A Steemy Dream…SMT's for me the complete dummy!

in #smt6 years ago

This post is to help people understand SMT's and why they will make a huge difference to Steem. I'm noticing a big drop in people interested in my IBT competition and other posts, so I figure we need more info to breathe some positivity back into the Steemian community here on Steemit, i.e. so we don't lose our best bloggers while prices are low and people are suffering crypto depression...

For those participating in the IBT competition I'm sorry for this post interruption (I normally don't do posts in between as it confuses people - but this is a special case)...

Why do I want to know more about SMT's

I know there are allot of people nervous about all the effort they have put in to Steemit and some are even wondering why they didn't just take the earnings at $8 and run...Well outside of the obvious, i.e. everyone who went to EOS is now sitting around and waiting and will  get bored, some probably come back to Steemit/ something that is actually built and working while they wait...but there is also this thing called SMT

Anyways I thought if a person with a mild technical background like me is struggling to understands @ned's vision of SMT's then perhaps other people are as well?. 

So I'm going to attempt to explain it with a analogy (blind leading the blind).

This is hard because I don't really understand myself haha, but I'm hopeful a passing by Witness, Whale or Dolphin or someone who cares about Steem like I do... might jump on this post and leave a reply that explains it!

So I had this weird dream last night…

In the dream I was a manager of a small business and I had 30 employees. I wanted my business to be successful and I wanted each of the employees to be fit and enjoy work…I wanted my business to perform well.  

So part of my strategy was to find a way to get and keep my staff fit and healthy physically. 

Surprisingly/suddenly this great new gym opened, next door; it’s 24 X 7, it’ also really convenient next door and there are hot chicks working out!….maybe it’s a sign?

then I read on a sign in the window  

“With this special gym you can have as many workouts as you want! As long as the class hasn’t been booked out. We call this gym a ‘Resource Centre’ and it’s opening soon for business."

So I wanted to approach the proprietor of the Resource Centre… you know to buy some memberships…but I’m looking, looking, and not finding?? 

I do some Google searches and find out there isn’t a single owner, instead the gym is owned by the community, lets call this community "Steem Owners" and to do the classes is a little complicated, i.e. access to membership is one thing, but booking a class with enough free space to fit my 30 employees is another thing. So I ask one of the workers leaving the Resource Centre, called ‘Jim’

Ok, the photo above isn't really Jim, its me..but this is a dream so all sorts of crazy stuff is going down. Anyways..

“Hey Jim, what do you need to work out in this ‘Resource Centre?’”.  

And Jim goes  

“Dude! Like you either needs to have shares (lets call these SP) in the company, which in turn will give you access to ‘Resource Credits/Class bookings’ OR you can purchase so many ‘Resource Credits/Class’ bookings from me guaranteeing you a booking".

So I think about it... and I really care about my staff’s health and the facilities of this Resource Centre look amazing so I say: 

“ look I want some guarantee’s that I’ll always be able to get all 30 of my Staff to attend for as long as I need!. I’m guessing that means I must own the shares right?” 

So Jim goes  

“It doesn’t really matter…As long as you have the Resource credits in your hand; you have the classes booked and your set” 

So I’m like “Errr… but what if I run out of Resource Credits? how am I guaranteed you will give them to me so I can be sure my staff can get the value from them?” 

So Jim goes “Here I’ll give you this magic ring (let’s call it a SMT) and I’ll immediately give you the resource credits as you need them for say 30 staff for 3 months for this agreed fee. This SMT/magic ring will be sure you keep your side of the bargain and I’ll keep mine, it will give you special Resource Credits, just for your unique requirements at the Gym”. 

So I’m like “Wow! That’s cool, so we don’t need to worry about late payments or problems, it’s rock solid yeah??”

 ..and Jim is like  “that’s right, the magic ring makes sure it happens as agreed and we can call them Nige's Resource Credits if you like”. 

So I’m like,  “but...the Resource Credits get used every time someone works out right? So like, how do you keep getting them and giving them to me?” 

