Convergence: The Key To STEEM's Massive Explosion In The Near Future: Part 6

This is the 5th part of a series as to why I believe we are going to see an explosion in STEEM due to a convergence of many variables all aligning up properly.

Major technological innovations do not happen in a vacuum. Instead, they are the result of years of research in many different fields which all came together at one time. It is almost as if everything magically lined up at that moment in history. Often, some will attribute it to luck but it is far from it. This convergence of breakthroughs is what makes revolutionary ideas happen in technology.

The magical sweet spot means money. money. money.

We are at a very interesting time on steemit. The SBD pricing exploded. It did not take long for people to post that it was time to switch the reward payout to a 50/50 split. The reasoning for this is that one is getting roughly 6 STEEM for every SBD (on the internal market). This single factor is increasing the payouts to each person by a multiple of 3. Naturally, this enables people to power up at a faster rate. On the steem blockchain, steem power is key because it dictates voting power. The more, the merrier as they say.

SBD is just one example of the sweet spot I am referring to. We are in a time period where the price of STEEM is growing at a pace faster than the user growth rate. This is crucial since the reward pool is priced in STEEM. Dollars mean nothing on the steem blockchain. However, the payouts are depicted on the website in dollars. Since the price of STEEM more than doubled in the past 6 weeks, this means that the payouts, in terms of dollars, moved up by the same percentage.

Since the user rate is not keeping pace, there is more of the pie (in dollars) available to each person. Simply by doing the same thing you did a month ago, you now have double the money. Naturally, this is just a mental exercise since you are paid in STEEM and you do not realize the dollar gain until cashing out. However, this is very important since people see the dollar amounts on Steemit. From an attention stand point, this is powerful. There will come a point where the dollar values shown on posts is just too hard for the masses to resist. Word will spread that people are making thousands of dollars per post (which we are starting to see). People cannot resist money like that and will be drawn to it.

I call this a "spot" since it is really just a window in time. As more people sign up and start participating, the reward pool will become diluted. It is possible, down the road, you are earning 1/10th or 1/20th the STEEM you are now. Of course, the idea is that more people will drive the price of STEEM up meaning your compensation, in dollars, exceeds what it is at present. We are in that window. Growth on this blockchain is steady but not exponential...yet. People on here need to take advantage of this while it exists.

This is the perfect time for all newer people to put forth the effort to get to the 1000 SP level I mentioned a couple weeks ago.

https://steemit.com/steemit/@taskmaster4450/1ksp-pathway-to-freedom-for-many-on-steem-please-share-your-thoughts-on-this-idea

I learned a long time ago, when it comes to investing, do not overlook the big elephant in the room. This is often what will make or break you.

On this blockchain, the big elephant is Smart Media Tokens. Over the past few days I wrote about many different attributes and factors that are converging in a way that is going to push STEEM higher. However, none of this compares to what SMTs are going to do.

For those who are unaware, briefly, Smart Media Tokens is a protocol which allows content creators with sites to come to the STEEM platform and create their own token. In this regard, it is similar to the ERC20 protocol on the ethereum blockchain.

That said, SMT provide content creators with a series of advantages that ERC20 does not.

When someone creates a token on the steem blockchain, they instantly get the curation reward system. This is vital to content creators who are seeking to profit of their creations. It also gives their followers the ability to earn tokens by participating on that site similar to how we are operating here on Steemit. The "Get Paid To _________" model is basically what is being offered through the development of a new token.

To provide liquidity, each new token created is paired with STEEM. Remember when I said that steem is a de-centralized exchange and, even though the only currencies traded are STEEM and SBD, there was the ability to add more. The "more" is the tokens created via the SMT protocol. All tokens will be available on the steem market just like SBD and STEEM. This is a huge advantage to someone accumulating a newer token. Since there isn't a place to spend it and, most likely, no exchange to trade it, steem provides the liquidity via its' own internal exchange.

