Raiblocks (XRB) is a cryptocurrency which I thought was the same as Steem with instant, feeless, and scalable transactions when I first saw it. Including low-energy requirements, this simple set of features are in my opinion, desirable. Just can't think of a future where this is not the standard.

It wasn't until @anyx mentioned about it during Steemfest² that I decided to take a look at it again for the second time. Bought some after reading the abstract and conclusion of the whitepaper. It's just a simple cryptocurrency that aims to solve Bitcoin's issues as a currency. It's fast, feeless, and minerless. It's also capable of scaling up right away.

In this paper we presented the framework for a trustless, feeless, low-latency cryptocurrency that utilizes a novel blocklattice structure and delegated Proof of Stake voting. The network requires minimal resources, no high-power mining hardware, and can process high transaction throughput. All of this is achieved by having individual blockchains for each account, eliminating access issues and inefficiencies of a global data-structure. We identified possible attack vectors on the system and presented arguments on how RaiBlocks is resistant to these forms of attacks.

The price went up 10 times a couple of weeks later and I began thinking, okay, maybe Raiblocks' zen-like functionality and design is a great plus point for a pure currency. People know what they're getting into right away. No cluttered marketing for investors and users alike.

So it went up about 200 times in just 2 months. It's a good testament to the soundness of Delegated Proof-of-Stake architectures. Steem is pretty similar as well that it also provides quick and free transactions. But why did this thing go up quicker than Steem? I'd venture the following reasons:-

• Raiblocks has a simple function and message going for it.
• Might be capable of scaling up to the size of Internet-of-Things as well.
• Easy for exchanges to set up nodes for quick confirmation times. (although contestable, since there's only a couple of not very popular exchanges dealing with XRB at the moment)
• Fixed finite supply.

Okay, so how is Steem different? It's also has fast, free, and scalable transactions. It's not quite as instant and scalable like Raiblocks, but you get what I mean. It's capable of supporting a public content platform and the massive amounts of transactions that happen in a social network. According to https://blocktivity.info, it has been the highest performing blockchain compared to the rest. In order to appreciate the difference, let's first understand more about Raiblocks.

What does it mean to hold Raiblocks (XRB)?

This is a simple currency which was entirely pre-mined via CAPTCHA faucets. The supply is fixed and ownership is fairly distributed. This means there's no one party that owns too many "free" XRBs, and they would need to spend money to acquire more. Since there's no inflation and overhead costs involved, there's a good chance that it's not a currency that will devalue over time. These parts in their FAQ section says it best:-

RaiBlocks secure’s it’s ledger via delegated proof of stake (dPoS). In order to perform malicious actions on the RaiBlocks block-lattice, an attacker would have to posses >50% of the online voting power. Such an attack would spoil their large financial investment, and as such not an attractive option. The dPoS of RaiBlocks consumes minimal energy, allowing full-nodes to run on inexpensive, low-power hardware.

RaiBlocks’ focus is on reliable, quick peer-to-peer payments and rapid exchange transfers for arbitrage.

The entire concept of programs executing on top of the Ethereum Virtual Machine is something RaiBlocks doesn't attempt to replicate. The part we focus on is an efficient transfer of value i.e. purely a currency, so while Ethereum requires miners and electricity input which is paid for by devaluing the currency, RaiBlocks has no fees and no devaluing while operating.

Holding Raiblocks doesn't earn you more Raiblocks, nor does it have a vested form such as Raiblocks Power. The network already has a fixed supply and doesn't create new ones. There's just no concept of mining. There are no workers to pay off. It's a "stable" product.

What does it mean to hold Steem?

At its surface, Steem is pretty much the same as Raiblocks when it comes to their use as a currency. They're comparable in performance from a first person point-of-view. I've tried transacting decent amounts on both networks before. Equally quick and reliable. However, it's important to notice that Steem has a decaying-inflationary protocol. The inflation rate reduces every year until Steem has about 2.5 times more total supply in 20 years.

Now, if you look on https://coinmarketcap.com, you'd notice that Raiblocks is worth about 2.5 times more than Steem's market capitalisation. This is a sensible benchmark valuation that accounts for both Raiblocks' fixed supply vs. Steem's long-term supply.

A pessimist will do much better just holding Raiblocks instead of Steem. But Steem could be a better hold if you believe that Steem's inflation works in bringing in more value and user adoption for the network in the future. However, that's not all for Steem. You can actually hedge against Steem's inflation if you convert your Steem into Steem Power.