And Jim pulls out a magic pot and says “I’m not really sure how?... but as I use up my Resource Credits, this magic pot I was given when I signed up fills up with more…"

"The only thing I know is I need enough SP to not only fill the pot for the number of classes I want attend, but over fill it, so I can sell  the excess Resource Credits on an ongoing basis to someone else”. 

So I says “Why…this is a crazy system? what value is the Resource Credit that I’d pay you for it?” 

And Jim reminds me “Without the Resource Credits, you can’t use the gym, they are really the thing that allows you to make use of your membership and access all the great equipment and high quality classes”.   

And then I say “So the steps are 1. I sign up for the Resource Centre 2. You hand me a magic pot 3 the magic pot generates Resource Credits which I can use to access the gym equipment, however if I don’t have enough I can’t do all the classess 4. I get some SP and then the pot fills more quickly and I get more Resource Credits, until I have enough to cover all 30 of my staff for when they need it?” 

And Jim goes “yeah that’s about it, but I'm not 100% sure yet as this isn't yet open for business”. 

So I goes. “Remind me again how I get SP?” 

And Jim goes “You either go down to the market and buy some for market price, lets call this place the Exchange or you do this specific workout at the gym, lets call it Posting on Steemit or by using other Steemit apps. The higher the quality your workout/Posting, the more power you put in the grid and the more the Resource centre pays you for coming”. 

Then he goes “One last thing, right now the Resource Credits are called Bandwidth and also you can’t give them away or create special Resource Credits with the deasl. This is a Resource centre ‘special thing’ starting soon called SMT! at which point the bandwidth won't exactly work the same way”. 

So I’m like..  

“Wow! If this Resource Centre thing goes off one day and I actually own allot of shares/SP I could not only be guaranteed to send all my people to the Resource Centre  for free ongoing, but if they are off sick or something I could lease out the ‘Resource Credits’ and make a tidy profit on the side?"

So then I say

"I mean shit!.. I could even just buy up a heaps of shares now while the price is low and on-sell the excess Resource Credits later when the knowledge about all equipment at this gym spreads”  

Then I think to myself… What if my quality workout/posts also had a short-term benefit maybe some bonus Resource Credits as well as more SP, would be like a triple wow! 

So then I say

"But what if a big company comes along and need allot of Resource Credits..like more then I can generate, can I just sell them a few or will they search for someone who can sell them more then they need"

and Jim goes

"Well there is a decent chance you can add your excess Resource Credits, to a community pool. Here the pool will service the contract or multiple contracts to the gym and you will get your share of the fee".

Then I woke up in front of my laptop  

Haha, now I know this is possibly way of the mark about what SMT's are about...but the truth is I just can't work it out. Like most people I have a life, work full-time, Uni and other commitments, so I don't have heaps of time to understand all the technical parts, I need something easy to set my mind on and grasp. 

Could someone please who is passing by, using this Gym membership analogy or another easy to understand analogy?? explain SMT's, basically so even I can understand, I would be extremely grateful.

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Hahahaha man, what a dream!
I can't remember the last time I had a clear memory of my dreams, but it definitely wasn't about SMTs.

Let me try and chuck some words into this super confusing arena.

Say I create a Smart Media Token called NINJA. I want them to initially be worth 5 STEEM each so I purchase the STEEM I need and convert 50 STEEM into 10 NINJA tokens.

I then award NINJA tokens to people who complete my super hard obstacle course... everyone is super excited about this, and soon people are buying these tokens off each other for 10 STEEM each... the value of the NINJA token has risen in the marketplace.

You complete the obstacle course and so I award you a NINJA token... you can keep it and hope it appreciates, sell it on the market for 1 0 STEEM or convert it directly in your steem wallet for 5 STEEM, or give it to someone else or upvote someone's post with it.

Dude! thanks for commenting.... keen to work out but feeling a bit dumb.

Soo firstly I'd love to do your obstacle course and if you had one I'd pay steem to do it! i.e. why bother with ninja tokens?
...i expect cause you hope the ninja tokens will be worth more then Steem for some reason? but I'm not sure how your creating additional value from nothing?...but I'll try to think about.

Sooo you would be hoping Ninja tokens rule!!! like more then Steem, hmmn not insulting Ninja tokens but that's a big thing to say...it sounds a little bit like bitshares and all these random tokens people made and tried to sell for more then what they were created for?

