Actually, you probably could have stopped with "it seems that social platform projects will inevitably fail."
Statistically, we can observe that to be true.
But as regards social platform projects that leverage the steem blockchain is a backend database – yes, they really need to extract value in some way other than the distribution of the reward pool because the distribution of the reward pool is purely done by proof of stake, which means that it is purely divided up by the actions of those who have the most stake already with out concern for anyone who has lesser stake. And why should they?
Even more elementally than that, the reward pool is entirely constructed of inflationary value. Everything in the reward pool at every moment of distribution is truly money being printed from nothing, if you accept that steem is a cryptocurrency. It is declared mechanically as the inflationary increase in the number of tokens per unit of time, and it is literally the rate at which tokens that you already hold become less valuable.
Which is a long, roundabout way of saying that distributing that inflationary currency by way of waiting the votes of those who already have proven stake has an inevitable outcome. The only way that new stakeholders can find value in relation to currencies which people will actually let you spend on their goods is for the demand to increase faster than the inflationary rate/reward pool.
In order to do that, services need to offer something to an individual user of more value than the steem crypto-commodity itself. Something which inevitably offsets the lack of privacy afforded to a public blockchain as well, let us not forget.
"You might get paid a little bit" is not going to be sufficient to maintain a social network. It might barely be sufficient to maintain a platform, but it is entirely the wrong approach to building a social network. The shock is not to that steem as a social network exists because of it, the shock is that steem is a social network exists despite that being the major pitch for the entire system for the last two years.
Is the collapse of the steem blockchain inevitable?
Was the collapse of MySpace inevitable? In a sense, yes. The same dynamics in many ways are at play. Except that steem as a social networking platform was never popular, certainly not to the level that MySpace was.
Maybe, if we get very lucky, after the current wave of state interest in ridiculously overreaching regulation of crypto-commodities dies down a little, the market as a whole will recover and a rising tide lifts all boats. But it's only functional so far as that tide lifts faster than the combination of social media disinterest and actual fiat trade value counter one another. When one of those two stops being an exceedingly useful pillar, the whole architecture collapses.
I would make the argument that all blockchains generate value through hucksterism. And they do so less transparently than fiat currencies generate value through hucksterism. It's certainly possible that SMT projects will generate value through attracting interest in the steem blockchain, and some of that will be purely marketing and emotional manipulation. It's also possible that one of the SMT projects will actually be put forward by people who understand gamification, social network design, social media, and UI engineering.
Possible.
I wouldn't hold my breath, but I would keep my eye open. Just one.
From the start, I understood that Steemit was not expected to be, or even designed to be, the value generator for the Steem blockchain. Promising to pay people a little bit did produce enough transactions to demonstrate the speed and reliability of the Steem blockchain, as the developers intended.
I did like that posting on Steemit allowed me to accumulate SP, as a way to be part of whatever would emerge as 'the thing with value'. I looked forward to watching, and being part of, the evolution of an interesting ecosystem. I really want to see a project that works. You said:
I want to see what something like that is. I don't have an understanding of what that would look like - that's not in my background or experience at all. So I will keep an eye open, for sure.
I'm not too proud to say that I might enjoy earning a little money, but I think it might be a little disingenuous to say that Steemit was not expected to be or designed to be the value generator for the steem blockchain. The white paper is pretty clear, the blue paper at be clear – all of it indicates that the creators knew that Steemit had to be a solid proof of concept and ultimately probably the heavy lifter for value and delivering value. Hand in hand is the obvious understanding and expectation that offering to pay people is one of the best ways to get people to show up.
The thing is that SP is, in and of itself, not actually being a part of "the thing with value." It's proof of stake so that you can get more stake, and that's the only purpose it has. In exchange for that stake, the steem blockchain effectively locks up crypto-commodity that you've earned/bought for 13 weeks as trade-off for that leverage.
It's a terrible deal for anyone that wants to earn a living via the sort of mechanism because it puts you in the terrible bind of first doing the work of being successful and then having to choose between being a "bigger part of the community" in a mechanical sense or taking that success in currency out of the network to do silly things like buying food and paying to sleep indoors.
It's great for investors. It's even reasonably good for media consumers. It's a rough row to hoe for media creators who have a broad appeal and a near impossible one for media creators who work in a niche.
Ultimately, I really want to see a project that works – mainly because I like to see things that work.
I do know (in a rough sort of way) what sort of architecture it would take to have a successful social media platform. The core of that experience, however, focuses on the individual and providing them a good feedback loop, delivering them media that they want to experience or access to an audience that wants the media that they create. It would have to manifestly avoid the belief that consensus determines value as opposed to simply reward.
That flies directly in the face of the philosophy that the steem blockchain is based on, so you can see where if there might be some problems if one wanted to expect such a thing to come to be.
Until then, however, we'll just have to see how things go.