Would steem be good at being "money"?
Surely we have amazing technological advantages, such as our superior transaction times, already a product that's working and the list goes on and on. But what exactly makes us so firmly believe that steem will succeed compared to other cryptos, fiat money or even gold out there? to become a reliable currency that people comfortably can use as "money" and maybe even as a storage of wealth?
After being in discussion with a bunch of Swedish people 2500m up in a mountain hut we ended up to discuss steem, bitcoin, and fiat money, I could not help but wonder...
The strongest part of a currency is being money.
I think we should not forget that a cryptocurrency is in fact... a currency. This is something we easily can forget in the storms of utility tokens and all kind of projects going on inside the blockchain.
While all the imaginary things we can think of using the blockchain for, the true adoption and selling point is if the masses will choose to use cryptocurrency as "money." Something that is much needed in some countries where believing in the governments' financial skills could mean disaster and where the fiat money you have might turn into dust at any moment.
Also why I believe coins such as Dash that already are applying an effect on the real world should be seen as a strong contender when it comes to the question "what cryptocurrencies will survive". Recently I read an article about Dash starting to get adopted by merchants for an alternative and convenient way of trading than their own countries fiat money. When we are looking what cryptocurrencies would be surviving, those that actually are seeing real-world use could indicate the long-term success.
If you look at bitcoin, what is bitcoin exactly? It is basically just maths and numbers, in very advanced ways of course. Surely it has technological advantages to the fiat currency but is besides being the first "on the block" it does not have much advantage besides being a major exchanger to other altcoins.
Bitcoin is not truly backed up by anything, we know its supply and can predict it years ahead of us, something that cannot be said the same about banks and fiat money. But unlike gold that actually has a "stored value" to make it somewhat stable, what will keep bitcoin and other cryptocurrencies as a reliable way of securing your "wealth"?
If bitcoin is maths, then steem is a branch
Think about it this for a moment. Now when we have been bashing a little on bitcoin we also have to realize what exactly makes us so sure of steem?
What steem is trying to build, is basically tokenizing social media platforms. To create value through a system of rewarding the individual users for creating content and activity one way or another. We keep building and expanding on this concept through apps such as Steemit, dlive and dtube. But will this be enough to make people adopt this idea? Since it can be agreed upon social media is based on the common people, Steem is basically depending on the common people. The investors will come where the people go, so if we get the people to join our boat, so will the investors.
But I firmly believe what sets us apart from bitcoin is, exactly this, we are building a branch with a very specific(yet powerful and broad) audience: Social media, that could have the potential of consistently generating value.
Gold, what is it good for?
Gold has been used for generation and proven worthy over many decades. Just like I mentioned before, gold has a certain "value" stored to it because of three main reasons:
A lot of the existing gold is stored to maintain the value.
It is a rare metal and relatively expensive to "produce". it most likely will only rise in price than becoming lower. In other words, gold is a stable way of storing your wealth. given you trust in third parties of course. :) (I am not gonna go into the rumors of if there are more gold in the world than governments will acknowledge)
Gold still has real use in the world for many things and also it has been established for thousands of years as a way of trading. We know what gold is worth by now since people have been trading with it for generations.
So you can now see that there exists a large and almost fixed quantity of gold in the world, almost all of which is held by its owners as a tangible store of wealth. That is something which is true of nothing else... or well until cryptocurrency came around.
Why am I talking about this again? Because maybe steem also got a way to create its own value outside of being just "numbers".
Could there be Similarities between gold and steem?
Just like gold, steem has ways of storing value. Our "stake concept" where we basically lock our steem in place(steem power or even Steem dollars). For those of you, that wonders what this means for the price of steem, it basically gives the same kind of "effect" as when storing gold. There will be less liquid steem in circulation = maintaining and increasing the value of steem.
If everyone powered up the steem we earned, we would basically decrease the supply, while the demand would stay the same (if not increase). In other words, the price of steem would rise. This is logic and can be seen anywhere in the world. BUT it requires people need to demand it first and still a healthy amount of supply to be sold.
When I a few days went to the top of a mountain, there was no water because of the summer period. I could buy water in the mountain hut but it cost almost 10 times more than it would down in the city. Why? because the demand for water for hikers up there was much higher than down in the cities and we all were thirsty.
While we all love to see quick gains it is simply not the same as wanting stability. As a matter of fact, it would not matter if steem would be stuck at the value of 1 dollar if it could maintain stability in that. Surely the "quick gains" we are seeing is because of the early stages of steem and other cryptocurrencies, and the world is trying to figure out how much eg. steem or bitcoin is worth.
When enough value from the world starts to flow back and forth, investing won't make much of a difference for the prices, that is where we know the price of bitcoin, steem or other cryptocurrencies will be settled and hopefully more stable.
Unlike bitcoin, steem also has another value through being a "product" or a "branch" that besides being "money" also has real-world usage. Steem is trying to actually create something that has a use for the people. When I mean "of use" I am not necessarily talking about the great advantage of transaction times and what not. But just how useful it actually is to people as a product within the social media sphere.
