RE: Video Series For DTube/Steemit Beginners

Good call on making a video about witnesses!

I definitely want to do some more research before I make the video about how Steem creates value. But from my understanding, the price for pretty much all cryptocurrencies right now is set by speculation in the market. Steem is currently at about $3.50 because that's what supply and demand has dictated.

Like Bitcoin, there isn't much you can use Steem or SBD for, but as the market grows for products and services that can be purchased with cryptocurrencies, the value will be based less around speculation. With Steem, there's the potential for markets to open up that take SBD for goods or services. Also, as the platform grows, people might be willing to buy Steem less as a speculative investment, and more as a way to increase their visibility on Steemit or DTube and earn more curation rewards.

Here's an interesting quote from this article that take a look at what goes into the value of bitcoin:

Bitcoin's value depends on "transactional" and "reservation" demand.

It is important to note that the total market value of a currency, its "monetary base", is driven by two things, transactional demand and reservation demand. We can think of Bitcoin's average daily "float" as the analog of our economy's M1 money supply - the currency needed to satisfy transactional demand for goods and services. Similarly, we can think of the Bitcoins which are "hoarded" by speculative investors as the currency needed to satisfy reservation demand for secure long-term savings. Combined, Bitcoin's float and reserves comprise its total monetary base, which is similar to our economy's M2 money supply (M1+money in savings deposits, money markets, etc).

So the monetary base relies on both consumers and investors who believe that the Bitcoin technology will power a certain volume of economic exchange today and in the future. Speculative investors in particular have shown an extraordinary willingness to buy BTC, leading to a much larger monetary base than would otherwise be expected for a currency with bitcoin's transactional volume.

And that's ok! As long as the transactional demand for Bitcoin continues to grow exponentially in the coming years, the balance between Bitcoin's float and its total monetary base will likely reflect that of other global currencies. (To learn how Bitcoin enters into circulation, read, "What is Bitcoin Mining?")

If you find anything that explains all of this stuff well please let me know!

Thanks for watching! 😀