Found : The Crypto for mainstream adoption
Bitcoin was the first, but it is really the best? What are we really looking for in a crypto when we want to buy and sell stuff in the course of our day to day lives?
If I am buying something with crypto I am looking to use one that is secure, stable, fast to transact with very low fees. That doesn’t exactly sound like Bitcoin – whichever flavour you are into.
According to Wikipedia there are now over 900 cryptocurrencies available on the internet and while I haven’t investigated them all, I have been working my way through them to evaluate whether they are suitable for the job. Let’s have a quick look at the four criterion I’ve listed above and see if we can find one of these 900 cryptocurrencies that will meet my requirements.
1. Secure – Most cryptos are secure from a cryptographic perspective and you might be hard pressed to find a crypto which uses really bad cryptography. But security is more than that, a good crypto needs to be secure against counter-party risk and centralization. A crypto like Tether fails this criteria because if the bank or organisation holding the deposited funds goes down then it collapses. Same with BitConnect and their in-house exchange. Basically any crypto which has a single point of failure, either technical or organisational, is out. So too is any crypto which is too centralized and is in danger of being hijacked or forked. That rules out a lot too – including Bitcoin, which has both heavily centralized mining AND is gearing up for yet another fork this November.
2. Fast To Transact – If I am buying a cup of coffee at the local café, I don’t want to be waiting for a 10 minute block time and then however many confirmations required on top of that. I want very quick block times, maybe just a few seconds. If cryptocurrency is ever going to have a hope of breaking into the mainstream then payment needs to be just as fast as VISA or EFTPOS, if not faster. So once again Bitcoin fails here and so do a LOT of others. For a while I thought DASH or PIVX and their InstantSend feature could be a winner here so let’s put them on the short list for a moment.
3. Low Fees – Again using the cup of coffee example, I am spending a couple of dollars here and so the fee on that transaction needs to be very low. Maybe just a couple of cents maximum. VISA charges merchants in the vicinity of 1.5% per transaction and it needs to be better than that. On a cup of coffee costing say $2 that means transaction fees need to be maybe 3 cents maximum. Let’s rule out Bitcoin for the 3rd time with its transaction fees higher than the cost of the coffee in the first place.
4. Stable – The value that the crypto represents needs to be stable. No merchant or customer wants to have money in their wallet or bank account which fluctuates wildly. It is far too big a risk for the mainstream to be operating with a volatile currency and the mainstream are NOT currency speculators. To get confidence of the mainstream to use a crypto you need trust that it’s value is not going to drop before it can be spent.
This is the killer for most cryptocurrencies right now and while people reading this blog might be accustomed to speculation and volatility in the crypto market it is a massive liability for mainstream adoption. Just for fun lets rule out Bitcoin for the 4th time after it went from near $5K to $3K (a drop of 40%) in under 2 weeks this September. DASH and PIVX can be struck from our short list too.
So what cryptocurrency exists that can meet all these criteria?
Well, I have found one and it was in a place that I least expected to find it.
Now some of you might laugh and write this post off straight away but I ask you to stop and think about it for just a moment before you do.
It is Secure with no single point of failure from a technical or organisations perspective. The Graphene technology and it’s witness infrastructure ensure it is supported by a strong and self-healing network.
It is Fast To Transact with 3 second block times
It has Low Fees of basically ZERO. All you need is a few Steem vested into Steem Power and you have FREE transactions. Ok, so maybe you can count that as an opportunity cost if you’re being pedantic but it is still negligible.
It is Stable and this is the toughest one. STEEM DOLLARS are backed by Steem and are basically a debt instrument (not unlike our existing currencies) whereby the Steem network promises to redeem each STEEM DOLLAR for $1 USD worth of STEEM. Admittedly, it does fluctuate a little bit with the large capital flows of the overall crypto market, but really it shouldn’t because its value will ALWAYS return to $1 USD.
As an added bonus the barrier to adoption is even further reduced for everyone already transacting in US Dollars. No need to change price tags or invoices!
So ask yourself the question, if you were buying a cup of coffee down the road, would you be happy to pay in STEEM DOLLARS? Would you be happy to be paid in STEEM DOLLARS?
Is it that much of a stretch to imagine that in the future small businesses will create a profile on Steemit to put up specials and communicate with customers….and then buy and sell products and services with them VIA the platform?
Images and Credits
http://www.azquotes.com
https://emergingequity.org
http://advantagebizmag.com
https://www.dashforcenews.com
http://www.prosigns-eg.com
http://mantralogix.com
https://www.weworked.com
https://www.meetup.com
https://transom.org
http://innovatechnologies.net
That is right, @buggedout. SBD is one of the marvels of crypto land. I don't know how the steem blockchain manages to keep it pegged to $1 USD, especially with all this volatility!
