This is the reason people get addicted to Steemit and it could be the main reason people get disillusioned and ragequit also. The perception of "unfair rewards" is a big reason that many of my friends have left Steemit. I'll explain how I deal with these negative emotions shortly.

Emotionally, people don't like to think of themselves as "smaller players [getting peanuts] for their long-tail contribution."

Human nature does not handle inequality well, especially when it's transparently known. The fact that the overwhelming majority will receive very little while the power-holder-defined bloggers receive massive payouts is the primary reason there will always be wars and division in Steemit. It's very similar to a survival of the fittest game with subjective popularity being the most attractive quality to possess. It's harsh environment will repel most level-headed mainstream individuals but it's an evolving game and could attract them in the future.

• Understand that you and I are guinea pigs in a new social media experiment.
• Steemit is a bootstrapped social media platform that is evolving based on user feedback.
• Steemit is a petri dish of ideas, none of which are perfect.
• Steemit is not fair.
• Steemit will never be fair.
• Best thing you can do is create extremely high-value, authentic content, suitable for publishing in the New York Times.
• If the current whales don't upvote your extremely high value content now, then perhaps the next crop in the future will.
• Challenge yourself to create enormous value for others. If you help one person, you have succeeded in here.
• If the current payout distribution model bothers you, ignore it. Maybe it will be adjusted based on user feedback in the future.

All artwork besides the graph was created by @stellabelle