Despite bitcoin being popular as form of payment in stores around the world, the reality is that the transaction cost, speed and ease of use prevents it from being used as a transaction medium. By this very simple definition, it cannot be considered money if people can't use it in way that their brain is naturally accustom to. I want to give you why STEEM is an unstoppable force that will revolutionize money.
STEEM as a form of money
Money, for as long as it has existed within our minds, and as a socially acceptable construct, must have several properties.
- It must have no fees to pass from one person to another
- It cannot be counterfeited
- It must be widely accepted and recognized.
If we think about each time we spend cash, we can freely give it from one person to another with zero fees, instantly and we almost never worry about counterfeit money. This is what made paypal so popular in the early 2000s, and what makes Venmo increasingly popular today. In conjunction with that, we are also supremely aware of each time we have to pay a fee to move money and how frustrating it is to pay the fee. Examples include paying for a money order, paying a 3% surcharge to counter usage fees for your debit or credit cards and so on.
Yet we have to accept this, because there is no other way around it - until the blockchain was created. Now I won't got into all of that because that information is out there already. Instead, I want to suggest that STEEM is the future base currency of the internet and the troubles that we will face as we become that currency.
Parallels and examples from real life, and why STEEM will be the defacto base currency of the internet.
Throughout history, technologies have emerged that revolutionize humanity for the better. Certain key technologies have caused what is equated to in the stock market, as a gap in price, upwards. David Morris, a Technology Journalist from The University of Iowa spoke at a TEDx event 3 years ago in 2015 and compared blockchain in the following way, which I think is a brilliant way to look at it.
BLOCKCHAIN WILL DO FOR MONEY, WHAT....
The car did for transportation
The telephone did for communication
How accurate are these statements?
Lets look at each one and see if we can draw an accurate parallel. First we need to establish how money works in today's age.
Money and how it travels from one place to another
Money needs to circulate, otherwise it would not be money and it would be as useful as the extra shot glasses collected throughout your vacations.
In order for money to move from one place to another, historically, someone would need to take it and move it for you, which may take days, weeks, months, depending on where it was being sent.
Today, money moves significantly faster, but most of us won't realize that it still takes a few days to clear. Checks still take up to 5 days to clear, bank wires still take 24 hours, etc,. and everything else is setup on a system of credit rather than money. It is important to emphasize that we are talking about moving money, not moving credit!
In order for money to move from one part of the world to another, the money itself must pass through several services and verification methods to authenticate it as it travels. This is where the concept of a trusted 3rd party comes into play. Most often, the trusted party is either a private bank or a clearing house. Both act as middle men who help facilitate the movement of money from one individual to another. This service is not free and it often means that a service fee is often associated with them. Despite paying for the service, the fastest transaction will take at least 1 business day to clear in a well developed modern society. Examples of this would be wire transfers, direct deposits or services such as western union.
The only other way to move faster, would be to utilize a centralized credit system rather than money, such as Visa or Mastercard etc.
Now that we understand money, lets look at other examples in real life to compare to:
The car and transportation
Before the invention of the car, land travel was limited by trains and horses. Trains required large banks to fund and operate, which is restrictive. Horses on the other hand, although ancient, allowed us the freedom to move where we wanted to, but maintaining a horse was a rather uncommon thing and time consuming task for most of the population.
When oil was discovered, and the combustion engine developed, the car became the king of personal transportation and people knew this. A whole industry was created around the car and there was a massive expansion of the oil industry as well as massive sponsorship of public roadways. The car literally revolutionized transportation with an intense amount of speed and flexibility when compared to the horse. The car became the new standard and in comparison, the only thing that could make the car obsolete is teleportation and helicopters, one does not exist, and the other is literally too dangerous and expensive to be in common use right now.
The car revolutionized transportation.
Telephone and Communication
Before the telephone, or rather, any form of electronic communication, messages were sent physically by messengers which took days to deliver. When the telephone was invented, the technology grew rapidly, and the infrastructure needed to support it grew rapidly. Much like cars, the technology was so good, that it was adapted rapidly. Messages could be sent instantly over long distances. Overtime the original telephone technology was overcome by wireless telephones and the only way for the wireless telephone to become obsolete is telepathy, which, for all intents and purposes, is not feasible for our pewny human brains.