I guess the key is people trade the token for something which would otherwise cost you $. Soooo like your hopeful the word gets out soo much about your great obstacle course that it drives the ninja token up and up! So the value is the obstacle course, the demand and popularity increases and so does the value of ninjatokens. So it's like holding a ticket to a concert that sold out, everyone wants the ticket. So the ninja token is the ticket.

So on the other side of the fence is the Steem blockchain which is pushing the tokens around...I'm keen to understand how owners of Steem benefit in the background from all the tokens, such as Ninja token. i.e. as a SP holder do i automatically get benefit or would i need to delegate to ninja tokens?

That's the thing, SMTs are probably just cosmetic, but wouldn't it be more exciting if you were awarding IBT tokens instead of Steem/SBD? It's the same, but funnerer...

As a steem holder you'd benefit because I would have to buy a bunch of steem (and maybe SP for bandwidth) to convert to NINJA tokens... so that would drive the price up.

SMTs don't really add value to SP holders, except for the fact that companies would need bandwidth in order to interact with people using their tokens.. imagine if Nike wanted a NIKE token to upvote people with for writing shoe reviews... suddenly they're investing a couple of mil USD in Steem to create their tokens, and use the bandwidth... the supply of STEEM doesn't change... so that means demand goes up.

Ok...well its interesting, but bit disappointing - feels a little bit like making a token on bitshares. I was hopeful that Nike would go I want some 'bandwidth' to run my Nike token on the blockchain, but I don't want to buy steem to do it, instead I just get some from a SP holder...say me, and pay me a small amount since it's my SP pushing around the Nike tokens in the background...well my bandwidth which is unused (I always have 99% spare). I think this would be more interesting... Still IBT tokens would be fun :)

Oh.... I think they'll need to rent bandwidth from you too, and it looks like the Steemit team are working in the technology to allow us to rent out our bandwidth.

If a big company want to produce content on the blockchain or do transactions then they'll need a lot of bandwidth, and if they've converted their Steem to their own token, that's when they might need to rent bandwidth off us... a company might not be interested in buying Steem to power up since it takes 13 weeks to get that back... so SP might become a super precious commodity yet...

Yes, it is similar to Bitshares tokens, but the difference is that Steem comes with a ready made audience, a content system and a great Alexa rating. You can give a Bitshares token to someone via their wallet... but on Steem you'd be able to upvote someone with a NIKE or NINJA token for their post or comment. That's the difference.

Cool, good point! - the Steemit factor is a significant value add over a bitshares token....bring on the SMT!!!

Well that was as clear as mud and I'm even more confused now but dreams hey, and that was one hell of an entertaining story XD

Hehe sorry, it's muddy as heck for me. I am hopeful through these great replies we will get the answers we seek :)

Great analogy, Nigel. Very apt.
Anyone with an account will be able to start their own SMT under that account name, just by filling out a webform.
The more SP in that account, the more bandwidth/Resource credits it has.
An account with only 1000 SP might be able to support 2000 transactions a day, for example.
That would mean that account holder could comment on 10 posts, upvote 20 posts, write 2 posts himself, and holders of his SMT could send those tokens to each other 1968 times before they all started getting 'transaction error' messages. (this assumes all actions; voting, commenting, posting, sending the SMT, would each cost 1 resource credit).
A big use case for SMT's would be for somebody credible in a subculture to start their own currency without having to run their own blockchain.
Dr Dre fires up LAHipHop token and adds the appropriate widgets to his site, LAHiphop.com.
Performers will want to buy or earn these tokens, as they carry a lot of street cred (do the kids still say that?) and hodlers of LAHH get to decide what's hot and what's not in that scene/on that site.
Part of staying credible would mean he'd want to make sure transactions happen without issue, so he'd buy and hold 10,000 SP, to ensure LAHH can support 20,000 transactions a day.
A year down the track, his site is huge, and people love the tokens.
He's hitting 18,000 transactions a day and wants to buy 10K more STEEM to power up and support 40,000 transactions a day, but the price has increased to $50.
He doesn't have a spare $500,000.
He goes to the market and leases an additional 20,000 resource credits from you at 1% per month/$5000.
This is all gravy for you, since you keep all the voting power and only delegate out your spare resource credits/bandwidth.

