Will the new SMTs help or hurt STEEM?
I admit I haven't finished reading the whole whitepaper on Smart Media Tokens (SMT), but I think I understand the concept well enough. To start, I think it's an amazing concept and I sincerely hope it takes off and becomes as successful as we all hope it can be.
My question, though, is about how these new SMTs will affect the STEEM currency in which we all have some stake. In Ethereum, Ether will always be necessary to pay the gas price for running transactions. So the more smart contracts and tokens that are added on top of Ethereum and the more people that use them, the more people will need Ether which should drive a strong demand for it.
On Steem though there is no gas price and there are no transaction fees. So I'm wondering if SMTs are very successful if there's any reason for the STEEM currency to be successful as well. Is it possible that everyone just uses the new SMTs and the price and utility of STEEM goes to near 0? Is there some reason that I'm missing that people will need to acquire and use STEEM to help run these SMTs?
Additionally, the SMTs are still running off the Steem blockchain which is maintained by the witnesses who receive rewards for creating blocks with STEEM. If STEEM goes to 0 because everyone is now using SMTs then there's no more incentive to run witness nodes and the whole system stops.
This is a short post but I feel that I must be missing something here, so I'm looking hear from all of you who hopefully understand this a bit better than I do. Please let me know what I'm missing. If I'm not missing anything then it seems like it doesn't make sense to hold STEEM as a good long term investment.
FYI I will give a 100% upvote to any helpful comments. I'd really like to try to get a good discussion going here!
A SMT will be exchanged through STEEM, so we won't have a pack of SMTs and STEEM only one of them. We will have STEEM, and after that a cluster of SMTs over STEEM. Market-wise, this will in all probability help interest for STEEM, as a token.
Additionally, the SMT age system is far more mind boggling than only a token issuance on the Ethereum stage. When you dispatch a SMT, you truly dispatch a thin layer of Steem-application-forms over your substance, including your own particular prizes pool, your own particular swelling model, your own particular voting and curation calculations and your own vesting component.
Hope this helps.
I'm not sure I understand what you mean. In your first paragraph when you say "A SMT will be exchanged through STEEM..." what does that mean exactly? What happens under the hood if someone wants to purchase some of an SMT? How exactly does it help interest for the STEEM token?
I understand why SMTs are much more powerful than tokens on Ethereum, but I still don't understand how that helps the original STEEM token itself.
any token is an asset issued on top of the STEEM blockchain and it's traded in a token/STEEM pair, so the steem is major trading pair for any SMT in this way it helps steem token itself.
Listen, you @bbomber. I find this comment you steel from @dragosroua ten times today. You playing with fire. Just saying.
Reading through dragos's post the first thing that jumps out at me is this is very ICO focused. During the ICO period you need to buy Steem to buy the newly created token. So this will definitely raise the price of Steem. However, this is actually a bit disappointing since ICO's seem to encourage speculation and bubbles and I think it has a much greater potential.
Try to look this way:
Steemit inc. own millions of steem. Would they spend months of work to build something that will hurt their wallets? Do you need to know more?
First - thanks for reading my posts and commenting @oldtimer, I appreciate your insight since you've been here for longer than most.
I agree that it will help Steem because they wouldn't have done it otherwise, but I would really like to understand why and how exactly it all works. I'm a programmer/hacker and like to understand how things work.
Can SMTs be traded on crypto exchanges like any other currencies/tokens? If so then if I buy some of an SMT on an exchange, where does the Steem token come in?
Are you familiar how bitshares Dex work?
No - though I understand Steem is very similar to Bitshares and built on top of the same platform.
Should I look into "bitshares Dex" to understand the relationship between Steem and SMTs?
As I understand it's like You need ethereum like gas to pay fees on eth blockchain. On BTS you need bts to convert bts assets to exchange for crypto and the to fiat. You need steem to convert SMT to crypto. And also steempower for bandwidth to run your STM. I know it's not exactly this way, but simmilar. Ask @dragosroua.
Thanks again @oldtimer. I read and commented on @dragosroua's posts about this and also took the time to read the whole rest of the white paper which actually answered this question directly.
I made a follow up post with what I think is the answer to this question based on what is written in the white paper here: https://steemit.com/steem/@yabapmatt/how-will-smts-send-steem-to-the-moon
Here is the way I think of it. But I could be way off.
