There has been a shocking amount of comments below @steemitblog's latest post (where they announced SMTs again), claiming that they wouldn't be necessary any more as we have steem engine now.
After quite a few discussions in comments and especially on discord I decided it's best to write a post telling you why you're wrong, so I can leave it behind.
It seems a lot of people don't know why crypto actually exists and what it means to hold a decentralized token.
In a nutshell: Satoshi didn't want us to have to trust centralized entities any more. Everything in Bitcoin and alts is trustless, and a single actor has no big influence or responsibility. To be considered a part of the cryptoverse you have to follow this standard.
SMTs will do that. You don't pay individuals to provide a service for you, but the Blockchain to handle everything from issuance to transfers to state calculations.
While steem engine tokens certainly have their use case (i.e. DEC, a token which is clearly connected to a company providing a service using them), they are by no means comparable to other alts/tokens we know.
The centralization at the company providing the service means they will never be listed by other exchanges except the internal steem engine one, as those would need to fully rely on the issuer to keep their service up and not act malevolently.
As long as there is no mechanism to distribute the responsibilities and remove the need to trust anyone without steem engine being able to influence that, this won't change. If it would change, they would lose their business model.
I don't intend to keep anyone from playing around with the possibilities. But to me, those tokens are nothing more than a placeholder for projects waiting for SMTs, and to become listable by outside exchanges they will need to switch later.
I try to explain this whenever people ask about my project tokenizing. There is zero benefit to an existing project with a working model tokenizing on steem engine, except to participate in the money grab.
Since I don't need the money grab to survive, I would rather wait and tokenize correctly when there is a decentralized consensus protocol.
Great article! I was shocked about the many weird and bad comments under the article about SMT´s too. Nice that you are explaining the difference here for the people who don´t understand that the Steem-Engine Tokens are not the same as SMT´s. Best regards. Jonas
Thank you for this article!
You explain something that is on my heart for weeks or even longer!
Ha ha, have people been losing their sht over this on the steemiblog post 🤣
It's not rocket science, or even that hard to work out that steem engine is centralised by its very nature (not saying that's bad) and SMT's won't be.
Sometimes it's kinda fun to watch when people go bonkers over these types of things. Sit back, crack open a beer and enjoy the pointless arguments.
Good that you're clarifying it for people pharesim.
I would say it's not hard to see how SteemEngine could become decentralized. You just need more nodes than one. There is nothing intrinsically centralized about it, but here you are talking about rocket science and insulting the intelligence of anyone who thinks differently?
Interesting strategy.
!popcorn
Mmnnnnnn... Popcorn. Tasty 😆
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Highly rEsteemed!
Respectfully... Steem-Engine is a replacement for SMT because SMT doesn't actually exist... except in some heads for now. Steem-Engine is Real and running. So "replacement" is a poor word choice for this discussion. Instead maybe point out that Steem-Engine is an adequate example of what SMT should be able to employ if it were an actual "Thing."
~Kind regards
Thanks for this post.
May you clarify it to me how steemEngine's tokes relly only on issuer?
There are no miners/witnesses? All the data related to blockchain are stored in one place? What happens if SteemEngine stops working?
Sorry if those questions are amateurish, I would like to know, but not that much to find it out for myself :D
Data is stored on the blockchain, in custom json transactions.
But as anyone can submit custom json as they like, that needs to be validated (is the sender really in possession of what he's claiming to send). Validation is happening centrally at steem engine. If they stopped working it would not be clear who can validate, as there is no consensus mechanism. From that moment the tokens are unusable. There are different options what could happen then
Steem Engine is making progress towards decentralization. And they’re doing this faster than SMTs are being developed.
Exchanges can run their own validation nodes so they do not have to heavily rely on Steem Engine’s infrastructure, even now.
Can it be improved? Yes. Is it improving? Yes. Should you be worried? I think it’s healthy to be concerned and continue to press them to handle this aspect properly.
It's only possible to assess the current situation. It surely may improve in the future, but it's important for users to know what they are getting into right now.
And of course development on top of an existing protocol is faster than making changes inside the protocol.
Even if they address all the issues and create a real decentralized product, exchanges still will have the overhead of replaying not only the steem blockchain, but also filtering out the steem engine related transactions, which will take considerably more time on itself.
It would have been way more efficient for everyone to develop the functionality in the core. But of course that would have required qualifications few developers have, and wouldn't have allowed for easy monetization of a half finished product.
They can do this, and it currently takes about three days if they already run
steemd. There are improvements to speed that up. Or, they can bypass this option and just replay the sidechain from a block log which takes less than an hour.This is a viable, safe option because checkpoints can be verified, in theory, although a little work is still needed right now to ensure this option is cryptography verifiable. But we’re talking about the hypothetical scenario where they’ve solved all of the decentralization issues, so checkpoints will be addressed too.
Thanks for those insights! Definitely interesting to see where everything is heading.
End-user validation of embedded consensus works fine and is in fact highly decentralized since validation is the responsibility of every single user and not some potentially-centralized set of validators. Any custom_jsons that violate the consensus rules can simply be ignored. It would mean that the user spent RCs to send a custom_json that does nothing at all. In fact this still relies on Steem's own witnesses to determine and finalize the order of those custom_jsons (since changing the order may change validity), which what happens now.
