[Vlog] Smart Media Tokens - A counter-argument (Inital thoughts)
Following on from yesterday's Easy Overview, I've done a quick video with my initial thoughts about Smart Media Tokens (SMT) on the STEEM blockchain.
It felt more appropriate to talk about SMT on a macro-level, so most of what I discuss is bigger picture rather than the nitty-gritty of the solution, like I did when I reviewed Snip.
See bottom of the post for the video.
To summarise my views:-
Two STEEM-related trends
There are two trends that impact STEEM. One in the cryptocurrency space. One in the social media space.
Tokenisation in crypto - In cryptocurrency, there is a trend towards platforms that facilitate tokenisation and the ability for Start-ups and businesses to create ICOs (like Ethereum, Waves, NEO, EOS etc).
Audience preferences in social media - In social media, there is a trend away of audiences away from visit websites that exist in a silo and towards big social media platforms (like Facebook, Twitter, Instagram etc)where people can view all the content they like in one space.
STEEM's choice - STEEM/ Steemit has a choice. It can primarily be a Smart Contract platform that facilitates other business or be a social network that pulls in end-users only decentralised and with rewards going back to users. Or it can try to be a hybrid of both.
'Micro STEEMs' would struggle
There are many factors that make STEEM work (kind of) that are unlikely to work for a SMT:
Valuation - In my view a lot of STEEMs valuation is based around (a) speculation that Steemit or one of apps has a chance of being one of the dozen or so platforms where the majority of online users go (b) STEEM can become of the de facto currencies of the internet as a consequence. SMTs don't have this pull so are unlikely to have a fraction of STEEMs valuation. Without value they are meaningless tokens. There will be a lot of people selling these tokens but who will be buying? And why?
Self regulation/ troll whales - the value of Steem Power incentives large holders to help regulate and promoted desired behaviour on the STEEM blockchain. Will the same apply to holders of say the New York Times Coin (NYTC)? I'd image 'investors' in any ICOs will be interesting in flipping a profit than the nitty-gritty of say downvoting troll whales!
Reputational risk - Will the NYT want to deal with the hassle of ensuring the community in their comments sections is regulated in terms of people gaming NYTC rewards? The reputational risk a NYTC could bring wouldn't be worth it for a 'nice-to-have' token.
SMT band-aid - for smaller websites, that generate little traffic, having a token will be like pissing in the wind. Particularly as any website can have the same thing for as little as a dollar. As an offering, SMT is a band-aid for the websites/ business models that are broken. A struggling website owner who thinks that tokenised incentives will turn around it's fortunes is deluded. These website owners should focus on going to where their users are and getting a presence there. Audiences have spoken. They want their content on one platform. Offering a token is not going to change that any time soon.
Focus on delivering core proposition
- There can be only one! - STEEM (and it's applications) should focus on being one of the dozen or so platforms where social media users go. Ultimately it's aim should be to rival Facebook and Twitter. This means developing the Steemit interface, creating Communities (well overdue), helping developers build dapps and marketing the core product(s). STEEM has a compelling USP, a place where users can get rewarded for their engagement. STEEM has a great infrastructure, free transaction, quick confirmations and potential to scale. In my view the focus should be on delivering a First Class Product for STEEM before outreaching to other platforms that might benefit from the technology. Else STEEM risks diluting the value proposition before it has even taken a foothold.
I have to agree with you, this whole shenanigans with smt kills it a bit for me. They should put their efforts into building an already awesome community to higher levels.
There is so much small things that could improve what we do everyday here, I find it sad they put so much energy into something that people don't need...
Yet at least.
You bring up some very valid points that brings great value to this discussion. As my understanding of SMTs deepens, I see the incredible value there. I also see the value in continuing to build Steem into what it can and I agree, should become. One thing I've learned in life, is if you try to do too many things at once, they all end up being done half - assed.
Your thoughts carry much weight and I agree that both sides can bring incredible value to the block chain, but it has to be done in a very efficient way that prioritizes what's best for the long term growth of the Steem block chain while also sustaining integrity of the currency/ecosystem.
Have been very positive about the SMT developments, but your insights here make me reconsider.
You are right, the value of any token or currency is determined by investors and what they are willing to pay for it. So yes, without large investors backing a specific SMT, it's indeed like pissing in the wind.
On the other hand, when you do have a big community and lots of capital at your disposal (the NYT example) there is added value for an STM since you can set of parameters differently than here on Steemit. Your settings will impact the extent of a potential troll whale problem.
Believe me you'd need to be a killer salesman to get close to selling the idea of a NYTC to the NYT. The reputational risk, lack of a proven benefit of having your own SMT, the maintenance... the list goes on.
Far easier to sell the idea that they need to have a presence on Steemit because that is where their audience is. Grab the audience and the institutions will follow. It's been that way for a long time now.
SMT === Pissing in the wind -> For startups
Because the investors go where the audience is... which is Ned's main point.
But the reality is:
those big players have many investors that are not really interested in changing anything until their business model is actually threatened.
So how is SMT any different than EOS is my question.
And is SMT a response to it?
EOS is more like an operating system for smart contracts, with blockchain at it's core, and it's really perfect for things like automation of business processes, including robotics, AI, legal and messaging.
I had always assumed, Steem would move over to EOS when available, as it's underlying blockchain ;-) No?
I guess not! (Ethereum envy?)
I think SMT is more of a platform for token sales organized around publishing... but can do more than that.
A solution, looking for a problem perhaps ;-)
I totally agree. This SMT afraid me cause maybe is too ambicious at the moment.
I admire the ambition. I question the timing and whether it is a priority.
Time will tell. Steemit is still a baby taking his first steps, sometimes they fall and then got up.
Agree. Sometimes you need need to try new things and see what sticks. However I'd question throwing a baby in a river before it has learned how to walk, let alone swim!
Quick sidenote, babies can swim before they can walk. They do it for 9 months before coming into the world ;-)
A solid critical assessment of the challenges and possible fork in the road decision that Steemit faces as it relates to the tokenized incentives initiatives. I tend to lean towards your latter argument that suggests that the large scale platform model is a wiser direction to take from a long-term strategic perspective, as it could mitigate pressures from existing and future competition. Thanks, and please due offer further analysis covering this very interesting topic.
If I get the time, I will.
You got some very solid points. Strong argument.
Just wanted to point out a few grammar errors which I noted:
A struggling website owner ** that** (it should be who)thinks that tokenised incentives will turn around it's fortunes is deluded. These website owners should focus on going to where their users are and getting a presence there. Audiences have spoken. They want their content on one platform. Offering a token is don't (should be not) going to change that any time soon.
Good spots. Thanks - invariably I don't get enough time to proof read my posts as thoroughly as I'd like.
I agree. These SMTs seems like they were a lot of work when the communities piece is the single thing holding back steem. I used to love steem when it was smaller but now that it's bigger it's too hard to find content I like. I have started using Reddit and medium for the topics I like because both have good ways to narrow out the noise. I rarely use steem anymore when it was my life six months ago. If steem inc had time to do all this surely they could have made communities happen by now.
Sorry to say I agree; people have short attention spans, and even shorter levels of patience for sign ups, filtering and search, sub-communities organized by interest.
Good points