I see Steem as much less risky an investment than investing in some single company worth $150 million. - @markkujantunen

This is a part of a comment I received this morning on a post and something I have believed in for quite a long time now. If someone is going to invest into a single stock, that company has to perform which is why many people these days invest into index funds that essentially spreads the risks across many companies. There is less chance of cataclysmic failure but also, meteoric rise. It is the safe bet and will likely see a ROI of about 10%.

Steem is different of course.

Being a Steem holder is given a bad wrap often enough and is seen as risky but, that is all of crypto. The difference of investing into STEEM is that one isn't investing into a single vehicle at all but rather, a collection of vehicles and the most exciting thing about it is that, the collection is always growing.

The collection is of course the applications that run along the steem Blockchain and the larger the pool of apps and the more users that leverage them, the more stability comes to the Steem ecosystem as risk is spread across multiple points and even if one fails, the others are able to absorb the impact. But, it goes further than that again.

As I believe, the crypto, blockchain, tokenization industry is just getting started and there is going to be a mountain of new innovation to come that leverages capabilities. What this means is that not only will Steem become more stable in the future, holding means having a stake in every Steem startup company that arrives and eventually, some of them are going to be successful.

While many startups fail, some percentage will be moderately successful, a smaller percentage very successful and a tiny percentage will take on some kind of unicorn status and eclipse the competition. In a decentralized environment like Steem, there is no limit on who or what can be created within the bounds of the technology and the more people to arrive and build, the higher the chance of some of them developing a high-value product.

Steem holders will not only benefit from the gains of such businesses however for as we know, there are going to be an increasing amount of options to invest and get return from the apps themselves through delegation or vote power to get a return earning in an SMT. This means that while an application startup can grow, Steem holders can invest their opportunity cost attention into developing them which means, all win, including the users of the application who have access to an environment they can enjoy and earn upon.

Each application whether it is worth 100 dollars or 100 million dollars adds economic mass to the Blockchain and further advances market penetration of Steem into the digital and analogue lives of users. Steem is not the only blockchain that will do this of course and, there is space for many more in the future.

How I see it though is that the Blockchains that are niche content based can be successful, they are much riskier to invest in long-term as they will suffer the slings and arrows of outrageous fortune meaning, once heavily invested it becomes a point of weakness. Holding Steem distributes this risk across applications and eventually SMTs that means while narrowly invested, the Steem network protects like an index fund of a kind.

Each application will be able to create and deliver their user experience with precision the way they want to and distribute their SMT in like fashion also. No matter which of them perform well or poorly, a Steem holder can take advantage of the Steem price, the SMT value and of course, the value of RCs that they could provide to applications in order to create accounts, provide bandwidth and create any number of Steem-based artefacts that could come about in the future.

Risk reduction is something that Steem has built into the decentralization of action and application meaning that the further it grows, the safer the investment gets, even while it is mooning. Fluctuations in value are of course going to happen but the more mass of user, value and transaction that builds, the stronger the foundation continually gets as it spreads ever wider and more integrated into every day activity.

Decentralization provides various kinds of security against censorship and attack but, it also can provide risk mitigation through a process of not having all eggs in the same basket. The decentralization of Steem means distributing the eggs across application baskets as well as communities, industries, niches, economies and cultures.

It is going to get interesting as the fragmentation of use case continues while all travelling across the same infrastructure. Steem is becoming a backbone of social tokenization and as adoption swings into life over the coming years, the investment potential solidifies into investment returns - active or passive.

There are not many investment opportunities that give you a chance to invest into what hasn't even been thought of yet, while benefiting from all that already has been developed in preparation for it to arrive.

Taraz
[ a Steem original ]