If someone can explain that to me in plain English, I would be grateful.
SBD is so stable that if it goes below $1, you can buy it and guarantee a profit soon.
SBD is what steem owes u. Steem will convert the value of steem to make 1$BD. So if steem is worth 50 US cents, steem will need to convert 2 steem to give u 1$bd. So no matter the value of steem, your SBD will always be worth 1 USD.
Thank you, @foovler. That is an easy-to-understand explanation. Can you help me more please:
1- Who pays for the Steem used to convert the SBD? Is it withdrawn from the reward pool?
2- How does the system know the price of Steem? Does it have a live feed from exchanges?
Thanks mate for explaining it clearly.
Forgot to add.. unless value of steem is zero...
It's a bit complicated but basically the elected witnesses publish a price feed that says what the price of Steem is relative to Steem Dollars. So if Steem goes up, the witnesses increase the feed price and that keeps Steem Dollars at around $1 USD. You can convert from Steem to Steem Dollars and back within the blockchain at any time via this price feed rate.
Thank you, @buggedout. This is a little bit complicated. However, after I read @foovler's response, I am starting to understand it better.
Thank you, both.
This comment has received a 1.12 % upvote from @booster thanks to: @sadekj.
That is an idea I haven't seen before but given your reasoning I think it makes perfect sense; Steemit would make a great marketing and communicating platform for businesses. Who knows, this sounds like it really could happen someday.
I'm glad you agree. I think it's already starting to happen. Check out my friend @jackmiller post where he is selling his car on Steemit and accepting AUD, Steem and STEEM DOLLARS.
https://steemit.com/classifieds/@jackmiller/73uybi-selling-our-family-car-vw-tiguan-reg-to-13-03-2018-pay-in-steem-and-or-usd-aud
All the building blocks are there. This all could happen very quickly!
Really cool to see Steemit being used in ways not thought before.
Actually I'm pretty sure all of this was thought of before. Here is an excerpt from the Steem whitepaper :-
"Merchants give users a way to quickly convert their cryptocurrency into tangible goods and services. Merchants need a currency pegged to their unit of account, normally dollars. Accepting a volatile currency introduces significant accounting overhead.
Merchants will accept any currency if it increases their sales. Having a large user base with a stable currency such as SBD lowers the barrier to entry for merchants. The presence of merchants improves the system by creating an off-ramp for users to exit the system without going to the trouble of using an exchange."
Oh I see, haven't read the white paper myself. Thanks for pointing it out.
The uses of Steemit are almost unlimited, mainly because it incorporates the financial aspects of life too.
As soon as Steem and SBD become similar to BTC in the sense that Fiat currencies can be directly traded for them, all business 101 transactions shall become a "normal" thing here on Steemit.
If we look at other social networks out there, most if not all of them are actually being utilized for business101.
The page @classifieds here on Steemit is trying to break the ice on this, trying to promote the idea that Steemit is a place where people can do business101, where Steemit can be utilized as a tool for every business out there, as are other social networks.
I'll just give an example:
A real estate agent can do the following:
Build a portfolio.
Go into direct communications with potential clients.
Ensure that this is THEIRS and THEIRS ALONE, without the "big brother factor" as on other social media sites.
Other businesses can give shares to their workers, via subtokens. (like the new Pocket Tokens here on Steemit)
So there are countless opportunities out there, all it really takes is for people to break the ice. To actually go out there and start using Steemit for more than "just blogging".
The tags are the tools here for people to use when looking for something and this is something that we all as users need to start making uniform. otherwise users shall as up to now, be surfing around looking for things.
Like for example the "classifieds" tag, once it becomes a commonly used tag, all classifieds like posts shall be accessible with just one click of a mouse.
We have the tools here, we just have to start using them!
Thank you for the explanation.
Great comments @jackmiller. Thanks for dropping in!
You've got the vision my friend. Jokes and blokey Aussie banter aside, you're a clever clog no doubt about it.
Agreed! I feel we just have to move to a world where the fiat<->crypto conversion is not essential (i.e., you can buy a ton of goods and services and stay inside the cryptocurrency domain). "The KIng" has us "by the XXX" as long as we require access to his currency.
Most excellent post mate. Very well thought out. I can 100% agree that SBD is probably the best gateway between fiat and crypto right now, even if only for it being pegged to the USD. I've been wondering what the point of SBD is, and I think you just hit the nail on the head!
Thanks bmj. You've summed it up nicely. SBD is a gateway between fiat and crypto.
Great article Buggedout. I resteemed it.
