Where does STEEM's core asset derive its value from?
Does the shares analogy still work?
Greetings you theoretical people you!
As most of you know, the DAC terminology is extremely valuable for understanding blockchains. When you take BitShares from example,
The distributed network = company
BTS = shares of the company
Transaction fees = company's revenue
block rewards = expenses of the company
etc.
This is really helpful in understanding different blockchains and can assist in valuing each ones worth, added value and potential.
What throws me off a bit is that with BitShares, the BTS are the collateral behind the bitUSD. You NEED BTS in order to have a market pegged asset.
With Steem it is a little bit different. You don't need to put up STEEM in order to get a Steem Backed Dollar. You just create both at the same time (well the chain does)
Combined with the fact that there are no transaction fees (the company's revenue in the DAC analogy) makes me wonder where the demand for STEEM resides.
I know that the more STEEM you have the more your votes count when deciding which content gets to the top of the internet. There is definitely value being that.
But at first glance, it appears that STEEM has no revenue sources. What am I missing?
No transaction fees. No sign up fees (the requirement to own STEEM on sign up is not a fee since you keep your STEEM).
What happens when people start cashing out (trading their Steem Backed Dollars for STEEM and getting into Bitcoin or out of crypto entirely)?
Anyone have thoughts on this? Has this already been answered somewhere? If so, link me to it!
Looking forward to see what happens July 4th!
Cheers!
Steem is a community of people producing content for each other. STEEM Is just a means of keeping a fair accounting of everyone's contribution. It is social standing. It is influence. The people in the club are the source of value.
What do you think will happen July 4th and the following week?
I won't quote you on it! (:
I would assume that some would cash out their SBD into STEEM and then sell the STEEM for BTC essentially exiting the system.
This would cause the price to drop.
Some people would see this as a buying opportunity to "buy influence" for cheap, which would cause the price to raise again and stabilize somewhere.
Those people would only be interested in "buying influence" on steem(it) if the platform and network are in fact attracting quality users with quality content, which can attract eyeballs and attention (what drives most current websites).
So I guess it all boils down to the product itself. If it works (good content, good curation, good engagement) then the underlying STEEM will hold some value.
https://steemit.com/steem/@dantheman/why-people-will-buy-steem
It's interesting to ask these same questions of Bitcoin. What gives Bitcoin value? My perspective says speculation capital. I believe that's a majority indicator for most cryptos including chains like BTS that have complex mechanisms for tying up tokens. I could be wrong. Another way of looking at speculation capital and cryptocurrency is that value is captured in the economics described by Greater Fool's theory. Future transaction fee revenue might impact Greater Fool's theory in terms of a speculator's net cost but I'm at the point where I don't believe trsx fee revenue represents even a small fraction of speculation capital within a popular DAO. We have yet to see a successful DAO that captures a meaningful amount of transaction revenue despite market caps in the hundreds of millions.
Just answered this in slack :) I believe it's copied in @aem 's latest post ..
@cob how about working on muse and peertracks instead of posting on steem....