RE: STEEM As Money? STEEM Has Something No Other Cryptocurrency Has....
Very interesting. But reading, it seems that the key feature is the required time to power down or cash out SBDs. Steemit has created a system that, by many points of view, is more safe than other cryptos... But it has some problems. It is safer also because your funds can't be speedy stolen.. Because your funds can't be speedy used. You have a reasonable time to intervene and restore situation.
Now let's step back, one moment.
What is one of the key equilibriums in every form of money and crypto? It is the equilibrium between usability/freedom and safety.
Blockchain tried to change this equilibrium allowing the decentralized safety of blockchain - that allows a greater using speed and freedom and provides great safety.
Steemit simply moves in this equilibrium. This safety has a clear trade-off: as I said above, your funds can't be speedy stolen.. Because your funds can't be speedy used. You have a reasonable time to intervene and restore situation. By this point of view, steemit has created a sort of safe-deposit box: you can cash out.. But slowly.
So, we can simply say that steemit as free money is safer than other crypto, maybe. But it isn't a safe money, because money for definition is liquid. It can be used everywere. And steemit? 3 months to power down is not the definition of "liquid and available money". "3 days for cash out" is not immediate availability.. It is a safety measure that you have to ignore for everyday use. You have to hold an amount of steemit/SBDs immediatley available, maybe on exchanges or on every other services that guarantees immediate payments.
So, thank you for this very interesting post, but i have many doubts that this "slowly-available" form of steem can be considered as a more efficient form of money. No doubt that, as crypto, it is a safer way to protect your funds. But as money, in my opinion 3 days or 3 months to cash out are a problem.
That's a valid point.. but consider this... your Steemit account is where you keep the bulk of your money.. every day you earn SBD from your posts... transfer that money to a "hot wallet" and you now have liquid currency... yes it can be hacked and stolen. But the biggest part of your investment is safe in STEEM power...
I agree @davedickeyyall.
If you compared STEEM to fiat, most people do not walk around with all their money in cash in a wallet....most of it is in a bank and often transacted out to pay bills.
Incidental purchases (coffee, Big Mac, rolling papers) end up on credit/debit cards...there is no reason why we might not see similar cards in the future...perhaps tied to steem.
Yes, of course. But the automatization of this process (you pay today with your SDB because I am sure they will arrive in 3 days) means that you have to wait 3 days, then exchange them for STEEM, then exchange STEEM for fiat value or other crypto unless you don'have a STEEM-100%backed system.
This means that you have to do 2 trades SBD --> STEEM; STEEM --> SOMETHING ELSE that creates more devaluation risks for users. You have two operations that are a source of risks, not only one.
Also considering that waiting 3 days in a so volatile world like SDB market is very dangerous, even more than wait for the average Crypto transaction.
This doesn't mean that I am bearish about this project, but in my opinion SP is not money and SBD is even more dangerous for sellers than Bitcoin or STEEM. Because you have greater devaluation risks (another trade to exchange SDB in STEEM and, before of this, 3 days to wait).
This problem could be at least in part solved by creating a free market for SDB similar to STEEM or other crypto markets, with crosses to FIAT or other crypto...
One major point you bring up is the desperate need for steem/fiat pairings. The fact that you have to go from STEEM to something else before going to fiat is a major drawback. Like you said, it increases the risk.
As for the volatility, we will see if/when that settles down. In general, that is one attack on crypto that cannot be disputed...the volatility of the tokens makes it difficult to conduct commerce. Over time, it should lessen a bit but it might not. That is why Bitshares created the pairs that are held at a dollar so that merchants can price stuff accurately.
For this entire arena, we are so early that it is hard to tell what will unfold.
Yes, of course we still are in the early phase. We don'k know what kind of regulamentation we will have, we don't know how will crypto-markets evolve in the future, and we don't know what kind of developement will affect crypo protocols and token management.
Here we hare having some theoric talks, we are triyng to predict the
unpredictable...
Lol @ rolling papers 👍👍😂 good call
Of course, that is a shout out to you...