Honestly Matt, what would this platform do without you?

P.S) I don't think the kids say 'street cred' anymore, they communicate solely through memes... if they were to use actual words I reckon it'd be 'ste credizzle'.

I lost my ste credizzle when I suggested he doesn't have a lazy half mill to spare.

Thanks Matt - seems like we are on the same page.

Wow! that would be super sweet and definitely my hopes are for this outcome for SMT's :)

Can't see why it won't work that way.
Imagine how many people want to get involved in blockchain tech, and have the ego to want to name a coin after themselves (or their brand) but lack the technical skill to build their own chain.
The smart ones will buy their SP.
A lot of others will wish they had, as the price of leasing Resource credits climbs.
If Dr Dre is a big hodler of LAHH tokens, he'll need to either find that half mill or keep paying you, otherwise his customers can't use his currency and it loses its value.

The feature of leasing the credits makes a heck of allot of sense and would drive the price of Steem.

I could see medium-large sized companies being attracted to the rental option, it makes good financial sense for them as they aren't increasing their assets (buying Steem at full price) and as you said don't need to invest in the technical for their own (doing it yourself generally means risk and sunk costs).

So they Just pay a fee once a month - you give them some excess bandwidth/credits and win/win! as long as the ability to lease again is a definite and access is definite, then its a great low cost/risk way to get yourself cryptofied. hehe is that a word?

Thanks for your comments Matt; bring on SMT!

Nice - bandwidth pools! (this is sweet) Certainly it hints at this...

The other thing we haven't looked at much with this post so far is the reward systems with SMT.

@ned's previous post tells of a new concept "oracles", which looks like a move to a single account vote reward system. If they do this they must do it in conjuction with bandwidth/Resource credit loaning or it would weaken the benefits of being a major shareholder.

It's implied that an oracle...which is a thing that determines if an account is an individual and are who they say they are also checks the attributes of the voter to ensure they are a good voter (not necessarily a rich voter, like currently).

Just from top of my head, I'm thinking if I created an IBT token, that I might be able to set some generic properties for the oracle to check?. For instance if I wanted to reward IBT players, then an enroled players, the oracle checks for this and they might have a stronger upvote (and get a large reward payout). I might also say, if you have a high Steemian reputation, then you have an even stronger vote OR it could be more binary.i.e. Your vote is paid back only when you meet all the criteria of the oracle and your pay back is stronger if you voted early.

To be honest the whole thing gets confusing when you try to think of how tokens might work with content on Steemit...chances are it wouldn't work at all and token will be exclusive off steemit platform, and application designers who use the tokens need to do API calls or something to an Oracle.

My understanding is that an Oracle is just a holder of a list.
I might advertise myself as a Never powered down Oracle and publish a list of those accounts.
You might decide IBToken should be issued to.
Committed, quality authors who've previously won the IBT.
When you launch the IBToken you choose that it'll go to posts by authors on these lists;
Unique individual.
Good actor.
Never powered down.
IBT winners.

Token holders will vote for an Oracle to be checked for each requirement. If I'm crap at updating my list, you and those who've previously earned or bought IBTokens will vote a competing NPD Oracle into the role and he'll earn payment in IBTokens instead of me.
Some oracles, like unique individual and good actor will be hotly contested and very lucrative, being paid by dozens or hundreds of SMTs.
Others, like previously won IBT will just be referenced by a single SMT.

Fantastic! cant wait to hear more about oracles, thanks Matt I certain have a better handle on it now. I hope others who were a bit lost also have a read of this post and its just as useful. Cheers

Coins mentioned in post:

CoinPrice (USD)📈 24h📉 7d
CSCredits0.288$3.46%-5.73%
EOSEOS6.989$-2.36%-19.14%
SMTSmartMesh0.034$-0.46%-8.62%
STEEMSteem1.337$-0.22%-14.36%

@lordnigel more articles will be?

? not sure - could try under #SMT tag

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