The telephone revolutionized communication.
Lastly, blockchain and money
Money, as we established, takes days to move from one location to another. At the end of the day, we can be charged some rather high fees to move money around. Wire transfers cost up to $50 for a full transaction, western union is based on a percentage of what you send, and all other methods that are "free", costs several days of waiting.
But just like the telephone and the car, blockchain will change all of that and turn the movement of money into an instantaneous thing and STEEM will become a key component to that.
Why STEEM is in position to transform the way money behaves
Steem has already established itself as the number one blockchain that has scalable bandwidth through its dPoW. This modularity allows it to be controlled by the people through elected witnesses rather than the mess of what is associated with pure decentralization, which is often a red herring in disguised.
Steem transaction times are extrenely fast and for all intents and purposes, it is near instantaneous with consistent 3 second confirmations times. Steem also provides built in security and trustworthiness through its reputation counter and the ability to power up your steem, which doubles as a form of safeguard from theft. It also allows anonymity if you elect to do so.
Steem has reached many parts of the world and provided instant access to steem coins (once the account is created) .
Steem bypassess the need for clearing houses and puts the control of money back into the hands of the user since a trusted 3rd party is no longer needed.
The infrastructure of steem has been laid out already and the technology has been developed. The only thing we are missing is the marketing needed to inform the public and to further the spread of this technology on a large scale. This is where the efforts of the steemit.com team and any other developer in the past year has worked tremendously hard to achieve.
While the people on steemit.com often find fault in the blockchain through abuse by individuals, the grander picture is that it simply does not matter because the scale of the blockchain is still rather small. All of the existing abuses is scattered background noise from the lack of clarity that small usership brings.
Once other platforms fall, the migration of users on to Steembased services will be explosive and the rewards pool will be significantly harder to manipulate.
Possible future struggles
When someone logs onto any of the steem derived networks today, they might see a great future potential once they understand it, but they will likely see a comical current usage fraught with abuses from individuals that appear to be circle jerking each other for upvotes. It is important that we evolve out of this behavior, and the only way to do this, is to increase the number of users on the network before mass marketing occurs.
This is principal reason why I think the steemit.com developers have not yet marketed themselves. They are working tirelessly to perfect the communities feature and SMT's which is the main product of the steem blockchain.
The next difficulty that is commonly suggested is the "rewards pool rape". Without going into the technical aspects of it, the rewards pool is created out of inflation, which will reduce from 9.5% to 0.95% in approximately 20 years. In all, approximately 48,000 new steem is added to the rewards pool each day, which means that as usership grows, the amount of people fighting for that rewards pool grows and grows each day, and each person controls less of the rewards pool.
The reality is that the only way to have access to the rewards pool is to interact with the blockchain community. If you choose not to, then you are simply riding the wave of the growth of the platform. Everyone else is fighting to earn coins instead of purchasing them. The ability to earn the coins though, is a key component of the blockchain since it allows access to the funds without buying into, something that allows global growth. People do not understand the gravity of this right now since their vision is short sighted to themselves and how they can earn their own coins.
In conclusion, STEEM is in a good position to be the de facto base currency of the internet, and it is important to not lose sight of this. While the steemit.com developers appear to be looking away from the website and letting it destroy itself, the reality is that they are focused on SMTs and communities. If they do not launch this product, everything on this blockchain will essentially becomes a novelty item and just an experiment.
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Great article. The analogies are spot on, but let me play devil's advocate a little bit:
Doesn't bitcoin's LN network supposedly solve those issues?
Secondly, isn't bitcoin's consensus algo & network more battle-tested and more secure than Steemit's dPOS, which means bitcoin would be more trusted, and thereby capture a large share of global value transfer?
I enjoy devils advocate, but the only thing you said that is true is that btc is battle tested. Whether or not it is as secure as dpos, is a squash. Both have a balanced ledger and as far as trust goes, anyone who uses steem or btc understands both are truth worthy. People just know one more than the other.