Or are those budgeted into your spending like the electric bill? LOL
No... but weed certainly is... $450/ month
As I have written above, in my opinion Steem Power is more similar to an investment. 3 month to cash out is really too much, and SP creates the possibility to get new cash flow with network influence and upvotes.. Just like a financial security
I like that it takes 3 months.. it forces me to save... which only makes me more in rewards..I only invest what I can afford to so powering down and cashing out isn't really a option until it's life changing money... in which case I got 3 months
I perfectly agree. Slow cashing out is a good resource to give stability to steem network - although it cannot control market volumes and it cannot completley bring down the steem supply in the market, particulary in moments of panic selling on exchanges.
I was simply pointing out that you cannot consider Steem Power as money, because its concept is very different from easily-available store of value. It is something different, more similar to "investing" as you said
Everything you say is true. There is a tradeoff between security and speed. Decentralized is not as fast as centralized. Therefore, we need to take a hard look where the capability to handle large number of transactions is going to come from.
As for the power times for redemption, there are a couple factors I would like to point out. To start, SP and SBD have the requirements, STEEM held in the account as that is liquid and transferable in the moment. And SBD is only a 3 day wait if you want to cash it out...we have the ability to transfer it to another which means purchases can be made. Finally, there are a host of transactions people make which they know about more than 3 days in advance. My electric, internet, insurance, rent, phone, and other bills are known. I also have an idea of how much I am going to spend a week on lunches, gas, and other expenses.
While STEEM isnt the total solution, there is no reason why I cant foresee people having some STEEM in a wallet on a phone for "walking around money" while having other steem set aside for bills (if it evolved into true money that is).
Yes, this creates a difference between narrow and broad money. I have considered this possibility.. What I was pointing out is that this system is a bit obvious. Increasing steemit safety by slowing its cashing out time is something that can do any crypto. Bitcoin too, for example, would have a new rule (via hard fork) that forces users to wait some time before of being able to spend received sum. By this point of view steemit is not a tecnologic evolution. It is simply a different balance of this tradeoff using blockchain.
Obviously, we also have to consider the other aspects such as steem volatility and similar problems for using steemit as money. I agree with what you said in your reply, i am simply saying that we have to consider the difference between STEEM narrow money and SBD broad money.
By the other hand, steem Power is more similar to an investment in my opinion. 3 month to cash out is really too much, and SP creates the possibility to get new cash flow.. Just like a financial security.
Try to withdraw a bigger sum of money from your bank. Or to send some money to a different continent.
Those are two great points.
I imagine getting more than $10K cash out of a bank on a given day is not possible. And if you want $50K, cash, call ahead.
The other continent is something few like to discuss. I guess because so few of us actually deal with overseas money personally. However, in talking to people in the US who are from other countries, it is a nightmare (and expensive) for them to send money home.
It will be interesting to see how this all plays out. STEEM has attributes that make it very attractive...it is just a matter if the general public eventually picks up on it.
Surely less than 3 months required for SP.
The 3 days required for SBD are a different question, but still we have to consider that SBD are broad money, non narrow money. For everyday needs, you anyway have to hold some liquid STEEMS. So, this is a very hard question to analyze....
The main benefit of SP is that protect you from making stupid moves while listening to mum's basement crypto experts with no skin in the game. At least that's the way working for me. Besides rewards, of course.
I perfectly agree. Slow cashing time seems to be a great thing to give stability to steem network - although it cannot control market volumes and it cannot completley bring down the steem supply in the market, particulary in moments of panic selling on exchanges.
It protects you from doing some stupid things and forces you to adopt a long-term vision, that is very important for the evolution of steemit network.
We also have to consider that the utility of steem power to get new cash flow by using influence and upvotes gives the possibility to calculate the fundamental value of a STEEM token, that is very important to create the theoric possibility of a market stabilization near to this theoric value.
I was simply pointing out that you cannot consider Steem Power as money, because its concept is very different from easily-available payment instrument. It is something different, more similar to a form of medium-long term investment/(maybe)store of value
Great comment....you are correct.
Too many believe what the talking heads on TV (who have no idea what cryptocurrencies are all about) are saying and follow what they say.
It is really sad.
And part of the reason I am torn by the elite versus the populous. While I cant defend the elite, the average Joe simply makes it too easy for them because he fails to pay attention to anything that is going on and believe what is on TV.