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RE: What are the Economic incentives to buy and hold large amounts of Steem Power?

in #exyle4 years ago

Thank you for the thought provoking post. Let me challenge it a bit though...

Your opinion seems to be that demand will come from projects needing RCs for outside users. I would say that most projects that choose to build on Steem would be doing it in hopes to tap into its current community. I'll explain, if a project wanted to utilize Steem's technology it has two options, 1. buy a lot of STEEM, 2. clone Steem, pre-mine a lot of tokens and use the free RCs to create many account tickets and delegate to a lot of people.

Right now STEEM is pretty cheap, so a lazy team might just buy some up. But it is really not all that expensive for a team to clone Steem and adapt it a little to their own needs. So I am not sure that businesses will choose to make buy a lot of STEEM and make an SMT over cloning, unless it is to obtain access to the users already on Steem.

This is why I believe Steem needs to reach out to many user-types rather than focus on the businesses. If you look at Ethereum you see that large businesses usually choose to use its code and not make a dapp. I think this is because they are not attracted to getting the users on the public version because its too small to them and they're fine with their closed off, private version. Yet, Ethereum is the place to be when thinking about making a DeFi dapp that wants to be interoperable with other DeFi applications.

People say "blockchain is the innovation not [insert blockchain name]" and I believe that has some truth to it under certain conditions and is wrong in others. Blockchains are just like social networks, there are a lot of social networks online, anyone can make one, so what makes Facebook, Twitter and Youtube so important? It's all the users. In the same way, I believe its not businesses before users but users before businesses. imo :)

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Cloning Steem is possible. It has been done before but not very successfully so far I believe. It's also pretty expensive to buy all the infrastructure yourself.

I fail to see why anyone would go that route though when you will be able to make an SMT for 10 sbd on Steem and utilize it in your application or community.

You do need access to RC's but you can lease them if you can't afford the STEEM straight up and increase the leases with the growth of the organization.

It's a much cheaper, easier and faster option.

And besides that, if you clone Steem you will have to somehow get your token on an exchange for it to become tradable. With an SMT your token will be tradable straight away and you will have access to instant liquidity.

I'm referring to large projects. Smaller projects and communities would of course find SMTs useful and prefer them over cloning. But look at Weku, Golos, Narrative,Whaleshares and there's another one that is picture centric, can't remember the name, but they forked Steem. Its really not that challenging for a business to launch one.

The point I am making is that price of STEEM is going to be directly related to whether people clone or make an SMT, unless Steem's community is so valuable to the business that they go with Steem. Currently, Steem's not big enough of a community for that, but it should be the goal.

Let's say STEEM got back to $1, in that case a video game company wanting to cover RCs for a million people would need at least 15,000,000 SP or rent the RCs. Who wouldn't clone?