As for the lightning network, it's suppose to reduce traffic and reduce fees, but it's still not fee less and it will never overcome the speed of steem for finalizing transactions. It's intent is to have off blockchain transactions using side chains, so you still have 10minute confirmations times once you are back in the chain.
Steem is a flawed concept in that the reward pool is a wide open target. For Steem to become this "true currency", adopted by millions, they need to tighten up a multitude of areas of the reward process.
what if there were 1 million users with an upvote each worth 1 cent? that voted on a post. what would happen to that rewards pool?
If we just scaled linearly and there were 1 million active users, considering some estimates are around 30-50k users right now... let's be generous and guess the top end, that's only 20x the users to 1 mil, I am lol'ing at the idea of how much ram those servers would need to run the network.
No wonder Dan left at first place. LOL. Need to look at EOS.
EOS is a hard pass for me simply because of what will happen when people in the wider population find out who is involved in the project.
I certainly agree that STEEM is revolutionary and has the ability to change the internet with specific regards to social media. The upside is really high, but there is a lot of work to do to stay ahead of the game and keep things from falling a part at the same time. I wish the STEEM developers crew the best of luck and I’m pulling for them to knock it out of the park! Thanks for the post!
social media has engaged much more than just the original intent of facebook, geocities and such. So i would say, with specific regard to social media based services, its going to go a long way. Look at how instagram as created a whole new approach to marketing!
Your ideas are pretty solid but it is going to take a lot more acceptance of crypto in the world for it to work!
How much of crypto is actually getting used, and how much is being traded speculatively or hoarded?
This is the main issue right now... people is translating the same old rules from the failed financial system to this new world of crypto... trying to speculate in the same Wall Street way... Not many people is using crypto to actually transact in the real world. I'm actually working on a project to promote real use of crypto by communities, because I believe is what is needed in order for crypto to go mainstream.
the key to what you are saying here is "real use of crypto by communities". The thing is that people outside of the crypto world will NEVER think to, or want to use tokens because they have zero need to. my parents still dont know how to use a credit card!
True, but when the world does realizes its true value most fiat currencies will become a thing of the past, I think we are getting there!
this is 100% not true. Crypto is still fiat!
I still think that STEEM won't be base currency of the Internet. There are more popular crypto like ETH, which will take the market. STEEM is good alternative, but it won't be that popular.
Excellent information. very disaggregated and analyzed stealthily. Greetings from Venezuela
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This is a very good post you made here and I agree with you in several ways.. but then again I once thought of linking my e-commerce business and use Steem Dollars as a form of payment, but then the volatility seriously confused me when I was thinking about pricing of my goods. Despite having all these awesome features such as 3 seconds payment and zero fees transaction.. The volatility is still a confusing factor..
The first issue was how much should I charge my customers.. And someone suggested me that I should charge it according to USD value of the present price of Steem Dollars at the time of selling, but then again its confusing.. how do I decide about payments with my suppliers and courier service agents..
Moreover, there is still a huge fees involved, what I mean is that if I want to pay others I have to pay them in fiat currencies.. And as for SBD, I can't directly convert them, I first need to convert them into BitCoin and then to Cash. There is that big fees involved.. So I would like to ask your opinion regarding this small problem that is currently not allowing me to conduct my e-commerce business and using Steem blockchain as a payment method.. For a small scale business like mine these converting and transaction fees can get very expensive, which eventually has to be covered by my customers and thus increase in price and losing customers to competitors that can offer lower price.. That's why at present my business is limited to local area market and fiat cash on delivery payment..
I agree. Price volatility makes any crypto at this point hard to use as an actual currency.
The volatility is a separate issue. Volatility is a function of either high demand, low product volume, or very large changes in the overall sentiment of things. The key reason why volatility will reduce in steem as it grows is that more accounts will have more and more coins locked up in steem power. This will cause stabilty. Also why its locked into a 13 week vesting schedule. Dont forget that before it was 13 weeks, it was 10 months!
