Will my coin moon? — pre-flight checks

in #cryptocurrency5 years ago (edited)

Check your fuel before hopping on a moon-bound rocket.

If you don’t do it, your rocket will trace a parabola, an n-shaped plume of smoke from the ground and back. 

To get to the moon, you need to take your crypto-rocket through several checks. The first is a qualitative check — a quick once-over to make sure it’s designed well. 

Bad Design

To understand bad vs good design, consider Vitalik’s post on Medium of Exchange Tokens. In his post, he posits that a simple app token is prone to rapid collapse, based on its holding time. Simply put, a trivial token, e.g. an ‘uber coin’ that users simply buy to use the service, pay the driver, who immediately sells the token to convert it back to ETH/USD, is a risky bet.

Good Design

Good tokens are designed so that holding the token for a period of time gives value inside the application, and makes its ecosystem more self correcting.

William Mougayar adds more detail in his article on Usage, Utility and Value of a token. Basically, a token can be considered a better design, with the more utility roles it passes below: 

Taking STEEM through Mougavar’s tests

Let us run through these tests, using STEEM as an example.

You should run these tests on any coin you consider holding 

The Right
Owning a token bestows a right that results in product usage, a governance action, a given contribution, voting, or plain access to the product or market.

 STEEM allows you to vote for content and witnesses. More STEEM means greater voting power for the holder.  

The Value Exchange
The token is an atomic unit of value exchange inside a particular market or app, resulting in the creation of a transactional economy between buyers and sellers.

STEEM can be delegated on steemit in exchange for value, and also traded back and forth for STEEM Blockchain Dollars.  

The Toll
Just like paying a toll to use a freeway, the token can be the pay-per-use rail for getting on the blockchain infrastructure or for using the product. This also ensures that users have skin in the game. It can include running smart contracts to perform a specific function, paying for a security deposit, or plain usage fees in the form of transaction fees or other metered metric

The STEEM blockchain charges for bandwidth and voting costs for power users.

The Function
The token can also be used as a lever to enrich the user experience, including basic actions like joining a network, or connecting with users. It can also be used as an incentive, if it is given in return to begin usage or for on-boarding.

STEEM and STEEM Blockchain Dollars are awarded for curating and creating content on Steemit and other Smart Media Token sites.

The Currency
The token is a very efficient payment method and transaction engine of choice. This is key for enabling frictionless transactions inside these closed environments.

STEEM can be used in the steemit shop to buy and sell a growing list of items.

The Earnings
An equitable redistribution of the resulting increased value is part of what blockchain-based models can enable. Whether it is profit sharing, benefits sharing or other benefits.

STEEM shares its profits daily with all contributors, with the highest contributors (decided by the community) getting more upvotes.

Before going through the numbers with your crypto-assets, taking them through this quick exercise will help you gauge the economic value they hold. 

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I like your writing. Very useful to us. I chose a good design. Thank you Sir.

Thank you. What subjects would you like to hear about next?

I do not understand about witnes, How are they elected? What's the job? And what are the benefits to a steemian's? I'm happy to meet you here. Thank You Sir.. :)

Will add this to the list. Thanks!

Your Welcome Sir..

Hello @hitwill Great post, very inspiring but I'll like you to go on this subject next. 'The need/usefulness/importance of powering up'... As in why we need Steem power and not only SBD. Many other minnows like myself are really confused about this. I hope you see this. Thanks very much @hitwill

Wow... This means alot. Thanks so much @hitwill

Thanks - good point. Will add this to the list.

Your Welcome Sir..

Yes dear I agree with you and your good concept. Before posting i learning more to select subject. I am very happy to get this post. I think , Which I have understood these are:

  1. Select good subject
  2. To point out specifically about subject.
  3. Attractive logo or photos must be related to subject.
    I don 't know , am I right or not. If I do anything wrong , please suggest me .

Very good. And keep the same format. So do always same number of photos, almost same length article. So your users become used to your writing. Also, here are some more good tips

Thank you for your good direction. Very logical tips , thank you.

Out of this world writing! Phenomenal post! This post is right up my alley! I look forward to reading your posts! I am proudly following, upvoting and resteeming! All the best! Positive Energy! Great Karma! Your Friend @extraterrestrial :)

Thanks for the support and feedback! What type of posts would you like to hear more about?

Thank you so very much for the out of this world upvote! I beyond appreciate it! It was the very best upvote that I have ever received! I will never forget your so very kind upvote! I would love to hear some of your posts regarding travel and some regarding the Great Steemit Community! I am very proud and honored to be a part of the Great Steemit Community! It is such a very kind and helpful Community! Thanks Again my Friend! We will definitely keep in touch! I am looking forward to more of your posts! PLEASE KEEP THE GREAT INSPIRATION COMING! All the best! Positive Energy! Great Karma! Your Friend @extraterrestrial :)

Thanks. I will add some about travelling related to crypto very soon.

