SMTs...Did @ned Just Start A Feeding Frenzy That Will Lift STEEM To Hundred's Of Dollars? Holy Crap...He Did!!!!
There are many blockchains out there including bitcoin which has the most development on it of any blockchain presently in existence. In fact, it is not even close which is probably why the Bitcoin token is so much more valuable than anything else (one of the reasons anyway). In my last article, I wrote how the bitcoin blockchain will continue to lead and that Bitcoin, the token, will keep going up.
In that article, I also explained the "feeding frenzy" that takes place with a blockchain. Basically, when looking at this technology, there are three groups of people involved: developers, entrepreneurs, and speculators. Often they can be the same person or different people. Nevertheless, what happens is that once a blockchain is created, it needs to draw the attention of the developers. Often, entrepreneurs will find something first and bring in developers (SMTs?). Regardless, at some point the developers enter the equation creating apps on the platform. Of course, eventually a frenzy starts which causes speculators to enter the mix which drives the cost of a token up. This pulls in more developers and the cycle keeps repeating itself.
Which brings me to STEEM. The steem blockchain is already in place with a number of developers creating apps for it. Steemit.com is one of the apps that users are presently enjoying. So is Dtube, busy.org, and a host of others. All these will help the blockchain to grow in popularity. However, none of them really make the steem blockchain stand out from anyone else.
After the release of the SMT white paper, @ned said in an interview that it is his goal to "tokenize" the Internet by focusing upon the publishing/content creation market. He is out to revolutionize how businesses in this arena operate and rewrite how content creators are compensated. SMTs are his avenue to do this whereby anyone can create their own token on the steem blockchain.
Do you realize what he just did? The steem blockchain already has content creator compensation established. We see this in operation each time we post something that gets upvoted on steemit.com or Dtube. Anyone interested in monetizing the original content on their blog or site while also giving compensation to their commenters only needs to create a SMT. This holds true for the blogger with 500 followers or a site like the New York Times. Sure the big boys can develop everything from scratch but why do that? The cost and time to implementation make SMTs more attractive. There is already a model in place to work from.
So what does this do? Two things:
A. It separates the steem blockchain from every other blockchain out there.
B. It brings in developers
Do not under estimate the value of B. SMTs are going to bring in lots and lots of developers. This is crucial. When looking at the blockchain-token cycle which the speculators push up the price of a token creating publicity that attracts developers, @ned just skipped that entire step. Instead, the allure of monetizing a site will cause entrepreneurs to bring in the developers. People do not need to think up new applications to put on the steem blockchain although I am sure there are hundreds of ideas that will end up on here.
Rather, we see an idea that appeals to hundreds of millions of websites already in operation. These people took the time and made the effort to put content on the Internet. Whether big or small, they are all eligible to create a SMT to monetize what they are already doing. Suddenly, everyone who is posting stuff out there is an entrepreneur. And this means that the developers will not be far behind.
So, in my opinion, @ned just created the feeding frenzy which will increase the number of developers on the steem blockchain and, in turn, send the price of STEEM up. A day or two ago, it was announced that the first SMT was completed.
This is the first of what I am sure will be many to follow in the next few months. Activity on a blockchain creates value. Remember, the apps created have a lot less value than the protocols (blockchains) themselves. We watch Etherium go from $7 a token to almost $350 in under a year because of all the publicity it got for launching so many ICOs. With the initiation of SMTs, there is the possibility we see a similar jump in STEEM. The number of transactions potentially generated off this platform can grow at an incredible rate. There are roughly 400K members on steemit.com. One website with a decent following could instantly 5-fold that number.
Are you ready....3,2,1....we have lift off.
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Pictures from google images
Nice writeup. I think the SMTs are an interesting concept that may bring tremendous value in some cases, but the potential for abuse can't be overstated, not to mention the fact that these SMTs may be considered securities by regulators.
I'm cautiously optimistic at this point on SMTs.
Regulation certainly puts a monkey wrench in things since there is so much uncertainty. Of course, since SMTs arent tied to any one country, there is always a means around the regulators in a particular country.
If I am not mistaken, as long as tokens arent an equity stake then the Feds in the US do not consider it a security. I thought they already ruled on that but I could be wrong.