Think of STEEM as the USD.
SMTs are goods and services. So if I own 10 shirts and 10 pants that would be the same as owning SMTs at the NY Times and Reddit.
What is the value of these SMTs is determined by the market. If you want to buy my 10 shirts we gage how much that will be based on the market.
So we get your question about the value of STEEM. You ask if it is a good long term investment. Well that probably depends on your plans with it.
Back to the USD. The USD gains and loses value all the time. If you are in America you don't really see this but let me give you an example.
If you wanted to buy something in Mexico 10 years ago it cost you about 10 pesos for each USD you wanted to spend (http://www.xe.com/currencycharts/?from=USD&to=MXN&view=10Y). Today that number is 18+. That means the USD has gained almost 100% value compared to the Mexican Peso. So if you wanted to retire in Mexico keeping your networth in USD would have increased your purchasing power almost 100% over the last 10 years.
Make sense?
In that case, the Companies implementing SMT will run nodes so that they have an influence in the system and keep the system running. But that would lead to a bit of centralization but the system will keep going on.
Good point!
I'm too new offer any incite, I am grateful that you are asking these questions and I am learning from them and the responses. Thank you for starting this dialogue. It's a lot for a new person to wrap their heads around, at least it is for me, a rank beginner on so many levels.
Glad to help - I agree it's super hard to really understand all of this and right when I think i'm starting to get it all then a bunch of new stuff is announced!
Thank you for the encouragement, and for taking the time to respond. I hope you have a great weekend.
I think you got it all wrong...
STEEM is the gas just as similar as ethereum... Only there is no fee, which is better than ether...
the SMTs are TOKENS, not CURRENCY, you must understand the difference here, the currency is STEEM...
This should push steem to the moon...
Thanks - I am starting to understand slowly (and will probably write a post to help others who are confused as well).
But to be clear, STEEM is NOT gas, STEEM is equivalent to Ether. Gas is the transaction fee on Ethereum payable in Ether and as you mentioned there is no such equivalent fee for Steem transactions.
Exactly, steem is equivalent to ether...
People who want to launch a token will need to buy steem... Steem should be added to more exchanges as it have more use now...
Actually is a very clever move, basically these tokens are ICO for social media, these ICO have proven to work very well to increase ethereum price, so it should do the same for steem, at least thats the idea i guess...
The coming days and months are very exciting, we will find out how this will work out, and will witness the effects...
Please keep in mind, though, that a ‘convergence’ of forces from multiple variables drives price change. One of these forces is the ever-increasing supply of STEEM that people can elect to put on the market for sale. Yes, this SMT strategy should expand buyer-demand for STEEM; but the expansion will need to be very strong to ensure that the net result is a price increase.
Finally, there was remark earlier that the SMT’s might bring the utility of STEEM to a very low level. We should define “utility”, I think.
Seems to me like you opened a new account just to bring FUD into steem... Sorry mate, not taking serious your arguments or lack of...
I am really sorry, and I respect your viewpoint. Would it be great if we all sang from the same song book? (Yes, I know, I deserve to be totally ignored. Cheers!)
Come and comment from your old account... There must be a dark reason for you to hide in a new account, that totally blows your credibility mate...
Actually it would be great if people bring their different point of views and criticism over steem, but why hiding?...
This message is an offer of friendship from Elmer FUD, the one “who hides in dark places”. Market traders, and many investors who rely on perceived price dips or price spikes to help them with timing, need to be in a situation where Certainty, Fearlessness, and Freedom from Doubt are present only occasionally. Otherwise, their opportunities to trade would dry up, they would leave the market, and the market itself would become much less liquid. Hence, those of us who have “deliberately opened accounts in order to spread FUD” (according to certain interpreters of unstated intentions) might not be such bad people. For me, for example, “thanks loads to China's spreading FUD recently for giving me he chance to get into Bitcoin near $3,000!” (Yes, I am just pulling your legs. Okay?)
In any case its an interesting oportunity to double/triple some earnings with steem currency :)
I too don't quite understand. But some interest is being generated, given the 50% rise in Steem's value
Yea, definitely not complaining about that! And as I said in the post - I think I'm wrong and I'm missing something but hoping this post can help clear that all up for me.