What makes your crypto valuable?
It’s just internet nerd money, isn’t it?
Let us compare crypto-assets to something that has held value since ancient times. Gold.
Gold is valuable for many reasons. It is a medium of exchange, durable, portable, etc. Metal coins had the advantage of carrying value within the coins themselves. On the other hand, they induced manipulations, such as the clipping of coins to remove some of the precious metal. This and other problems were solved by issuing notes that were directly backed by gold.
Suddenly, you could carry more than your weight in gold, in your pocket.
Enter crypto-currencies, and the tokenisation of assets
Crypto-currencies offer a mathematically provable way to digitise assets. They offer security, speed, fungibility and trust.
Some are backed by tangible assets, such as Digix, which uses the Proof of Asset protocol to let you buy and sell real gold on Ethereum. Owning a portion of Digix gives you direct ownership of gold stored in a vault.
Suddenly, you can trade and liquidate gold bullion in every-day life with cryptographic security.
Others cryptos are backed by non-tangible, but valuable assets in today’s society. E.g. Storj (storage on the cloud), KIN/STEEM (attention economy), OmiseGo (global remittances market), IOTA (internet of things) etc.
So how do we value them?
Consider Facebook. You cannot eat it, drive it or see it anywhere in the physical world — yet, it is currently valued at half a trillion dollars.
credit: nymag
The attention you give it pours advertising dollars (and value) to its shares. Just like Facebook, owning a portion of STEEM lets you profit by holding a non-tangible asset. Advertisers needing to post on Smart Media Powered sites will need to buy STEEM from you to promote their posts. Holding STEEM lets you hold ‘tickets’ that others will need to get into the attention economy.
STEEM’s value is directly pegged to this economy, and its dollar value depends on the percentage of this economy that STEEM will ultimately capture.
Likewise, KIN's value is tied to the multi-billion dollar mobile app industry. Owning a portion of KIN lets you hold tickets to an industry that wants to capture your attention, or input, on your mobile phone.
Before owning a crypto, consider the size and value of the asset behind it, and the portion it will capture in the future.
very well written but i have a question facebook earns mostly with advertisements, but what about steem i have not seen a single ad on steemit. and what about the economy of steem you are talking about?
A great question - check out:
To get a complete picture.
Thank You for your time and yeah now I know how this works and you got yourself a follower :)
facebook has publicity but steemit is walking on its own steps, as the community grows, steem becomes more known, and with much exchange, more traffic of cryptocurrency, users winning steem among them, giving the opportunity to create a good article and get profit ,,, I think this is an excellent publicity, also that the more people are related to this cryptocurrency steem, its value will be increasing, in addition to their projects ,,, this steemit platform walks on itself, as it progresses the community grows which gives that great push to the currency ,,,,
https://steemit.com/promoted you can promote any post with steem backed dollars.
In addition there is a big market on here for bot votes. Most of the trending and hot section posts got there because people paid steem dollars to have them upvoted by robots.
If you do not love crypto then you are either way too old to understand what it will do for the world in the very near future.. otherwise, you may be a person that thinks btc is a scam just because everyone says it is, you then think it has to be... well less then 1% of the world's population is in crypto now so we are in the very very early days... I am very happy to be here.. and I am holding on to my ADA Cardano and other coins..
well written. do you have a prtfolio?
"Before owning a crypto, consider the size and value of the asset behind it, and the portion it will capture in the future."
This is a great rule of thumb and why I like to invest in platform tokens. These grow and increase in value as more and more projects are built on or utilized by them. The more projects on a blockchain platform = more exposure. This can translate to capturing a bigger percentage of the economy.
The more I use steemit, the more potential I see in it. People are blogging, earning, and advertising daily here. They tell their friends how awesome it is, and then those friends tell other friends having a snowball effect. The amount of "IntroduceMyself" posts I see everyday is awesome.
This is so true! This is the first thing I consider with every crypto investment. Even if the idea is great, the size of the asset or market it is disrupting is one of the biggest Go/No Go checklists to consider.