The most used token in the world, Tether, works this way. It is implemented using Omni, which is an encoding layer on top of Bitcoin. Nothing prevents people from submitting invalid Omni data to Bitcoin, since Bitcoin nodes don't even know anything about it, but the Omni nodes (including those run by exchanges) will ignore/reject it.
I don't know that steem-engine works this way, I've been told conflicting stories including by people who I would expect to know what they are talking about, so I find the whole thing quite perplexing.
Lack of a clear and well-communicated story on how it actually works is perhaps a better reason why it isn't ready for prime time than any clear technical obstacles, but I'm kind of guessing here, for this very reason.
Thanks for choking on and providing this very valuable input!
As @inertia mentioned they are working on the decentralization, and with that comparison in mind it seems very doable to end up with a completely legitimate product in the near future.
Hm... Am I too old, too conservative or simply cautious?
In the "broken banking systems" there are laws, regulations, guarantees, plans if something goes wrong - and it's bad
In the crypto world, like this case for example, it's just a matter of trust. We will provide the services, we sware to god.
If this is true what you say, I'm... Speachless...
In true crypto projects (Bitcoin, altcoins including steem and somewhere in the future SMT) trust is not necessary. Everything is written in code, so there's no need for laws besides what the code dictates.
From that point of view, steem engine is not a crypto project, they just use a blockchain as their database (or to be more precise: as a publicly visible backup for their own, traditional, database).
I think the word you are looking for is...intelligent (that's totally lost on ideologues).
Amen
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Exactly, I think Steem engine isn't the SMT and will never be, it obvious people don't know the SMT functionalities hence feel it can replaced by the Steem engine
I’m pretty new in the cryptosphere but difference between centralized and decentralized concept is very clear to me!
Thanks for exposing this evidence, @pharesim! 🙏🏼👏
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I completely lost track on Development. I just see that @dtube and @threespeak use their own Token. I will use those as long as steem Inc wont offer me a better Video Platform based in smt.
Let see what Future brings.
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Yep good insights. Anytime you add an effort toward decentralization it's harder and harder... steem-engine will keep developing cool new features at break-neck speeds and SMT development will always be a bit slow however in the long run what we really really should be hoping for SMT.
But splinterlands tokens like DEC,Beta,Alpha have been perfect examples for steem-engine. Peakmonsters has a token just to basically issue a ticket to tournaments and steem-engine has a perfect product for that.
So in the end i'm super happy both will some day exist together.
Yep...this is pretty much it.
Thanks.
Too many allow their hate for Steemit Inc to cloud their views. While it is obvious they had their troubles in the past, they are operating in a manner that is different from before. That said, they are a private company and will operate in their best interest. There is nothing wrong with that, it is something people need to be aware of.
Steem-Engine is a wonderful addition. However, that does not mean what Steemit Inc is working on is not needed....it is. Layer two solutions have their uses yet they do not compare to having something coded into the blockchain. This is a double edged sword because too much conflicting at the base layer can screw everything up.
SMTs are still the game changer promised. Steem-Engine is another option for tokens to trade and people to start different communities. These are in addition to what Steemit Inc brings out.
Part of assessing what is taking place is looking at Steemit Inc with neutral eyes. They have their drawbacks but there are also positives.
I am excited for the day when they announce the coding for SMTs is done...it will be a game changer.
I was waiting for a post on this from you. Enlightening...
Valid points and certainly agree with you here. I think the reason people commented under the steemitblog was out of frustration and lack of progress from the Steem team. Its been a painful and mentally draining experience for Steemians, the Steem token itself has taken a beaten and naturally Steem engine provided that hope. With the announcement that SMT is back on stream quite a few people I spoke with see it as a marketing tool and nothing material would come from it, that's why folks said well we have Steem engine, no need to wait on SMT. I certainly understand your points but got to take a feel for the folks on the platform that has seen disappointment after disappointment. There is also some conflict of interest on the Steem engine folks, they are basically pushing worthless token of hope that realistically would never trade anywhere and taking Steem in exchange, its a messy situation.
We need to really get people to see the value of decentralization and appreciate the value proposition that SMT brings. More importantly Steemdev need to produce something for people to take them seriously and should not feel like the community is demanding to much. Honestly I am not even convince they can make SMT happen at this point.
So true.
I like the steem engine service, but I'm worried they will be tempted to manipulate it.
The whole thing is nore of an indicator about how much SMTs are needed and what they will fmdo for Steem. Right now no other choice remains, but I wonder if it holds back other apps that have been waiting for SMTs before tokenizing on Steem. I can imagine we will see a lot.
I've sold most of my Steem Engine tokens accordingly.
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Steem Engine is a great way to solve a pressing issue fast BUT SMT is the long term solution we need to compete with more mainstream crypto token systems
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i have the same opinion. But i think there are in general not bad. SMTs on Steem Blockchain are clearly better. There add a lot of Trust.
Thats why the new DTC/Dtube Tokens
run on a seperate blockchain, right?
Thanks for clearing that up. Resteemed.
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Interesting! Thank you for the helpful articles. Resteemed.
You got a 43.53% upvote from @ocdb courtesy of @pharesim! :)
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First time I’ve heard this side of it. Steem engines still pretty cool though
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I think the difference will be with SMT tokens they will not be able to block anyone, like how I got blocked from Palnet yesterday! SMT will be directly run off STEEM, while STEEM-Engine are just centralized tokens. So STEEM smt will be like mini.STEEMS! Same exact properties as big STEEM. The scott scam tokens are like the top layer of an onion only, ready to be "peeled" away! lol
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