I had a different post planned already but then I got tagged in @cryptoandcoffee's post on collecting Steem and the direction changed it is somewhat related to my post from last night on crypto scarcity and also mentioned SMTs. SMTs are a magical animal that not many people understand well (myself included) but, they are going to have a massive impact in the crypto future as essentially anything and everything that can be, will be tokenized.

There are many reason I have so much faith in Steem but one of them is the Steem foundation that can tie many communities together and still allow them to act independently, but I will get to that later.

Smart Media Tokens are going to be a part of the future. @cryptoandcoffee mentioned that I put the fear of the devil into him often enough that he felt he was going to miss out if mass-adoption happened and as a result, he has grown. Then he read a post by @theycallmedan saying every blogger should be trying to hold at least 1000 Steem and under the current supply, that would be enough for only 300,000 users if distributed equally, which isn't going to happen.

This.

Steem is going to become a very, very scarce resource. I say resource because it is required to build SMTs , it is also the only way Resource Credits are created which is what provides the bandwidth for blockchain interaction. Through various capabilities and resource pools, RCs are going to be come a non-voting economic instrument that is going to have large effects on the future of Steem. RCs will likely have their own market for trade and delegation that applications and use for their own users and, potentially distribute back an SMT in some kind of payment.

With a value applied to RCs, there will be an additional reason to keep Steem powered up making exchange Steem scarcer and price increase. As price increases and some people sell, RCs become scarcer and their price goes up (depending on demand) meaning there is a push/pull dynamic with a cross tension. Great for price, ard for decision making considering that once the Steem is sold, one might never get it back again if demand increases.

However, scarcity of Steem really isn't a problem for the applications as long as they have enough bandwidth to power their users. Again, it doesn't actually take that much because essentially RCs can be delegated to an account and dropped from an account dynamically (at least at some point) as an account only needs them while interacting with the chain. They can get them at the door on login, leave them on logout where they then go back in the pool for the next entrant.

But then, where is the value of being on an application that doesn't distribute Steem? Well, they can have their own SMT tokens as you are already aware and, they will have their own values themselves. The other thing that people don't acknowledge is that while currently the plans are generally for an application to have their own token, that not necessarily be the case in the future. For example, a group of applications could share the same SMT and empower their community across a suite of applications that all leverage the Steem blockchain. There could be hundred and thousands of applications but there need not be an SMT for each.

Why would they stay on Steem then? Well, this is where Steem also has an advantage if it can pull together a high quality and scalable blockchain and this is why the development of the blockchain and making sure that it is reliable is so important now. As we can see from experience, developing a blockchain is not always an easy task and small applications are not going to want to have to go it alone as it will take a massive amount of resources from their core competence. So, rather than own, they can lease the lines from Steem. Lease is the running of the SMT and if they don't have their own, some cost in RCs. Again, that cost could be a distribution mechanism of their own SMT to delegators.

What this all could mean is that while Steem continues to decentralize and fracture into applications and communities above the blockchain, the SMTs will slowly build their own economic and value creation models by providing content and services to consumers and users. There are thousands of areas they could cover and there can be a very high level of diversity in what the tokens can do while they travel across Steem as their electrical wiring.

As I said above, the community is the thing that makes and breaks Steem in the long run as it will be the community that develops and supports the various applications. However, it is also the community that protects the applications, provides use case, customers, consumers and the resources required for it all to come together. Having community backed SMTs nested into the Steem blockchain provides a great deal of risk management security as failure of nodes doesn't result in failure of the greater project.

For users looking to earn, they are able to take their own startup and early adopter risks on SMT-based platforms that could very well out-perform Steem in price if successful yet, still run on and add value to the Steem blockchain and its users. Essentially, an SMT platform or idea could become wildly popular under the right conditions and put massive transaction pressure on the steem blockchain. But, it doesn't need to.

None of the applications really have to be super popular as long as enough are successful enough that they have users willing to use them. Some might be very large operations, others much more cottage industry but, that is fine. Steem becomes a core backbone of the new internet that empowers many and any.

The analogy of blockchain islands works well here as essentially what Steem becomes is an expanding archipelago with the expansion driven by the demand of users who are both currently on and yet to come. While if looking at these Steem islands from the blockchain view the connection between is apparent, from particular islands, it is not necessary to see the connection at all, each could appear to be gloating independently while being fundamentally tied together by Steem.

A blockchain of islands.

Now, a lot of the future depends on demand on the blockchain which means, demand on the applications here. while the blockchain gets more efficient and scalable, the developers keep developing and in what will seem a very short time once it happens, billions of people are going to start using the tokenized world and each of them are going to be using more than one token for various things. What is going to be interesting is that there will be people holding several Steem-backed tokens and, they might never have heard of Steem.

It is something that we forget here as we are quite immersed into the blockchain technology and the current going ons but in the future, most users aren't going to care anywhere near as much about how things work or even why they work, they will just want them to work. There aren't many people who understand 5G protocols and technicals in the world, this doesn't stop them from using it.

Why the community is important for Steem isn't just as the consumers, contributors, developers and investors, it is because it is a growing community which means, no matter if an account or an application, no one ever needs be alone. This is from an investment risk and, a personal perspective. In time, the power of Steem driven communities through SMTs, RCs and the people who use and interact in a million different ways are going to hold an enormous amount of value and as a group, a huge amount of influence.

Keep going if you choose.

Taraz
[ a Steem original ]