Steem Power, RCs, delegations, investing, blockchains and global economic models: Value.

I am on a short time leash today, even shorter than usual as I am with my daughter while my wife studies. This means that I have to get my work done during naps and meals plus, I still have to organize Steemfest arrangements. Packing can wait.

@acidyo wrote a post about an hour back on investing into SMT projects through delegation and curation which has some major advantages. The largest for the investor of course is that although some potential can be lost, no personal STEEM actually needs to change hands. What this means is that one can support a project from the pool of resources.

Some people have raised the question in private with me, What is the value of Steem after SMTs?

Firstly, remember those RC credits needed to interact on the Steem blockchain? They are only available with powered up Steem. Even though an SMT only needs a relatively small amount of Steem to create their tokens, they may require a very large amount of RCs to power them. With RCs having their own value, this means there is a trade-off position to sell. Less Steem powered up increases value of RCs through scarcity, more Steem powered up creates scarcity of Steem on markets. All that needs to happen is enough user demand.

Secondly, delegating RCs do not effect ability to use Steem Power. One can still vote, earn curation, sell votes or like @acidyo has outlined, invest into SMT projects or other projects using the Steem pool to fund it without having to release Steem resources. What this means is that not only is Steem Power for RC delegations, votes or trading on price, they are for direct investment into decentralized-funded businesses.

This is where I see the potential for the blockchain to really pull up alongside and pass the relevance of the centralized currencies as in time, there will be so much value held along the blockchains that all kinds of projects are no longer going to require to go to a bank or search for 'traditional' capital investments to fund their startups. We as Steem holders will be able to provide the value required to get what might be to begin with, small projects off the ground that will lead onto larger and larger. Not just us of course, the entire blockchain industry will act in support and the more businesses that come into the loop, the less demand on fiat.

What this means is that there is a great deal of opportunity for Steem holders and in time, the most maximizing path isn't going to be through vote selling. Vote selling at best will return close to 100% of vote value but, it cannot earn SMTs and, it is going to be very difficult to fund projects through a process where a startup must first fund themselves and buy support. If they have the funds for that, they aren't going to vote buy for an additional 10% perhaps.

What they are likely to do is take investors and those investors will be playing a game of long term risk assessment on the viability of the concept and project and will delegate or vote value to provide the support needed. Each percentage put in will give them some ownership of the overall project. If 50% of the project is for investors, that means many investors can split it depending on the vests they put in. This could be partly tokenized or a percentage of future project profits depending on the structure of the investment.

People think a lot about the bidbots and their future on the platform but as more opportunities arise for Steem Power usage, they will have to compete for delegation and interest. As more of the Steem pool gets distributed t more points, they will lose influence over the pool. @fknmayhem mentioned on @acidyo's post:

And also not to forget that Steemit Inc. has an upcoming $20m fund, to be used in both fiat and STEEM/vests for future SteemApps. That additionally to the huge amounts of STEEM they hold and can still throw in the pool, mostly to “fund”, read accelerate, development of SMTs. source.

What this does is not only put more vested draw on the pool that will likely be maximized by the SteemApps lowering influence of bidbots, it will attract users to earn through those same SteemApps without having to pay for the support. This increases the numbers of users willing to use the Apps and with the ability to onboard, they can biring many more in. But, those 'many more' will require RCs to be able to interact with the blockchain. The App can provide some to distribute their SMTs let's say but, they will likely need more which means, RC value increases for those with powered up Steem.

In time, Powered Up STEEM will be able to be utilized in a multitude of ways that collectively could far outstrip the earning potential of vote selling for 100% return. Combine this with @steem-ua types of delegation-powered distribution projects, more and more Steem slowly gets locked in by a wider range of users and more and more points of distribution are created with increasing vested draw on the pool. There will be less on the markets. Combine this with algorithmic modelling and reward systems through Oracles and things change again.

Something a lot of people don't realise when it comes to the 13 week power down period is that it means dumps are much harder. What this means is that there is less possible Steem on the exchanges as most is locked into account using it to vote with. There is about 25% of the Steem on the exchanges which means to pump the Steem market cap, it only requires a quarter of the Steem to move and the chances of fast dumps are severely lessened. Combine this with the fact that as price increases, vote values and therefore SBD volume increases, more accounts could take advantage of the increased liquid rewards and hold their Steem investment rather than sell and reduce their coin count.

As I see it, Steem is a much more versatile coin than people give it credit for and there are an increasing number of ways to utilize and earn from it and this will continually shift the dynamics of it. While most other coins are buy and sell for fiat profit, the Steem utility makes it a far more advanced economic model that could be used to satisfy a much wider range of needs than fiat alone. In my head, it is just a matter of time that the rest of the users on Steem catch up with what is actually possible here. Hopefully more realize their opportunity before the masses pour in as it would suck to be an early Steem adopter and not take actual advantage of the position.

While people are worrying about whether Steem will survive as a blogging platform or whether it can deliver for many, there are others who are building a system that could fundamentally change not only the way we view and reward content, but the very future of economic foundation and theory. We can see from the state of global finance and mounting debt that the models used are not able to satisfy the globalization and required distribution of resources.

There is more going on here than whether a shitpost hits Trending.

My daughter is awake and demanding my attention so I will end this here. But even though I have had to gloss over and skip a fair bit, I hope that somewhere in this rush of a post is something of value to think about or add to the conversations of the future. I will get to comments later.

Taraz
[ a Steem original ]