Imagine when SMT's comes and we are starting to see other platforms adopting the steem blockchain. People love these kinds of "collections of tokens". Just like the "Reddit karma points" but now it has actual usage through purchase power. We try to change the internet and if we imagining people actually jumping onboard for this concept, we suddenly have sustainable value coming into steem.
Imagining the future: When the masses adopt steem
We are now in the year 2030: we got SMT's going strong, the steem price has settled to a certain value because adoption of cryptocurrencies as a whole happened around 2024. Steem has now been established for over 10 years and people have widely been accepted it as being part of the social media interactions.
Bitcoin is dead though because altcoins started becoming independent already in 2022 and no more needed their old birthmother to help them anymore. (it's a harsh future) Also, the old platform Steemit.com have been forgotten in all of this since better blogging sites appeared on the steem blockchain. But a few diehard believers still lurk around on this ancient website.
Steem is doing great though! It is getting used and sold for people to create their own platforms through Smart media tokens that the steem blockchain is powering. We see social media platforms generating tokens for their users, people are trading them back and forth depending on what community and platform they wished to be part of. As Steem are getting locked in place by these platforms we are limiting the supply that can be sold. which has the effect of creating a secure way for people to store their wealth far away from any greedy banks or governments. Now people can safely go to their supermarket with their brand new "steemcard" knowing exactly how many green apples they can buy.
The steems market cap is so high by now, that even if big investors decide to invest into some projects (or sell away) it will have such a small impact on the overall economy of steem and it will merely feel like a drop in the water.
In other words, if this utopia should happen, steem would indeed be great as money. Because we might just be able to fulfill certain criteria that could prove important. Social media is a powerful way to establish wealth in the modern times, that is quite proven and surely shows it is the new way of globalizing and to unite the world into what feels like a small village. It would make sense, that social media also could be used to unite into a "new world currency" independent of politics and wars.
Now, before somebody says "but @holm, this is just an imagination". Yes, it is, but I like thinking about it. This is, of course, just a dream and first, we need people to realize its potential and chances are if steem should succeed, we would share the success with other cryptos as well. But we don't know for certain this will happen, there's always a risk being the first.
-holm
To be honest. utility token of quite a special case of blockchain could not be a good form of money. Although it could obviously serve a transactional purpose inside its blockchain economy
To be frank,it does not suits.It has a wide range of price movement and tremendous inflation rate!
The wide range is because the market is new, I believe(and also does others) that the heavy price swings will solve itself over time when we start to get a better accuracy of what the "world" believe steem, bitcoin or any other cryptocurrency for that matter is worth... Then the price will find stability. Also, our inflation rate of steem is reducing, as said in 18 years it will hit 1%. I know it is slow. But I am also talking way out in the future here.
fantastic post. i think out of all the currencies, you're right about dash. It is so much farther developed than everything, its ran like a legitimate brick and mortar company and the group of devs working on it is fantastic. i love steem, i have found that it is fast at transacting, and reliable and easy. the only problem anyone would have with steem being a currency for money is that it also has a form of "inflation" if you look into it. i feel like that is why so many people hate fiat, because inflation. but with steem its different, it increases then they chop it in half. with actual money you cant stop inflation. you just keep printing and printing! fantastic post, i look foreword to seeing way more stuff like this, followed.
Dash is totally centralized
Like what’s the point if it’s not decentralized? We might as well use a future bank crypto that’s at least backed up by something, dash is not decentralized at all. If dash wins over bitcoin this was all a waste of time
Thanks a lot @procaptainjoe ! It is true that steem has some inflation. But the inflation(according to my knowledge) should slowly decline over time and eventually hit 0. I might be wrong though, but I read it somewhere and I will look it up to share with you. cheers!
It has crazy inflation
And the rate can be changed easily. We can’t assume anything
ill read more into it too because honestly it confused the hell out of me when i read it! hahaha
Seems like most posts agree on it will go down to 1 % over the next 18 years Source from @penguinpablo. The post is a little old but I dont think stuff like this changes.
This can change at the hands of the few who hold most of the power. I’m pro steem and can admit there’s no certainty steem won’t be 10 cents soin
53k a day. thats not really that bad at all when you think in terms of inflations compared to the USD and if its supposed to stop and decrease in 18 years, hey. win for us all right? you got me! i guess i didn't finish the DYOR plan did i hahahah
Are u really trying to say usd inflation is worse then steem inflation? Are u joking?
It’s crazy people don’t see this inflation outside the mania cycle will end wity steem being 5 cents soon. I love this community and post daily but there are serious problems with steem the crypto at this time.
We are all learning this together:) !
It can go down as demand increases. But the demand may not increase infinitely. That could be an inconvenience. In any case, perhaps in the future the model can be adapted to correct what can now be a tolerable defect.
