What is "value"?
Source
Introduction
Being on Steemit has thought me a lot about the monetary system and what makes something valuable. At first sight value, money and trust all seem to be famillar subjects to me, until I joined this platform.
When Ned released his video "Value Flows on Steem with SMTs" in which he explained how demand for Steem could increase (read: price instead of demand) due to SMT. This video got me thinking since then about the question:
What makes something valuable? What makes steem valuable?
In today's article I will give my take on this subject.
Trust
When we compare Steem or another crypto currency to a real currency like the US dollar, the value comes from trust that the public has in the currency. We trust that other people to give the same value to the currency. This trust has become very much normal in my daily live, and I had never questioned the importance of the public trust in a currency.
Give me your money for my product!
Now what is the value of an object we buy with our money? What determines the value of that? Let us for example take an apple as object. How much are you willing to pay for an apple? What is the value of the apple? Looking at a supermarket price it's $1. So is this the true value that is reached by the market consensus? No, we both know that depending on the situation we are willing to pay more for the apple. Like when you are very hungry and you come by a streetshop, who offers the apple at a higher price.
Services
Value is subjective. An object can hold more value for someone else. If the object is identical I guess the only value that make it different for people in this case is the emotional value. Is there any differences to services? Services like customer support, maintanence and installation are not tangible like objects, but they can be given a value and this value can also differ for each invidiual.
What makes something valuable
Thinking about products and services, I came to the conclusion that value is something that is created that someone needs, or atleast perceived as useful. What somebody finds useful is not bounded to materiality. The apple is a material that is used to satisfy hunger, but it could also be used for a realistic drawing. In the last case someone will look for a better looking apple and will most likely pay a higher price for the apple.
Steem
So what makes Steem or SBD valuable? What makes people want to own steem? The first thought that came to my mind was, that owning steem means owning a stake in the world's first social media blockchain platform, which pays you to blog. When you think about it, it sounds great, but there is one problem with this, if everybody gets paid where does the value come from? If somebody gets paid somebody will lose monetary value. I am not going in deeper in the inflation and the reward pool for this part. I hope this sounds logical, if somebody gets money for their effort it has to be subtracted from somewhere.
But let's assume that everybody finds it valuable because you can get paid for your content. And for this reason people want to buy steem. I see something very weird in this, what we are basically doing is buying steem, to pay others for their blogging. Let me repeat that again, we buy steem, to pay others for their posts that we like. Is this what makes steem valuable? I don't think so.
So how to make steem really valuable? The conclusion I made is through building products and services that people want to use. These are the apps such as dtube, dlive and others. Those are what make it truly valuable in my opinion.
At the moment these apps are being updated and improved
If you have any additions or corrections let us know below the comments. :)
Thank you for reading,
Futurethinker
I agree that with more apps being developed and improved will pave the way for the demand and price of Steem to increase.
Good thing you didn;t delved into rewards pool hahaha that is a slippery slope that is hard to get out of.
You mean the explaination or once you have a big part of the reward pool? :P
yes, like utopian, making steem really valuable. Behind the help of a project, contributors are also awarded. cheer @elear my first BOSS on steem blockchain. :)
Yes utopian has very big potential!
steemit in conjunction with steem are a wonderful idea, what I still call the attention is the way to grow without investment, of course always thinking about the future
Very great analysis :] Seems like somebody understood what Mises said about human praxiology and the value of things
Thank you man! I haven't heard of that, but I will look it up!
I would say that what makes something valuable is its scarcity and usefulness as you mentioned.
Money is a scarcity and everyone wants it, hence steem becomes valuable because it's something that has a monetary value in the market. It's useful, because it allows us to make transactions. I think apps help increase that value, as a tool.
I don't agree on money being scarce, as scarcity implies that money is not plentiful. Banks can print money at will and thus increase the supply of it any time they want. In case of money, trust is what gives it its value.
If steem's only value is to transfer money, then there are many other crypto currencies that allows people to transfer money. You can say at this point but steem has 0 transaction cost, and that it is fast, only 3 seconds. Steem is faster and cheaper than most cryptos when it comes to making transactions, but there are already cryptos who can match steem and even will be faster.
But the point is there has to be more to steem than being able to use for transactions and paying people to blog, because this is not a competitive value driver.
it depends on the money...Bitcoin is not unlimited for instance, there can only be 21 million, as opposed to Fiat which can be unlimited. I was referring to scarcity, in the sense of people like you and me having access to a limited amount. It's hard to obtain, hence it's valuable.
It's market value compared to benchmark currencies such as the USD also makes it valuable. Just think Venezuela and how much value steem has to these economies in order to support their families.
With regards to what else you can do with Steem and the value you attribute to that is very subjective, as it depends on your personal use for it. To me today, blogging and getting paid for it is invaluable, even if in the very near future I will be able to do it on other platforms also.
"To me today, blogging and getting paid for it is invaluable, even if in the very near future I will be able to do it on other platforms also."
Value is subjective and can be in the form of different types, like what I said emotional value. The value I am referrering to Steem, is the value that increases the demand for steem, what makes the price go up.
Looking from the monetary value of steem, it decreases your monetary value if you let it sit because of the approximately 9% inflation each year.
Regard from indonesia to you sir @futurethinker, i'm followed you
Hello @futurethinker I think your post is very interesting, I am new in this great world and I think it is important to know about how it is managed economically. I will continue investigating. Thanks for sharing.
Good energy.
Hey @angelica7! Yes you should understand what you are investing in!
@futurethinker Your points are succinct and I agree with them. But, I want to add another meaning to value. I call it "TIME"
Good one! I could write a few paragraphs on that ;)