It is my pleasure! I look forward to all of your posts! Thank you so very much @hitwill

Thanks for sharing your thoughts. Food for thought.
So I do have some questions ;).

  • you mention the steemit shop. I had a short look at the shop and I see prices like $7 for a mug. I assume those are steem based dollars? Or USD?
    If USD, then the shop is not a good reference. If it's SBD and we have to pay $7, this would mean about 200USD for a mug. Hm...

  • I'm struggling with this 'value' thing. I do believe in the concept of users being rewarded for their content (and I happily upvoted for the effort you put to write this article... though my 0,00x SBD won't make a lot of difference ;) ). Though: what is the actual value? Would someone pay >10SBD (30 or more USD) for this article? How should I look at this value?

In a way, it makes me feel we're not there yet. Something is missing with the interpretation of the value of crypto currencies.
They're not real currencies yet. Or the community should become a lot bigger, more services and products that can be bought in this 'system'. Such that you don't have to go back to USD anymore (only for entering the system maybe).

Maybe more currencies should go together as one (thinking about eg golem that is a reward for offering CPU-time).

Correct me though. I'm open for learning and getting more insight.

Good point. Those are some expensive mugs!!

For how much users should pay - it's quite interesting. The money that steemit pays its users is entirely democratic. It issues roughly the same amount of currency daily, and distributes this to writers based on up-votes.

Funny enough, the more advertising dollars enter the ecosystem, and the more the world values the STEEM cryptocurrency, the more valuable the payments will be.

Watch out for even higher payments in the future, when Smart Media Tokens increase the demand for STEEM. Another way of looking at it is, if facebook distributed its massive profits to to users who got the most likes... how much would they be earning daily for 'silly' posts? Hundreds? Thousands? More?

Their posts are what is making facebook to be a profitable company.

Sitting on money or give it back to outside shareholders sort of feels like it won't be as effective as if you would share the money back instantly to the users that helps the platform grow and actually increase the quality of the service. If Facebook instead of sitting on billions with scarcity mentality if they would just share that with it's best content creators they would create more abundance and happiness. Money is best invested the fastest when you share it with other people that will now work even harder and faster at producing new value.

The old system is mainly breaking apart since these new are so much faster and more effective. Clearly more speed in value transfers is exactly what people want. We get real time feedback and can track how we are doing so much faster. No need to wait several months or years to see how our investments are doing. It's right there in front of our faces instead.

This non sharing of value that we see on the other platforms makes people starting to turn more selfish and it becomes more how you can trick others or how to bait them into doing a certain action. Which eventually destroys the integrity of a platform and it starts to rot and break apart from the inside. Eventually there is just an empty shell left. And people have no real incentive for creating real value. Everything becomes half baked.

I'm missing something though when comparing to Facebook (And I totally agree about the rewards that should mainly go to the users providing the content, I'm not defending Facebook :). I just need more understanding):
There is the content part, which is now rewarded by upvoting (and will get bigger with SMT).
On the other hand, there's 'our' behaviour: we like posts, we have friends, we go to events, we post about topics (, we visit other sites outside the eco-system, we buy products outside, the eco-system, ...). That information is very important to advertisers. And easy to sell in a centralised system. How do you extract this information on a platform like steem?
Who gathers and exploits this?
We want to exclude a mediator, so this would mean this behaviour (or at least the behaviour we want to be open about) should go straight to advertisers? And rewards should come back from them straight to the individuals?
I don't see that yet :). Technically but also on a more functional level.

Any ideas?

Vitalik is correct in saying a simple app token can be a risky bet.

I have never heard of William Mougayar, but his approach on evaluating tokens is spot on. I step through a similar process whenever i'm considering making an investment. I also love how you walked STEEM through Mougayar's tests! Its a real gem.

Specifically I feel like "The Right" or voting function is a big incentive to hold, in turn making the asset more valuable. Other valuable blockchains are using this same approach.

I've been enjoying your content. Keep publishing :) Looking forward to your next post!

Thanks for the feedback! Lookout for a post on OmiseGo vs SWIFT, the bank's remittances systems

That is one post I am thoroughly looking forward to, OmiseGo vs SWIFT

Right on, can't wait to hear what you have to say! :) Awhile back you asked what kind of content I'd like to see. I'm into pretty much everything crypto, and I've enjoyed everything thus far.

Good people deserve good reputation. Thank you for sharing this. Looking forward for your next post!! :-)

Your welcome! Let everyone be inspired in more of your posts!! :)

thanks for the valuable post. Addition to yours, i always try to use common sense before i jump into coin. All of the coins aim to be used by the masses exchange of something on long run. I try to see that first. How possible it is? What it takes them to be an everyday product? if i see the posibilities are high; i go for it!
Second checkpoint is the team behind the coin. Devs. Their communication with their community. Just try to get to know them well. who they are, what they did in the past, what they eat, where they hang etc... Check the github activites. See how constant they do some updates and releases. maybe this helps: https://steemit.com/cryptocurrency/@denizkorkmaz/this-new-website-ranks-cryptocurrencies-based-on-their-github-activities
More you learn, more you earn.