As far as fees go, thats a unique thing to all cryptos. Unfortunately, commerce for someone who is interested in taking SBD is great, but if they are just interested in taking in SBD and then converting it over, they would have problems. This is always going to be true for any currency, as long as it is not your home currency. The solution to this is a larger SBD only based net work, where you are spend the sbd you earn only.
I agree, transaction fees and scalability are the two biggest hurdles in crypto right now. Steem tackles both issues very well!
Yeah, you're right bro :)
You are right, but first, we have to get beyond treating Steem as an investment. As long as it's treated like an investment, people will try to hoard it.
A second problem is that we get stuck in a rut. There are very creative people on Steemit, but some of the current whales are shutting down that creativity, because they disagree with the rewards that people are getting.
SMT's might get around that problem. But then you'd have a small supply of those and people would be tempted to sit on them.
How would you get around that?
This is a problem, but ultimately, not a very long standing one. Creative people were once on youtube, and there will always be more creative people to fill the gap. Even if you disenfranchise 10,000 of the best on steemit, there are millions to replace them in the future.
At the end of the day, those that stay with it will succeed if they aren't blinded by the hate of whales. Simultaneously, no one should be quitting their day job for something that is still working out the kinks. No one worth their own salt will quit their creative endeavours because of steem whales. If you did, you lost the fight before you even began.
I will say though, that disagreement on rewards is a healthy thing, but it might be abused in negative ways that need to be dealt with. The issue is that the same mechanism that people want to put into place to combat it, is often counterintuitive because it attacks the same mechanism that allows great posters to earn on posts. This core concept is freedom of speech, and the speech component is exercise through upvoting.
Yes, but on YT there is only 1 whale of consequence: the Google.
Here there are many.
But thinking about it, there are many whales smashing YT, but they're Big Corporate and not really part of the ecosystem, other than massive investors.
I tend to be in line with Joseph above.
May i jump in with a question?
This is new to me.. among lot's of other things i am reading here :-(
OK. There is a lot of info here to absorb. And I like STEEM, the idea of Steemit is great. The STEEM blockchain is the "best". But there are kinks that need to be worked out, which the developers are in the process of doing. (these are all my generalized interpretations of the goal of the post).
My issue with the ideology of STEEM when compared to the ideology of cryptocurrency as a whole is the aspect of decentralization. In my very basic understanding of decentralization by the various "proof" methods employed. And then my gripe with the STEEM system is that it is more of a decentralized republic or representative decentralized cryptocurrency.
And this is solely because the ideology of crypto currency is a decentralized system that is able to be self secured.
Which is where i believe the "crypto" part of the compound word cryptocurrency was derived from. Crypto = hidden. which can be interpreted as something that is hidden is safe and in the realm of money/currency it is secured.
and due to the popular understanding or connotations associated with the idea of hidden or secret. _crypto_currency gets a bad rap. people think the idea is to hide money or use it for things that want to be hidden.
You would be right in some sense. It is not a republic because the laws are encoded, but they can be changed, making it a democratic republic. I don't get the words "representative decentralized" though.
You seem to suggest that this is better than the anarchy employed by other security systems such as PoW. Is that right?
i dont understand either enough to say which is better. but the speed and efficiency (from my understanding) of the STEEM blockchain would lead me to superficially believe that it is better.... does that complex response clarify my position on this?
decentralization*?
yeah i'm basically saying the same thing as "democratic republic" or "representative democracy"
Hm can't say I agree entirely given that most people outside of the cryptocurrency world only know Bitcoin, it would take a massive shift in adoption. With that being said I am a great believer in the platform and it has a real chance to be one of the go to sites for content consumption.
Anyway appreciate your argument, good to read different points of view.
While that is true, this is the first year that STEEM has existed, and it has not been marketed at all. Despite that, we have thousands of new users signing up each day, and many more migrating from other networks here. XRP has been around for 5 years, LTC for over 8 I believe. ETH as well. Where will STEEM be in the next 5 given that we have a unique value proposition that is uniquely different from all other blockchains?