Steem's inflation will stop decreasing when it's at 1% iirc
Dash is shit compared to monero.
I don't think so. Steem seems more like an asset you would buy but not sell much. SBD seems like it could be money though although right now it is "pegged" to the fiat dollar.
It’s not pegged anymore
Ibly thing giving it value is free market.
hmmm. I see your point, but still, I disagree, I don't see any direct value in SBD except it is backed up by steem. But given SBD will stick with us the whole way, I guess if steem would be successful, But that doesn't go the other way around. But yes if steem is successful then SBD might be what we use to store our wealth:)
there's honestly no way to tell at this point.
SBD will not be
It already went well under its peg , it’s not backed by steem it’s only value is what free market gives it
When it went down recently u could not trade it for $1 of steem
The peg isn’t there anymore
And we have zero use for steem dollars now that there isn’t a promise held up we can always trade it for one dollar of steem
SBD has been holding pretty well. Some people did actually trade it in for Steem but not many.
It’s gone well under its peg
By at least 10%
That looks bad
That’s all I’m saying there isn’t a peg anymore. There’s no place that promises to trade a steem dollar for a steem. It’s just based on price. Hoijg ujdrr by over 10% isn’t as small a deal as it seems. There should be a fork to turn all steem dollars into steem and then we can all move on and focous on steem
Not according to coin marketcap.
https://coinmarketcap.com/currencies/steem-dollars/historical-data/?start=20180530&end=20180830
Bitscreener says it got below 80 cents though so I dunno.
https://bitscreener.com/coins/steem-dollars?timeframe=ytd&chart_type=candle&chart_unit=usd
Coin market cap is so unreliable! I see what ur looking at now. On the day it says .96 as low it 100% was at 90 cents for more then 12 hours. But regardless it went under $1.00 for almost a week. There’s no function anymore to trade steem dollars for $1.00 of steem officially. It’s just whatever steem dollars are worth.
Coin market cap did show it. I saw a guy on here live posting it
Coin market cap did
Show it. I saw a guy on
Here live posting it
- artgirlnyc
I'm a bot. I detect haiku.
But besides that it was documented on here too. It was not a flash crash either it was at .90 cents for a day plus. My point is it’s not pegged anymore officially. It’s just a market giving it value. That means there’s no point in it anymore
There is one good use for it,waiting for big pump and sell it.Im good with that. :)
Good luck with that 😘
Steemit already has so much registred people its above a Million right now so the community is very strong (250k active users).
When Steemit becomes like Facebook what do you think will happen with the price of Steem?
And yes it will be used as a payment because everyone would like to be on steemit and it will create a HUGE demand.
"If steem becomes like Facebook."
Facebook is like a FBIBOOK.
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No it wouldn’t
It’s not meant to be either
It has a utility
And money isn’t it
I agree with @mysearchisover - Steem can't be de facto money. By its very nature, crappy and cancerous shitposters will always bomb it, and I guess in the long-term it destabilizes its value.
Volatile assets are still terrible for being money, this is what's gonna be the demise of Bitcoin, too.
I think in the long term Steem will do well.
SBD is a lot more stable and seems a lot more like a currency to me although it is "pegged' to the fiat dollar which could be a downer.
Yes, and this is the reason I'm not a fan of SBD.
I also agree to some degree. But I believe the volatility we see in cryptomarket will find stability over time. Its just a new market and prices swing up and down because of this.
Understandable, the last months were quite calm. But recent events shows that it's still too easy to manipulate.
Nice article! When Investors are mentioned, is it intended that these be old world institutional investors? as I do not believe these have a place in a steemit type utility model... interested in any comments on this,
Investors that have an interest in social media platform can be anything. To name a few I would say people who are looking for marketing, sponsoring or entrepreneurs. :)
If anything, we have learned that the emergence of the crypto-ecosystem has generated its own investors, experts and infuencers. Innovation usually does that. It can facilitate the emergence of more factors that support your future growth.
I never see steem being the answer. A platform that pays you for content is something but there are too many real world jobs that require people to provide an actual service. I see steem succeeding but I still see the old system in place. Unless we find a way to automate all the important jobs in the next ten years theres no way steem grows to that level.
Adoption will happen but the pragmatic guy in me does not see true value when everybody is blogging and we just get saturated with crap. It'll be a nice social platform but thats as far as I see it grow. Can't wait for a few good SMTs but theres too much competition for steem to take over as it is right now.
Some honestly
Thank you for saying what many don’t!
The question is if steem would work as money. Not that everyone should be a blogger:) But the actual attributes and value that steem could provide through social media.
Just like gold is valuable, but not everyone should be a gold-miner. I think there's other cryptos there also could take the job as being "money" But this was merely a reflection on if steem could be:)
Great post, personally I do believe this kind of platform will rise up. And as everybody knows the elegance of cryptocurrency compared with convetional currencies is the "freedom" we have to deal with them.
Greeting my friend ypu got me right now! ;)