We Call Them Crypotocurrencies... But are they Actually "Currencies?"
Like many of you no doubt have, I have tried to get a number of friends and acquaintances to come over and get started with Steemit.
Red rocks, Sedona, Arizona
Although I happen to think this place is awesome, it has been an interesting uphill battle to get anyone to budge from their comfort zones on Farcebook. Most people seem terribly skeptical of anything new.
One of the primary stumbling blocks-- once folks have gotten past the initial idea of social media that rewards people-- is the notion that aforesaid rewards are paid in Steem... our own "local" cryptocurrency. If the idea of a social site that actually rewards contributors is "strange" to people, the idea of such rewards not just being an automatic deposit to your bank account or PayPal account is outright ALIEN.
Crypto Currency? What's THAT? Monopoly money?
Thistle in bloom
People are skeptical, on several levels. Interestingly enough, the most skeptical also tend to be the best educated and most familiar with investments.
Ironically, surprisingly many people have actually heard of Bitcoin.
To complicate matters, I've recently even had a few people tell me "that investment banker guy says it's a fraud!" referring to J.P. Morgan's Jamie "The Douche" Dimon recently making negative comments about Bitcoin.
But the objections I've heard have made me pause and think, for a moment.
What IS a "Currrency?"
Northern sunset
Well, it's a pretty broad term... in its most specific sense, it implies "in current circulation," as in... something you use for barter or trade. If we use that definition, cryptocurrencies would sort of be out of the running, as it's pretty hard to go buy a bag of dog food, or a hammer with Steem.
In a more generous definition, a "currency" is simply a system of money, recognized as a "store of value," and in some degree "in general circulation." Under that definition we can paint with pretty broad strokes.
For example, when I was I kid we lived in Kenya for a while (late 1960's), and a number of local people used cowries (a type of seashell) as money.
The main requirement here seems to be that currency represents "a store of value" and that it is "current," meaning that it is in sufficient circulation that you can exchange or trade it for something.
But You Can't Buy a Cup of Coffee With it!
The primary objection I hear from "regular people in the street" when it comes to cryptocurrencies is that it's "difficult" to use... and you have to "exchange it for something else," as a result of which they determine that it's "not real money."
Butterfly in the sun
Sadly, when I point to the four new tires on my truck-- purchased with "not real money"-- it doesn't help as much as I would hope.
What helps a little more is when I ask if Jamaican dollars (for example) are "real money" and then follow up with a question of whether they will buy you a cup of coffee in Denver or Wichita, Kansas. And unless you're in a large tourist city in the US, it's unlikely you'll be able to change those Jamaican dollars into US dollars... so that also makes them "difficult," but there's no arguing that Jamaican dollars are "real money."
It's a lot of work to sell this gig! What's WRONG with people?
And so, the Case for a Steem Supported ECONOMY
Most critics of cryptocurrencies point to the exact issue that led to their creation, in the first place: These currencies are created out of thin air-- they are just numbers in a computer.
Center of a Gerber daisy
And they were created because printed money is also made out of thin air, created at will by governments.
Neither of which alters the fact that maybe utility is a good thing. Because if all we can do with cryptocurrencies is "invest" in them and trade them on exchanges... then are they really not more like "common stock" than a "currency?"
So this is where I put in my pitch that if we truly want Steemit (and the Steem token) to grow and thrive, maybe what we need is to build a greater economic system here-- a reason for the "currency" to exist... and be "current" as a medium of trade. If we actually have a thriving marketplace here, based on Steem (like our own personal eBay/Amazon clone) it would certainly go a long way towards silencing some of the critics who claim we don't even have a real currency.
And that would be a good thing!
So let's discuss! Are Bitcoins-- and cryptocurrencies, in general-- actually "currencies?" Or would it be more accurate to call them an "asset class," like common stock, or corporate bonds? Whereas there are a few things you can buy with Bitcoin, purchase options are pretty limited with most alt. coins. Does there need to be an "economic base" of commerce, in order for something to be a "currency?" Along those lines, would you like to see a broadbased peer-to-peer marketplace on Steemit? Not just a few people trading with each other, but something large scale like an eBay/Amazon type marketplace? If you could readily buy furniture, software, air travel and groceries with the Steem token, would it become more like a "currency?" Would that make it easier to get people to join Steemit? Leave a comment-- share your experiences and feedback-- be part of the conversation!