It can be quite speculative what could happen to Steem blockchain as to what the community decides to do with it and second of all - the steem whales which are the biggest investors and holders of steem have also a huge influence towards it . Otherwise saying Steem has the potential of being the way to go for everyday transactions . Also there is a funny fact that more people come to use steem the more likely we are to bring in some high end programmers and developers also for these Smart Media Tokens. Enjoying the content would love to hear more from you .
utopian.io has already brought on many developers, so the acknowledgement by the developer community is there. Although I don't know much about thats going on there, I know the people involved are HEAVILY involved with it. Its a good sign for things to come. I have my own comments on SMTs, but im saving that for another day!
I appreciate every optimistic view on the blockchain i it is true: SMT will become the main product if they manage to pull it out soon...
From the techical analysis, EOS have improved in every advantage you mentioned + it is a platform for all kind of developers, so, im not sure about Steemit being the main currency in the web...
Still we are in the younger days, we will see what happens :D
D.
Great artical on the progression of money and technology in its many forms. Cant wait to see where Steemit will be in a few years! Resteemed and Following you!
We continue to explain this to the people of Indonesia. Many ways, for example through meetings and also through clothes and other promo tools.
Disclaimer: I am just a bot trying to be helpful.
Steemit has a lot of flags. First of all the wallet attached to your identity, it is insane. Second only the rich has influence... this is truly cynical.
You do not need your ID attached to your wallet. You choose to by signing up through steemit. If you open your account any other way, you can have a anonymous wallet.
The rich will always have influence. That is how a capitolistic society works. Thinking solely along those lines yields no real results for anyone.
What do you suggest be changed on a broad level?
Have you ever heard of Yours.org ? In that site you earn immediately and it is very democratic. It is not that you have to invest to have vote power... you just vote anyone you want, and people do the same based on the quality of your contributions. It is more meritocratic... I feel Steemit is too much hierarchical ... also you need to wait 7 days before payout, on Yours you get in an instanct. Today I earn over 30$ on Yours and 0.28 cents on Steemit.
Just checked it out, seems pretty dead. Funny enough their 5% cut might seem like a lot but that's better imo than what % of the equity here is held by the corp. They made the huge mistake of not eating the costs and charging 0% until the site got bigger, they have an easier to market domain name than steemit does. Probably doesn't help that the site uses BCH.
Wonder who is backing them, they seem to have two job listings up, maybe the low equity offered is just a bluff to make it seem like they're not desperate.
don't know what you saw, but Yours is growing a lot day by day. Users are getting more and more and the site is getting more complex. Finally the most important thing is you earn right now on Yours, now after 7 days, also your content don't get paid only for 7 days but forever.
Yes, I did notice that most of the top-paid posts have been around for months and you can still vote on them.
if you lock things behind a payway, i think you are no longer focusing on social media, but rather a knowledge based website instead or a hardcore fan base that is willing to pay subscription services for specific content. Do they compete? I think they do on some level. I think steemit is more social media, and yours.org seems more viewer-performer.
As someone who has been using Bitcoin since 2011, I completely agree with you. Steem is so much better for day-to-day use compared to Bitcoin or any other form of cryptocurrency.
When you check which blockchain has most activity on it, you'll see that Steem is on top of the list. It also does not have any scaling issues compared to Bitcoin or ETH. It's only a matter of time before the large public starts using it imo.
Source: https://blocktivity.info/
100% agree. If you use crypto as money steem is awesome at that! We just need a wallet application!
Exactly that's why I've been saying the crypto that is supposed to be "Better than Bitcoin" and that's STEEM.. Not Ethereum or Litecoin or any others..
https://steemit.com/steempay/@stealthtrader/why-not-steempay
ha! This would be awesome, but we have a long way to go before we can have something like this. We need a steem wallet that lives on your phone!
Each person or the average person? Certainly, on average, people will have less access to the rewards pool. But those who are accruing Steem Power now will be in a much better position to control the distribution of rewards in the future.
I meant each person. Nothing stops a user from buying the liquid steem that exist on the exchange. But in the game of numbers, each person might as well be considered the common person, or average as you put it since very few will have that ability to do so. I purchased my steem power, so I guess i would fall outside the average person.
