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RE: Smart Media Tokens (SMT) Explained: The short version.
How can I use these SMT. Suppose I got some SMTs named August which are associated with Facebook. How do I use them. And why will Facebook or Google adopt these. Will they not prefer building one of their own. They are giants who build everything for themselves. Just curious.
Hi,
This are very good questions.
First question, if Facebook has Steemit design SMT for Facebook, these SMT called August tokens would be used to reward you for value you bring to Facebook such as your pictures or your friends and relatives, which you bring to Facebook. Although people don't think of themselves, their families and their friends as customers, to Facebook you are customers and you may be the person who invites your family and your friends to Facebook. So you are bringing Facebook customers and Facebook uses your information to make money. So you get Facebook for free, but Facebook makes a lot of money off of what you bring to them. The purpose of these coins is to first reward you for what you have done in bringing Facebook customers and also to reward you for any content you put on Facebook that also brings them customers or helps them generate revenue. Plus now that you have been rewarded you want to bring more friends, more family and place more content on Facebook. So now you become more productive for Facebook. You would now use these coins as a form of currency on Facebook to purchase goods or services on Facebook stores or potentially outside Facebook if a merchant decided that accepting these tokens was a good way to drive business to his establishment. Additionally these coins would have intrinsic value in dollars, which the free market would set and this value would potentially grow and fluctuate as all stores of value do. Your second question is also very good because Facebook and Google are very big concerns, so they could go out and hire experts in cryptocurrency and blockchain development and build their own. Cryptocurrency and the creation, function and maintenance of a blockchain are relatively new computer software creations and although most cryptocurrency starts as a clone of something which came before it like Bitcoin, Bitcoin Gold, Bitcoin Green, etherium etherium classic and so on and so on, they are difficult to create and maintain, plus flaws and weakness which can be exploited are constantly being discovered. So while these large companies certainly have the resources to build their own blockchain, they would do so at considerable expense and then their famous blockchains would go through the growing pains and embarrassments of any new blockchain. Plus their newly hired staff would now have to maintain this blockchain and protect it from hacks and exploits. This is not only costly but potentially these problems could damage their reputation and drive away customers. It is in some ways easier and wiser to build your cryptocurrency on a pre-existing blockchain, which is tested and has seasoned experienced people to protect and maintain it. This allows them to first focus on their core business, second not divert resources to accomplish what can be more cheaply outsourced and third: in the business world a third party contractor owns the problems and bad press, so it provides good protection for the business leaders who are in charge of this project at these big companies. Lastly a similar and very successful model would be smart contracts on the etherium blockchain, which are very popular for similar reasons.
Good explanation to my questions. I see a point in the SMT but definitely not for Facebook. It can not see Facebook join hands with its biggest competitor. And for instance if we agree that Facebook adopts the SMT then just imagine how badly they will invade our privacy.