THIS POST... carries the tag #discussion and is part of @timcliff's initiative to develop more engaging and discussion worthy content on Steemit. To learn more about this initiative, you can read the original post here and become a participant!
(As usual, all text and images by the author, unless otherwise credited. This is original content, created expressly for Steemit)
Published 20170922 18:19 PDT
There is some things in the works and other projects but this is one place where you can use steem to buy stuff https://www.coinsen.com/index.php?coin=steem
There is another one too already out there but I can't find the link at this moment. But it would be nice to have it all in one place instead of all these different sites that are popping up trying to fill a need.
At the very least, it would be nice if the Steemit developers created a new primary interface that also had links/menus to the primary support apps like DTube and such. I know the whole gig is played on the idea of "decentralization" but you can also run the risk of ending up with "fragmentation" which is not all that useful.
One of the things which got me most excited about Steemit over year ago was this post by Dan Larimer. I think an economy that is truly free of borders and government oppression could bring about a level of freedom the world has never known. Smart contracts, escrows, no trusted third parties. We can control our own store of value.
I hope it happens. I hope we can provide goods and services to each other through STEEM and SBD. I see it as a path towards a voluntary future.
Great post.
I remember that post Luke-- it was one of many I read before even deciding I wanted to be part of this gig; and it was very hopeful because it told me that Steemit (and the guy with the big idea) seemed to sincerely want to create something far beyond just another coin.
I've brought up eBay as a model in the past and people tend to automatically wrinkle their noses because they see only eBay "of today" and think of Big Corporate. But the first five years I was on eBay (1997-2002-ish) it was this truly awesome global peer-to-peer marketplace; you could find almost ANYthing, and it completely changed to idea that buying stuff had to be either local or from a big company. Much like Steemit, you built a reputation in the community that meant something. There were NO business sellers. There were even "community action groups" that helped guide both the UI and the direction of the site. It's a model that could totally be applied to a Steemit marketplace.
For me, the "Achilles heel" of decentralization has always been the risk of going overboard into "fragmentation." I like to use the "Farmer's Market" analogy... small growers like to be independent (decentralized) but it's hard for them to make headway absent a Farmer's market (a centralized structure), because people just don't get in their cars and drive to 17 places to shop for dinner.
And I totally agree with your point-- we can have that free economy here. We can have that voluntary future. But I also submit that we have to be willing to "cherry pick" the best aspects of traditional ways to make it work for us.
Well said and as someone who just drove 30+ minutes to the farmer's market this morning to pick up some "pet food" milk (raw milk is illegal here), I love your analogy. The balance between problems with centralization and problems with fragmentation is a really good way of looking at things.
Seems to me that part of what we need to do is create more "everyday analogies." The crypto field remains heavily dominated by developers and techies. To onboard a more mainstream audience, we need to use more mainstream terminology.
Man...I love to read your "controversies" posts. A good weekend for you and big hug
Thanks @jsantana, I appreciate your support and kind words. A good weekend to you, as well!
Wow @denmarkguy. I have to say this is one of the more thoughtful posts I have yet to encounter here so far. I will undoubtedly join in @timcliff's initiative to carry on meaningful #discussion.
Some thoughts on your article:
Personally, I think that the last SOCIAL barrier to widespread acceptance of Bitcoin (+crypto market) is exactly what you touch on here: where can the user spend it?
With the proliferation of credit/debit cards linked to private crypto wallets coming to market within the near future (TenX just unveiled a new card today), I see this barrier being broken down and money flooding into the space.
Right now, it seems many new entrants to the space are still wrapping their head around the conceptual thinking of crypto and blockchain, working to understand the theory, the tech, and the mechanics. Of course, this coincides with people coming in and speculating, because they are still considered less experienced and less wise (if you will).
YET, once these people come to grasp the full potential here, and they then have the ability to simply spend their crypto at any location that accepts Visa, Mastercard, AMEX, etc. (with the rollout of crypto backed credit/debit cards) then this space will really heat up.
Keep up the great content, I will be following along moving forward!
