Billions of dollars, people and transactions

How many people does it take on Steem for it to have a super high value? I find this an interesting question as over the last 3 years, it has produced 300+ million Steem tokens for a current evaluation of 131 million dollars. Is that a lot? Yes. Not many businesses will ever reach that kind of evaluation.

But, this is not a business because it has no CEO, no tax file number, no corporate structure at all. As far as the world of economy is concerned, blockchains are an entirely new animal in the waters and, they are going to start encroaching into the territory of traditional business very, very quickly. They of course already are but, it is being kept relatively lowkey on the public announcements.

I can't answer what is the critical mass point that takes Steem to the mainstream hoards but, it is interesting to have a look at what a relatively small group of people could develop in a year.

275 billion - That is what 5 million people can generate in a year.
Well, that is what the GDP of Finland was in 2018.

That is a whole lot of various products and services being bought and sold but this is where it gets interesting - all of that value has to be transferred in some way or another and for the most part, it is going to run through the banking channels that will always take a slice of the pie. That is a massive amount of value moving around the place and a lot of that is going across boarders also. Just the transaction involved must be enormous right?

5 million people - that is not many is it?

Then consider that as automation starts to bear down on local and practical jobs, there are going to be more and more people turning to the internet for revenue streams and savings, and 5 million doesn't sound like a great deal to onboard quickly and, we are talking globally.

One of the reasons I would like to learn about the transaction capabilities of the Steem blockchain is because I believe that what is really going to take Steem and the other blockchains mainstream is the ability to transfer micro payments globally and on Steem, do it without fees. Why do I think this?

Remittance

A remittance is a transfer of money by a foreign worker to an individual in their home country. Money sent home by migrants competes with international aid as one of the largest financial inflows to developing countries. Workers' remittances are a significant part of international capital flows, especially with regard to labour-exporting countries.source

And what kinds of numbers are we talking?

In 2017, India received $69 billion in remittances, higher than any other country. This is also higher than the earlier World Bank estimate of $65 billion and marks a nearly 10% rise over the previous year, says a report released by the financial institution on April 23. In 2016, remittances declined nearly 9%. The 2017 figure is, however, still below the record of $70 billion received in 2014.

Overall, low- and middle-income countries like India received record overseas funds of $466 billion. The inflows to high-income countries improved from $573 billion a year earlier to $613 billion in 2017.source

466 billion dollars sent home from people working abroad. A lot of it is sent in envelopes to avoid paying fees.

Do you see the benefit Steem could offer these small scale transactions on a mass level? Imagine a worker in the US buying 100 dollars worth of Steem and 3 seconds later their family in Delhi has it and transfers it into rupees 3 seconds after that. The difference in value due to the exchange is negligible when compared to a bank and with so many people transacting small amounts, there will not be major spikes caused by volume buys as there will be so, so many small transfers going back and forth creating high volumes. Volume matters doesn't it?

The value of the Steem Stress Test??

The test I described in the other post would have 6000 accounts send 170,000,000 transactions in 24 hours across the blockchain. However, there was an ulterior motive to the test too as the blockchain doesn't care how much Steem is sent in a transaction. What this means is that if each transaction was made up of 1 Steem, it would have a current value of 85,000,000 dollars moved in 24 hours but, if each was a transaction of 100 or 1000 Steem (which puts no additional stress on the infrastructure), it would be 8.5 or 85 billion respectively moved in a 24 hour period - without a fee in sight. That'd have to be some kind of Guinness Book Record, wouldn't it? And all from a little, 3 year old platform that barely has 50k users a week.

I wonder how much Paypal does in a day - and will they do it for free?

Not only this, once people are accustomed to transacting via blockchains and tokens directly from phone to phone, they get used to all kinds of interactions and start to demand similar interactions from their other services. The developing world is a place where free transactions of low value transfers is a necessity and it essentially empowers those in need to have access to funds without losing large percentages through fees to middlemen.

I predict that while the western world is going to be looking large on Blockchain utility, the developing world is going to be getting very, very practical and finding ways to utilize it as a very granular and low cost level to satisfy their daily needs.

One of the most overlooked features of the Steem Blockchain is the zero fee transfers that are possible because of the witnesses processing the chain and taking a percentage (~11%) of the pool directly. It is this feature that can be leveraged in the future by those who are seeking to send money home as they can effectively buy a volume of Steem and send it precisely where they want it to go in three seconds.

So, going back to the 275 billion dollar GDP of Finland, that test with just 1000 Steem in 6000 accounts could move the equivalent value of the GDP of the 5 million people in Finland, in 3 days. How long is it until all of those businesses and users that are moving their money internally and externally for a massive amount of fees that are taken at various points along the supply chain on pretty much every transaction start leveraging the ability to send near or feelessly on blockchains - What if they start transacting in tokens only? Would be interesting as essentially it would mean that the businesses could create their own tokenized economy that cuts out even the governments of their country and rather than transacting centralized currencies, agree on something digital. It is going to get messy.

There could be literally billions of people who could near immediately start leveraging services that improve the economy of their lives, which would at the very least, force the centralized systems to change their models. But, how can such top-heavy businesses compete with free? Well currently they do have the benefit of convenience but, that is slowly changing too. As I see it, the inevitability of a blockchained and tokenized world is just over the horizon and if Steem is able to prove itself as not only a leader in the industry but a driver of change, it would shift the entire movement up a notch on the global level.

Just some fun thoughts for a Saturday night.

Taraz
[ a Steem original ]