Kick the moon past the sun

It is a week and a half to Christmas and for the first time in ages, I feel I need the time off. Currently we are all ill at home, my daughter brought a stomach bug from daycare that has not been fun, last night my wife went out when it struck and she reacted by fainting in a restaurant and while I have had a flu, I imagine it is only a matter of time until I get hit too.

Health is wealth as they say.

Personally, I am pretty tired of the constant cycle of illness we seem to be in on top of the continual challenges of the diet for @smallsteps, which has regressed over the last couple of months and we now have to return into testing again what was already cleared. Booooo.

But, it isn't all doom and gloom.

I saw a message that @palnet are going to be burning some of their sell wall, 10 million tokens in all. I think that the burning of tokens has become all the rage in the last few months and I imagine that this will continue with SMTs on the horizon also.

I was commenting with @mattclarke a week or so ago about SMTs and while there are likely going to be many created, only a handful of them are going to likely be able to be economically viable. The others will of course be used for various gamification functions also. I don't know what the best course of action is, but I would consider that while the crypto industry doesn't have a very large population, it might be better to join forces and have larger communities that can be segmented later.

The example we spoke of was having a "country" token rather than a city token to begin with, as this would allow for a larger group to be included. What would be interesting perhaps is if in order to buy the city tokens, one would have to burn some percentage of the country tokens, not just buy them.

I wonder if in order to purchase Steem-Engine tokens, some percentage of STEEM had to be burned if people would have purchased still. I wonder if the Tribes would have had enough faith in their community that the value of the token would hold up even if there was no Steem for sale.

I only dabble in tokenomics as a thought exercise, but as I see it there is plenty of inflationary problems in crypto as essentially anyone can create a token and even if relatively unsuccessful, it dilutes the available buyer reach as the participating industry is so small. For example, there aren't suddenly hundreds of thousands more users on Steem bringing in new money to invest into the Tribe tokens, it is people who are selling Steem for tokens, or tokens for Steem. This spreads the available resources more thinly.

However, I do think that this is going to change significantly once the institutional investors come into the industry more heavily as they are far less likely to invest in the same way as end users are. They don't care what the investment vehicle is, as long as the fundamentals are solid and there is the potential to attract end users willing to consume and spend. When it comes to available resources, pretty much 100% of institutional investment will go into what they believe is going to increase in value.

For me, the fundamentals behind all the tokens on the Steem are solid because the infrastructure is robust, flexible and has the scalability to expand a great deal further than it currently does. Not only this, it is fast and what is hyper important - transactions are free on the network. Yes, there is an RC cost, but for STEEM transfers, very little Steem Power is needed.

This is good news for the tokens that will be built upon Steem also, as having investor interest in the infrastructure allows for the strengthening and stabilisation of the blockchain and once it starts, the platform becomes relatively "safe" as a development infrastructure. Well, it already is as the Steem blockchain isn't going to disappear, it is just that there is a great deal of public layer bullshit that has to be contended with which makes it look far more unattractive than it actually is.

With that investor injection however, the "inflation problem" of the excess amount of tokens in the industry becomes far less of an issue, because they are going to only invest into a subset of what is on the current market. There are in excess of 2300 tokens upon blockchains currently, but very few of the projects are the kind of thing that is going to attract investment or user base. This means that the useless will be cut away and there will be consolidation in token investment to far fewer vehicles.

This means that if a billion dollars of investment comes into crypto, it is not going to be spread evenly across all coins and will land on a narrow set. I of course believe Steem will make the cut because it has foundation, community and offers a very easy way for further tokenization and user base development. How much out of that billion will land on Steem? even if it is as little as 1% that would be a massie bump, but remember that it isn't going to be a billion coming into the industry, it is going to be trillions.

If a hundred million arrives on Steem, due to only a portion of the supply being liquid it will push the price up hard, which obviusly also affects the value of voting mechanisms on the platform which will mean that there is a game to be played between selling and keeping Steem power for voting. Do I sell my stake if I am able to earn a great deal weekly without selling it? Does an end user get onto Ethereum to earn or do they come into Steem and try their hand at doing what they may have already been doing on other social medias already?

In my opinion, the barrier to entry into crypto is very low on Steem in comparison and this will simplify further This means that Steem can actually be the place for the normal end user and if enough realize it, the population of Steem could explode nearly overnight. At that point, splitting the country token into a city token becomes viable due to market segmentation and user base and a whole range of tokens can be created like businesses entering into a new city with a growing citizenship.

The most important immediate factor about the price of Steem isn't for ROI, it is about being able to use it to attract end users to give Steem a go and build their home in the city. Eventually, those who are on Steem now will start to realize what will take this place to the moon, but for now, it is time to make sure the fundamentals are in place so that the investors to arrive will take a punt on Steem.

Taraz
[ a Steem original ]