What does it mean to hold Steem Power?

The more Steem Power you have, the better your earning power on the network. You can earn more Steem just by having more Steem Power. All you have to do is just contribute work on the platform by posting and voting. It's a good hedge against Steem's inflationary protocol, so it's definitely a great hold if you believe in Steem's future and the network effects that it can generate. Even better if you're actively using the platform.

Steem Power is like a powerful game-item in an online role playing game, and that might have value on its own. Here's a longer post on it. But wait, there's also Steem-Backed Dollars!

What does it mean to hold Steem-Backed Dollars?

SBDs has been a peculiar coin in the Steem ecosystem. It's a coin that is only generated for author payouts (which is part of the inflation). It is also limited in quantity. Like Steem, it has all the same features for fast and free transactions. Theoretically, it's a currency that should be pegged to $1 USD by the market. However, we've been seeing traders pushing up the price to ~$10 USD for the past couple of weeks. It's not something that I would hold as I just treat it as a vestigial currency that I'll sell right away for more Steem Power (or something else).

How about the market potential of Raiblocks & Steem?

The future of currencies are both instant and free-to-transact, or at least half of the market should be swayed into this path. This quality enables the inclusion of all kinds of transactions, including micropayments. Personally, I think Steem's inflation and rewards distribution mechanism provides an edge over Raiblocks when it comes to user adoption. So holding Steem or Steem Power might prove to be more beneficial over the long-run.

Raiblocks might be easier to set up for exchanges due to its simplicity. It might also end up being widely used for IoT microtransactions. Personally, I believe Steem's market (attention, social, and gaming) occupies just as much capital as the IoT market, at least in the meantime. The value in IoT transactions are still largely speculative, in my opinion, although it could very well dominate the markets once it matures.

Raiblocks' price seems to be peaking at its rally at the moment. Without inflation to cater for a DAO-like structure for the network, I think the pump experienced by Raiblocks at the moment will unlikely sustain itself over the long-run until it has major backing from exchanges and corporations like IOTA. Well, Raiblocks vs. IOTA is another different matter. Here's an article on it: https://hackernoon.com/iota-vs-raiblocks-413679bb4c3e

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Conclusion

Personally, I think protocols that are based on fixed-supply like Raiblocks and IOTA should consider tapping into Steem and Smart Media Tokens as a rewards distribution mechanism add-on for their communities. The velocity of money is an integral part of adoption. This is why I'm still into Steem (mostly in form of Steem Power) more than Raiblocks and IOTA:-

• Steem is also quick and free-to-transact (although might not be suited for IoT stuff at all).
• Steem Power provides me some hedge against Steem's inflation.
• Steem Power provides me with more influence on this social network.
• Plenty of applications being built on top of Steem.
• Steem's Smart Media Tokens protocol might generate more demand for Steem.
• I believe that Steem's inflation, 24/7 rewards distribution, and community-driven experience will generate better growth, leading to mass adoption.

There's not much going on with Raiblocks' ecosystem and adoption at the moment, although it might get listed on Binance soon (here's the voting page, link will expire soon: https://www.binance.com/vote.html) which may provide a good boost, but still largely speculative. Also, I suspect that Steem's recent price increase was partly contributed by more market attention looking into fast and free transaction coins, thanks to Raiblocks' clear and concise marketing.

Verdict: If you like to just buy and hold without doing much, Raiblocks might be a good option although maybe not at the moment. But if you like to actively use your currency and participate in the network, then Steem / Steem Power is a much better option. Both of these protocols offer quick and free transactions. Steem might not be engineered for the size of IoT markets, but it should be able to scale up to the realm of social networks. So if you're somehow itching for Raiblocks, I think it might be best to just sit out and see if it survives the recent major pump. Part of the capital might flow to Steem instead.

Regardless, I think any protocols that serve as platforms for quick and free transactions are a necessary part of the future. But there's just no way of telling which will stay for the long-term, although part of why I like Steem is that has the edge of user adoption.

Resources

Raiblock's whitepaper: https://raiblocks.net/media/RaiBlocks_Whitepaper__English.pdf
Steem's whitepaper: https://steem.io/SteemWhitePaper.pdf
Steem's bluepaper: https://steem.io/steem-bluepaper.pdf

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_{This is not to be taken as financial advice.}