Excellent points!

  1. What makes it an every day product
  2. Team
  3. Activity

Look out for a future post on what makes them to be an every day product!

How informative! This is exactly what I love about Steem currency and crypto (not a pro but hoping to be). We make money for brilliant ideas. A lot of investors are on it mainly to increase the crypto value but also to be more knowledgeable about the platform. I learned so much with your post. More power to you! ;)

Nice checklist! I've found that if you run any future crypto investments through even just a simple basic checklist, then many bad investments can be avoided! For me, I'm looking for inflationary coins that can be used for community funded projects. I look for DPOS protocols to allow for scale. I look for the coin to actually have it's own unique blockchain and not being launched on top of other chains. Other than that I just buy Bitcoin! Thanks for the great post. I've given you a follow / upvote / Resteem. Looking forward to more content. Actually, I would like to see you write more on Bitcoin. Not so much to beat it up, but to build it up! We need our rock in this community and I want to use Bitcoin as the rock. I really don't care for technical analysis posts, but more fundamental information! Other than that STEEM and Steemit.com are always great! Thanks for the post and I'll keep an eye out for the next one!

That is a great point! If we all had a checklist and system, then we can easily choose investments, and learn from our checklist and modify it over time. I had not thought of doing a Bitcoin post - the grandfather of crypto. I will definitely do one!

Awesome! I’ll be looking forward to a Bitcoin post from you! Thanks!

This is the reason why newbies will not be lost in their paths because there are good people who really tried to help others. Thank you for sharing this. Gonna reesteem this!! :)

Thank you for the support!

It is a pleasure to follow you. :)

Your writing is beautiful.It's very useful to us. for the first time, this is such a detailed, one-to-one analysis of everything.I chose a good design. Thank you, sir.
Resteemed..

Thank you for the support!

Your design is good and funny, an astronaute drinking beer and take a rest on the moon, You bring a different idea

I like your analogy with the whole coins/rockets pairing. It just seems that last year most alt coins launched had some success or at least presented a time for investors to get out without losing. As the the space gets more crowded, the bad gaskets, o-rings, etc are going to be exposed earlier on new cryptos by those that have been around for a few. Many of the new investors though will still just fire away thinking it's a can't lose area, even though anyone thats been here has felt the turbulence before.

I know! It's been a massive bull market with money going into different projects. I will add a post on how to categorise crypto to see which ones have a higher chance of succeeding.

Hello @hitwill Great post, very inspiring but I'll like you to go on this subject next. 'The need/usefulness/importance of powering up'... As in why we need Steem power and not only SBD. Many other minnows like myself are really confused about this. I hope you see this. Thanks very much @hitwill

OK, I will definitely do this one soon. Many people have requested it ;-)

I strongly agree with you @oredebby! This would be very helpful and more than appreciated @hitwill if this was addressed! Your the best! Thanks Again! Your Friend @extraterrestrial :)

Great information here. You sometimes get posts with a bunch of technical analysis but they do not touch on practical use.

Then, other times posts simply talk about what the user is doing and how they do it, but no techinical details as to how it all works and why.

You broke down a great post, and added your own explanation which complemented very nicely. Helps a lot to get both the technical and practical explanations of a subject.

As a newer user I’d like to hear more about curation and why/how to properly curate posts. Are there any unwritten rules of the Steemit community newer users should keep in mind?

Thanks for sharing.

That's a very good suggestion. I will also add how to curate (and power up). Thanks!!!

hi @hitwill how are you, this post is so amazing and use very beautiful language so we are very interested, in your post here i get many lessons.

Hello Will, thanks for your articles. Love them.

I noticed that you are continually asking for subjects … well, here comes my wish:

If you had to compile a list of maybe ten​ indicators to judge whether your Steem investment is still sound, what would these be?

Thanks for this - are you talking about technical analysis?

I meant indicators like user growth, or money going in / out, market cap, et cetera. It would be interesting to compile a daily or weekly list with those indicators and make it the basis for one's Steem investment decisions. TA indicators could be a part of this​.

Of course, a good design, like we all know about the future of crypto, it is going to touch the sky and no one gonna stops it.
So holding is best in my point of view if you have some investment to make.
Thanks for the KNowledge @hitwill
i

Thanks for posting I am new to crypto and excited in my steem investment.

Yeah I think your investment in steem will pay off well someday. :)

I sure hope so, steem is one of my favorite cryptocurrencies I have researched!

There could be some bumps along the way if sbd goes down to $1 but I think long term it looks good.

hey you are correct saying....... in steemit I am also waiting for ypur next post

Good vibes out here boys! Nothing but some good old vibes!

That good !

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Cryptocurrency is certainly the future.

If we can't even ever get humans to the moon, I doubt any coin ever will... - Make sure you eject before entering the Van Allen's radiation belt, if you are thinking of reaching the moon...

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