Smart Media Tokens potentially provide the steem blockchain with access to some of the most active websites on the Internet. Any site that creates content, which is almost every site out there, can design a token and be on the steem blockchain. This offers the ability to enlist a site or two with millions of followers. Considering this entire blockchain has roughly 450K accounts signed up and only about 30K active users, you can see how that will be an exponential jump. Once that happens, say goodbye to the sweet spot we are presently in.

Alas, grasshopper, have no fear. There is good news.

When this takes place, and notice I said when, the value of STEEM will automatically jump. The other day I wrote about the value of the blockchain. One of the aspects that is unique is the idea of no fee transactions but, rather, using bandwidth. As stated in that post, bandwidth, like everything else on this blockchain is priced in STEEM. Hence, a site drawing millions of people over is going to need to have enough bandwidth to facilitate the growth it is seeking. How does it acquire this bandwidth? By buying STEEM. In short, more users means greater bandwidth used leading to higher demand for STEEM. AND unlike the fiat world, the amount of STEEM cannot be expanded to meet this demand. Instead, prices will adjust to balance the supply/demand ratio.

So let me ask you, even without a degree in finance or economics, what do you think will happen to the price of STEEM when the demand increases substantially due to a need to pay for bandwidth?

Cha-Ching!!!!!!

Money. Money. Money.

Consider this: for the companies that develop tokens, THERE IS NO CHOICE. This is not a speculation play hoping the value of the token increases. Rather, it is something these businesses have to do not only to operate, but to expand. In this arena, bandwidth is like oxygen to a runner. The prospect of not having it is unappealing and has dire consequences. What is amazing is that the purchase of STEEM by the owner(s) is simply a cost of doing business. Part of the flexibility in the curation reward system is the owners decide how much they retain off each transaction for operating expenses. In short, the greater the activity taking place, the more money they are pulling in. Purchasing extra STEEM for bandwidth is a problem every token creator will want to have.

And who does this favor? Those of us holding STEEM.

For those who missed it, there was a major token announcement a couple months back called Vice.org. This is a cooperative of many different content creators in the adult video industry i.e. porn. One of the companies involved is Penthouse, a rather large name. Their motto is "Get Paid For Watching Porn". Now I am not interested in anyone's view on this subject other than financial. Having just discussed bandwidth, what do you think will happen when they open up shop? Do you think they will lure a few users to the steem blockchain? When you consider the success of all the tube sites out there, what will happen when people are getting paid to watch this stuff? If you think there will be a massive explosion (pun intended there), I agree with you. This one token will probably bring millions of people to the steem blockchain. Can you imagine the bandwidth they are going to require? It will be enormous (no pun intended there but I guess that does apply to porn).

And this is only one token. Imagine 5 or 10 with similar reach and magnitude.

Remember, the steem blockchain can easily handle 10,000 transactions per second with the possibility of knocking out 100K/sec. This is one of the few blockchains with the horsepower to handle the type of volume these entities are going to require. Bitcoin cannot do this. Nor can ethereum.

Excited yet (okay I couldn't resist one last innuendo). Well, you should be.

If you found this article to be informative, please give it an upvote and a re-steem.

In case you missed the other parts of this series:

https://steemit.com/steem/@taskmaster4450/convergence-the-key-to-steem-s-massive-explosion-in-the-near-future-part-5

https://steemit.com/steem/@taskmaster4450/convergence-the-key-to-steem-s-massive-explosion-in-the-near-future-part-4

https://steemit.com/steem/@taskmaster4450/convergence-the-key-to-steem-s-massive-explosion-in-the-near-future-part-3

https://steemit.com/steem/@taskmaster4450/convergence-the-key-to-steem-s-massive-explosion-in-the-near-future-part-2

https://steemit.com/steem/@taskmaster4450/convergence-the-key-to-steem-s-massive-explosion-in-the-near-future-part-1

Pictures by Google Images.