That's a darn good summary of the use case for STEEM and SBDs as currency. There already is an embryonic Steemconomy and donation drives, and the Steemit blockchain supports it all while using only 1% of capacity.
That's precisely why DeCentral has deprecated crypto-commerce to low priority. (They make the Jaxx wallet.)
the key is the less than 1% of the capacity of the current bandwidth is used! The ability to scale is there and it just needs more time to grow into something far bigger than we can grasp at this point.
If I may cite the Steem bluepaper:
Yeah! Good points. That's why it's bet to start with steem now because this crypto has a lot of potential and will surely be on top in the future.
Do you think that with time, governments (and banks, universities, ...) will lose influence as more and more necessities become decentralized?
Nano is the best one .
Great article, love Steem and am considering buying some to hold onto and I have no plans on withdrawals anytime this year. I don't know if it will beat some other monetarized cryptos as not everyone wants to buy it or create content but it won't go away as a cryptocurrency anytime soon. Keep steaming, bye for meow 😻
from your mouth to gods ears.
Steem is the future of cryptocurrency for sure. The idea of this project is awesome.
steady, steemit will soon dominate the world of blockchain
@motoengineer
Yea, true. This post is well detailed, quite informative and useful. It came at the right time. Thanks for SHARING @motoengineer
Thanks by information
Lot of information in this post I like this post
Your shared info is correct. I agree with the news. Steem is going to be the future of the cryptocurrency. Thanks for sharing such an article
steemit information is very good .thanks for your information.
Important contribution, in this technological world there is much ignorance, it is only a matter of time to have a true reliability to the virtual currencies and thus be able to handle the diversity of them.
I couldnt agree more. Its always good to visit hot pages because we surely get something useful like this.
We will be the first few users of steem :) that is such a good history. A good feeling.
I can not say that I fully agree .
Great Insight on why you don't agree! I agree with your disagreement on agreement. Let's agree to thst!
consummation of a good writer,sir @motoengineer
like your post..
STEEM is in a good position to be the de facto base currency of the internet, and it is important to not lose sight of this. the community seems as a family ...Steem has reached many parts of the world and provided instant access to steem coins...
i think there need to change in the designing system of website on steemit..
I believee in steem. We share dreamz alike
Thank you!
give me your upvoite please :)
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Great post, and my opinion good prediction for the future of Steemit. It is only a matter of time before most people realize fiat money is obsolete and that cryptocurrencies are the future of immediate currency exchange
"before mass marketing gets here"
It's already here. Plus cops. Lots of cops. They are spending a lot of effort matching faces to bitcoin addresses to get rid of that whole 'anonymity' and 'privacy' thing.
Steemit is like a pay to play swimming pool at the police station right now, I am looking for something a lot more like 4chan where bumps give you coin. Another steem competitor is just starting up out of tel aviv, like hell if i'm going to jump on board israeli crap.
We are seeing a plethora of already compromised solutions for free speech and new currency, it may be a lot longer before we have the real deal.
Looks like the shirt design is pretty cool. Good job.
Excellent post @motoengineer!
This makes me wish there was a whale-o-scope that users could refer posts to, as an opportunity for great posts to get a great upvote. It seems you've already attained this payout; but, I'm wondering if bots are involved.
The referrals would be limited to one user (rank 52 or less) per week in an effort to gain new users much-needed attention. So, 52 Steemians a year would receive a generous payout.
I like your thought processes about how Steem could add competition to currency transactions.
Best regards.
Peace.
Great post. I hope you are correct! I am a huge fan of crypto, and look forward to seeing it change the future of fintech in the world. I also look forward to your future posts!
You have made compelling reasons for Steem to be a global transactional cryptocurrency. We are still some way off until we reach a tipping point. Hopefully the platform stays alive till then. The abuse that we see today is demoralising.
I considered myself Steem as the “Bitcoin for the Poor“
Whether intentionally or not, this is one of the most likely outcomes of the coin's main purpose in the future due to simple economics.