Thanks @maven360,m appreciate the kind words and the support.
I try to look at cryptos in much the same way as the early Internet. For quite a few years, going online was a "speciality" gig for a small percentage of nerds and developer types. "It'll never catch on with the mainstream" was still a pretty common thing, even after 6-8 years. When I got my first online account and email, there were less than a half million users... and most of my friends thought it was slightly "creepy" that I was on the Internet.
We now know that the Internet was a total game changer in the communications field.
Multicurrency debit cards will definitely help the industry establish itself as having authentic currencies. I'm Danish by birth, and I can use my debit card on a Danish bank, in Danish currency, to buy groceries here in the USA, if I wanted to. It's seamless. And when we consider foreign currencies, there's also the precedent for "currency fluctuations" (in value) which is also a concern to some people.
It seems to me that the "investment end" of cryptos is dominated by neophytes and adventure seekers... which adds to the volatility. These are not exactly people who used to trade IBM and Boeing on the NYSE. As the industry matures a bit, I also think some of the wild fluctuations will become smaller... which will help the greater public feel less like it's a huge risk to hold and use cryptos.
I was thinking about this the other day and I am fairly surprised that no one has created a stEemBay yet. I checked out the steem names and domain names, and someone has snapped them up. I wonder if they are planning to do anything along these lines, or whether they are just squatting the names.
The discussion has come and gone a number of times.
To some degree, there might have been a hesitance over waiting for Steemit to "stabilize" as a platform, and for people to settle in with who the "long term players" are.
There are several initiatives working at the moment ( @steemshop @steemgigs @peerhub ), but they are only touching the very ends of what can be developed. In order for this to get serious traction, it's going to be a larger collaborative project... not something one or two people put together.
Now it has been almost 18 months since the start of Steemit, and we have precedents for "larger collaborations," for example the PAL/Minnowsupport initiative which has lots of people working on one project. Something similar would probably be needed to make a serious commerce site come to life.
Great article! One of the more interesting and thought provoking I've read in a while.
YES! I think that's a super awesome idea.
In fact.. Another guy here on steemit I saw warning of a new digital coin, I'm forgetting the name of it.. But, he was suggesting this coin was part of a conspiracy to try to tie physical assets to digital money.. And, an ebay sort of platform would be KIND of sort of similar.. People would be trading physical objects for steem.. And it would be one less point of separation from converting steem to physical dollars for such kinds of things. The more simple and easy the better.
As another user in the comments mentioned some cards are being tied to crypto and a while back I saw a guy buy groceries with steem. Using I think his debit card.. Or some kind of card. So I mean, some of this stuff is happening already, but it's still not streamlined, and.. It doesn't happen very much. Especially cause steem isn't worth enough yet, if you buy those groceries with real dollars right now, it's a lot cheaper than buying them with steem, heh. But someday that could change! I hope it does, would be awesome to go buy stuff regularly at the store with steem like you do with dollars.
I think we're moving more and more in that direction, whether it's bitcoin, steem or another coin.. But me personally. I'm still hoping it's steem cause I think the tie in with social media is critical and super appealing and anyone can mine it just by posting interesting stuff.
Also the #discussion tag sounds really interesting! Thanks for sharing.
Oh by the way it looks like currency just means to "run or flow" in it's etymology, or "true meaning".
And it looks like the modern definition is something like ..
"noun, plural currencies. 1. something that is used as a medium of exchange; money."
So.. not sure where you got your definition, but I'd say steem fits the definition of a currency. I would suggest even stocks are form of currency. Basically anything that is used to trade for another thing is currency.
In ancient times and even today you could say "cattle" are currency, or various other animals or things that are traded for other things.
@apolymask, thanks for the thoughtful responses!
The "extended" definitions of currency are definitely more generous than the "popular" ones... and yes, those could definitely include things like stocks and bonds, and pretty much anything "tradeable" that people could readily agree on a value of.
Ultimately "virtual money" (which is pretty close to what cryptos represent) makes more and more sense as we increasingly buy things from "virtual stores" and we even have more and more "virtual goods" like certain service and apps and such.
