This is the final part of my argument against @sbdpotato initiative. if you want to read the other articles about economy laws and about how SBD peg works
Now it's time to talk about the most important part of all this debate revolving around @sbdpotato (and also @burnpost): Is it creating value for Steem?
Both initiatives are being sold as something that will improve the price of the SBD and STEEM, and that this will be good for the platform because it will attract more people to the platform. So, let's talk about is.
But first, we need to understand a very important concept:
Price vs Value (Aren't they the same thing?)
No. Price and Value are two different but interconnected concepts, especially when we talk about financial assets.
Here is wikipedia definition of each one:
A price is the quantity of payment or compensation given by one party to another in return for one unit of goods or services.
Economic value is a measure of the benefit provided by a good or service to an economic agent.
This means that the price is what how much money someone is willing to pay to receive something of value.
If the price of "something" is lower than the value, then the "something" is cheap. If the price is higher, then the "something" is overpriced.
Valuation (How market analyst define if a Stock price is cheap or expensive)
When you see the stock price of a company like Apple (APPL) do you think it's already too expensive and not worth buying?
Looks expensive right? Most people would think that it wouldn't be worth buying Apple Stocks because it was already "too expensive".
Here is the catch: That price is from September 2018. Here is what happened to Apple stock prices until today:
So, whoever bought Apple stock at that price, would have something like 50% of profit today.
Market analysts have a way to find out if the Stock price of a company is cheap or expensive, no matter how much the price have already risen.
The process they use is called Valuation that is about analysing everything that gives value to a company.
This includes Physical assets, financial assets, how many clients the company have, how is the economic sector the company is active, what is the sales expectation, what projects the company have, how much debt and if the company is able to pay it, and a lot of other financial/economical stuff.
Then they divide the company value by the amount of Stock Shares in existence, and the find what the price of a Share should be.
Don't be confused again with what is price and what is value.
But Steem isn't a company, we can't make a valuation analysis.
Yes, you are right. The blockchain isn't a company with stocks on the market (although there is Steem Inc., but that is another story).
But there is another concept that is intrinsic to what Steem is about: the Network Effect.
Definition by wikipedia:
A network effect (also called network externality or demand-side economies of scale) is the effect described in economics and business that an additional user of goods or services has on the value of that product to others. When a network effect is present, the value of a product or service increases according to the number of others using it.
The Steem blockchain (and it's front-ends) is essentially a social media/blogging/content platform, and a big part of it's value comes from how many people is using it, so the network effect have a big impact on how we can understand the value of Steem as a whole.
Let me quote wikipedia again:
The network effect can create a bandwagon effect as the network becomes more valuable and more people join, resulting in a positive feedback loop.
You convice a friend to join Steem, who convince another friend, and so on, and eventually some of them will buy STEEM/SBD because they think the will receive good value in exchange for the price they paid (therefore, creating real demand).
People will join (and buy STEEM/SBD) if they receive value in return
Ask yourselves what kind of value you expect to receive you are part of social media/blogging/content platform?
- Facebook have social interaction (kind of)
- Instagram have social interaction and photography related content
- Reddit have content split in subreddit for whatever taste there is
- Quora have questions and answers content
- Youtube have video content
- Twitter have content for people with Short Attention Span
And what about Steem? What do we have? You might be amazed witht the answer:
We have all of the above!
Yes, we do. But the question is: Where are they?
If you are an old Steem User, you might not even care about the Trending/Hot page, but you should.
You should care about it not as something that you will look for content, because with time, everyone start to be part of smaller communities inside Steem.
But the Trending and Hot pages are what outsiders see that is highlighted on Steem.
The outsider view
The big question here is:
What will an outsider see when they reach Steem? Is it interesting? Will he want to come back another time?
Honestly, i don't think so, if all they see is potatoes and bonfires, along with thousands of articles saying how awesome Steem is, or how the STEEM price will "moon soon!".
I don't think this kind of content attracts a lot of people...
People want to see cat pictures, the funny viral video of the moment, well written articles about an interesting topic they like.
And to add salt to that wound, Steem had a bad reputation since the beginning. Maybe it's time to change that.
What really brings value to Steem
Now Steem is amazing. Better yet, Steem have an amazing potential.
If you look around there is a ton of projects being built on the blockchain that can appeal to many different people:
Steemit itself ad it's communities - A content/social plaform
@steemhunt - Product discovery platform
@splinterlands - a card game that uses the blockchain for the actions
@dlike - a place to share that cool site/news you found
@steempeak - a really good front-end
@esteem - a great mobile front-end
Musing.io - a platform similar to Quora
@dtube and @threespeak - platform for video content
@drugwars, @steemnova, @epicdice, @holybread and a lot others - Games (real games) built on Steem
@engrave - Filter you content to create you own blog separated from the content "noise"
And a lot (really, a lot) more.
Now this is the kind of stuff that make people want to join (and create demand).
It's time that we start to care about VALUE and not PRICE
If there is value being created, the price will follow it!
Now forget about STEEM price, how big is your stake, how much curation reward you are receiving by upvoting and supporting @sbdpotato and @burnpost and as yourself:
Are these projects creating value for Steem?
If your honest answer is no, then please, stop supporting them and direct your stake (in whatever way you want) to any of the really interesting projects being built on this blockchain of ours.
Conclusion (the final one)
I have no doubts that @cryptodrive and @smooth are really smart and savvy, and that they have good intentions running @sbdpotato and @burnpost.
But it is my honest opinion that their focus is totally wrong. They are gathering support and attention from a lot of people (big and small stake holders), directing energy, time and money to something that i think it won't have any effect on the price of STEEM and SBD, and worst of all, aren't creating real value that will make Steem interesting to potential new users.
I still believe that Steem is an amazing platform, and have a huge potential to grow, but if there isn't a change on the culture, specially from the #witness, all this potential will go down the toilet, and Steem will become a ghost town where it's inhabitants are more worried about fighting for coins they find on the ground, than attracting more people to improve the city economy.
The worst sin of the Steem blockchain and most part of the community have commited is resumed in this image:
Since the beggining, it was always about how much money you can make on Steem, and not about how much value you can receive. And this is why Steem was seen (and still is in come places) as a Scam than something truly valuable.
In the end, what i am asking everyone that is still supporting @sbdpotato and @burnpost to rethink about it, and consider directing this support to any of the other projects you like. Long term, it is the best way to use your stake.
Give support to something that add value, not about something that care about price.
Or, you can follow @whatsup advice and join the #milkandtators campaing, and contribute with real engagement around here.
That's all i have to talk about on this subject, and it will probably take a long time before i write about Steem related content.
But if you like what i wrote, but the post passed the 7-day payout, please consider watching this ad for 5 seconds.