Both my wife and I love Steem. it ticks most of the boxes for a crypto currency as you say and is ripe for mainstream use. Jerry Banfield has made some pretty big calls on the future value of Steem. I hope he is right and I can give up my day job in the future.
Thanks for the compliment and the resteem. Much appreciated :)
I hope Jerry is right too and I have a good feeling that he is. As your wife so eloquently put it, we are on the lunatic fringe but these crazy ideas have got to start somewhere and it's good to get in early!
That is a very interesting perspective....I half expected you to talk about some crypto currency debit cards such as tenX, or about a payment system such as Metal, but that was totally unexpected! But it does make sense, if Steem can really go mainstream, I can see that happening.
Yeh, I kind of had to hook you in there a little bit :)
One thing I learnt in my career is you never start proposing a solution without first explaining the problem.
Correct me if im wrong but doesnt steem have the most individual transactions per day of any crypto? Its platform is already up and running and being used by alot of people on a day to day basis, thats more than to be said of 99 percent of these coins.
Absolutely, it is going great but Steem is still in the shadow of Bitcoin so far.
What I'd like to know is how much of those transactions would be real world commerce with reach outside the platform.
Probably not much but how much Bitcoin is being used for real world commerce? It's mostly for investment still. I think once we reach a few million users and start eating into Facebook and YouTube it'll really take off. I'm envisioning King coins of each market, online gambling, gaming, advertising, social media, one for each niche.
This is a fast and not well thought out response, so I am not going to be worried if any reader shoots me down.
Many days ago I looked at the price chart for STEEM over the last few months. Except for that period in early summer when “everything went crazy”, what I see in the chart is a gentle downward slope and stability.
When I learned that new coins have to be minted and distributed all the time as the user volume grows, and hence the potential for supply coming onto the market being always substantial, that price pattern made sense to me. It told me that if I bought STEEM with hard-earned cash, which I certainly have done and have it all in Steam Power, it will be foolish to look for capital gains.
I never thought of your reasoning, which looks solid to me, except that those holding it in reserve for the long-term might not be happy about that downward sloping curve. I’m happy because I am looking for a NON-financial ROI! How’s that for strange thought?
Actually seeking a non-financial ROI is not such a crazy idea on STEEM since the value of networking and collaborating with like minds is hard to quantify but definitely has value.
I admit the inflationary properties of STEEM did make me wonder if the price might gradually erode and that's one reason why it might buck the trend of high speculative excess as we're seeing in other crypto assets. Now that I understand it though I can see the bulk of the inflationary pressure is borne primarily on the liquid STEEM. All those people holding liquid STEEM on exchanges or slushing around traders accounts are effectively transferring wealth to the reward pool. It's a brilliant design that rewards long term vesting.
Thank you for your most interesting comment and apologies for my late reply. Only today did I learn (I am a Newbie) where to go to keep track of replies. I guess I got lazy from all my forum services which arrange to have an email messages sent to you when there are replies.
I feel that we should expect the long-term slope of the price on STEEM to turn upward only when the volumes of recurrent demand in the marketplace exceed the volumes of new supply being brought for sale as a result of the token creation and payment system.
If you look at the price curve on STEEM and ignore the hysteria/euphoria that affected many coins early in the summer you'll see what I feel is the long-term trend line, So investors here need to look for other than financial capital gain for their ROI.
This remark and your opening comment bring up a big and important subject. How should we conceptualize value? To make sense of our lives, value should not be seen as being equivalent to purchasing power, let alone some quantity of money paid for item X? Network value, e.g., is much broader than it is normally presented to be in the cryptocurrency literature (I cover this near the first half of my video at
I feel that these matters have notable implications for the way that we recognize value and justify parking fiat at money in Steem Power indefinitely.
Cheers!
Once more people start using Steemit then this could actually become a reality! The funny part is before I scrolled down all the way Steem Dollars popped into my head... We think alike!
Indeed. When you think about the challenges crypto needs to overcome to go mainstream it really is just plain logic to come to this conclusion.
Very good article and well reasoned arguments.
Using Bitcoin as an everyday currency was once seen as the key to mass adoption. However, this goal seems to have been abandoned now as Bitcoin is seen more as an asset class/investment tool.
Thanks. I absolutely agree. We are seeing a diversification and specialisation occurring within the crypto-sphere where I believe that Bitcoin is positioning more as a store of wealth or reserve currency and others will take niches for point of sale transactions, privacy, decentralised app development etc.
For this article I am really focusing on the point of sale, which I believe will be the driver for mainstream adoption of crypto to be used AS a currency.
took me a while to get around to reading this, but I really like how this was laid out.
I know I'd accept SBD for my products if I had a payment gateway to add onto my website.
Thanks Gohba, appreciate the positive feedback.