The reluctance exists in the "crossover" areas where people consider whether they can take their Steem or Bitcoin and buy a new couch. Which at the moment is somewhat limited-- or if not "limited" at least requires a level of knowledge and expertise that makes most people "on the street" a little uncomfortable.
But it's changing and progressing all the time!
I’ve been done telling people about the monetary rewards of Steemit. Those who are not already here more than likely will grasp our reward system as “odd.” A world without ad income, pateron, or directly donating in fiat cash is a consent they are just not ready to move away from.
As far as what is considered a currency. I think that has to deal with how liquid being able to barter with it is. I can go to certain online stores and be able to purchase an item without too long of a wait for the transfer. I could also covert it into fiat or other forms of currency rather easily by bartering with btc.
Now is this a perfect way of viewing it? No, I see a few holes in the matter; even more so with other alt cryptocurrency’s that are not easy to exchange and maybe we can’t view them as currency’s yet they are just “coins”.
But BTC is easier to buy something with then a stock, or a bond, or a painting.
Very true... and I think part of what's needed is for those of us who are comfortable with cryptos to simply explain them to others the same way we would explain foreign currency from a smaller country. Yes, they are definitely "money," but no... they are not that easy to spend. But you CAN (for example) use them by having a debit card that works everywhere... so you can spend, just like someone from a small country can spend the equivalent of their home currency, everywhere.
I share your frustration. Selling Steemit is looked at like selling cancer. The further worrisome part is over the dozen or so that have tried it, only 2 are still active. Two of the inactives even had very good success, post had posts over $100 and quit. Never even took the money out. Its beyond maddening. Oh and btw some of the inactives are the folks that every time I speak to them all I hear is how broke they are!!!!!!!!
Well, agreed.... and now we get out into the swampy area of "psychological gratification."
Pioneering is really hard work because you're engaged in the business of pulling people outside their comfort zones. With social media, that's even harder... because people are attached to the "investments" they have in the platforms they are already part of.
For Steemit, and bringing people over, some even get started here and then stop... "well, but all my friends are still on Facebook, and I miss the ____________"
For me, Steemit remains a "specialty sell" to a large number of bloggers and writers and content creators... but NOT the "general public." I am poking away at people I was on social blogging platforms with, in the past... and that works slightly better because their base expectations are not that this is "another Facebook," but that it might become "another LiveJournal."
Yes, that's a bit specialized... on the other hand, the biggest of the "social blogging" platforms had 33 million users in 2005. Anyway, my point here is that perhaps the Steemit "target user" isn't on *Facebook," they are Blogger/WordPress users....
I am new here, so this is a beginner understanding of both Steem and crypto in general, but yeah - it would be awesome to be able to get physical needs taken care of here. I do not yet earn enough dollars to truly take care of my needs. I would love it if eventually I could get some of them met here (and yes, I'm aware it doesn't work like "poof! You're rich now!" ...not trying to get ahead of myself, lol). If one day my cat food and litter bill was paid for with or through Steem? Or my electric bill? That would be AWESOME.
I gather that once you have enough Steem you can trade for Bitcoin and then trade Bitcoin for dollars (though I have seen one online store taking Bitcoin directly already!), but losing a step or two would make it much more simple and attractive to the general public. Ntm, I would want to shop there. Like, if chewy (dot) com acceted steem or bitcoin so i could buy my cat food and litter there? You can bet I'd prefer shopping there.
After a while, it does become quite real. Real enough (for example) that I could buy 4 new tires for our truck with what was originally Steem. But yes, the process is complex... for me, it was from Steemit to Bittrex to echange into Bitcoin, then transfer from Bittrex to Coinbase, where where I could exchange the BTC for dollars when went to my PayPal debit card.
People just didn't get used to crypto yet. They prefer to have money in their hands than have them in the system. But they don't know yet, that what you have in the system can't be stolen and is much easier to save and to you, especially while traveling.
I agree-- there's a lead-in time, for sure. But in many ways, conventional fiat money is going away-- in the physical sense-- as well. More and more situations come up where you just can't buy something without a credit/debit card. I have a store-- I can't remember the last time someone wrote a check, and cash payments are less than 10%.
In other words, people are already being "trained" that money isn't a physical thing you hold in your hand. Which has to be good for cryptos, as well.