Exactly. Its not just about the idea, you have to be able to capture a market and then continue to keep growing and scaling.
I also forgot to mention that I think Dlive and Dtube are going to really start taking off. I'm seeing BIG named youtube stars with a HUGE audience make the switch to Dtube. Just today I saw that Furious Pete(5 million subscribers) recently joined steemit and has started on Dtube.
I'm so excited to see how many people make the switch. They are going to point an insane amount of eyes on us over here.
Did they switch or just do both now?
nice! and that's why people should consider it to post valuable and quality contents :(
True... Always take considerations on what to take because not all Crypto can go higher... ;) I like this article and this is very informative...
Awesome article! You’re so right! The value of such a great network is the ability to scale and how big a demand will be for a certain product! In this case I’d say it’s an amazing product! I love STEEM!! Steemit.com is my online home!! Lol!!
Will steem lasts so long? Because I have also read some posts about its degrading.. Hmm though I really trusts STEEM!! Just wanna ask some opinions. :)
Steem has a long way to go before it hits any type of capacity. We’re under 1%. I was wondering if you could provide links to any degrading steem content. I’m always interested in hearing why it may fail. It makes me a better investor. So far, I’m not too worried about the future of STEEM for the near future! I’m got some investment riding one it! We’ll see what happens! Gonna be exciting either way!! :-)
You sounds so great! Well, I am also excited where will Steem bring us to the future! :)
If I can still find it, I'll share it with you. Thanks for giving me opinion. Now, doubts are just 1% remaining. :)
I have huge faith in the platform of Steetmit! Promot steem like crazy to everyone! Once people see how amazing steemit is an how it works the more the world will embrace it! Go STEEMIT!
Very true, steem has a very long way to go and to be honest I think that steem might close a cup very soon once it starts hitting mass adoption. @0.0064 maybe lower maybe higher so its the right call hold onto your steem.
Maybe there will be an inflation? Here is some of the posts.
https://steemit.com/re-calculated/@fyrstikken/the-inflation-of-steem-over-the-next-30-years
I can't wait to see what mainstream sites will adopt Smart Media Tokens
Smart Media Tokens is probably gonna change the game! The opportunities seen a lot more open for sure! Can’t wait to see how that developes!! Thanks for the post!! :-)
Hahahaha. Nicee!! :)
Many people ask me to explain crypto's use and also why it has value. Your comparison to Facebook being basically a digital asset that is worth so much, gives people a good way to think about why crypto could possibly also have great value without being a physical item such as fiat currency. Great point!
Cryptocurrencies is Digitalies system of currency. We should grow up our mind and also to give idea about cryptocurrencies around us.
Thanks! Some people need an analogy they already use in order to understand a new one!
Yes, that was my favorite part. Comparing it with Facebook and how its valuation comes from our collective attention is a brilliant way to explain to people why STEEM makes sense.
"Just like Facebook, owning a portion of STEEM lets you profit by holding a non-tangible asset."I strongly agree with you.
Normally, the only condition that determines the value of gold and similar investment instruments is not demand. Organizations that have control of these values value with certain calculations. But the value of crypto money is as much as a weight placed on the scale. This scale can not decide the weight of that object, and it is the investor who puts weight (ie, determines the value). On the other side of the scale are the central currencies that are used physically.
thanks for information..
Thank you for sharing another PHENOMENAL post! I never knew about KIN. Thanks to @hitwill now I do. I am a crypto newbie, so I more than appreciate this information. I absolutely love STEEM and STEEMIT! It is so great how more and more People are realizing the true power and potential of them both! People like @hitwill make the Steemit Community so GREAT! Thanks Again for another brilliant article! I'm proudly upvoting, following and resteeming! All the best! :)
There is a crypto money type on the market today according to my meeting. Some of these are: Bitcoin. Ethereum, Ripple, Litecoin, Line, Monero, Neo, Humidity. It's because they are registered on the computer system to be virtual. Like the dollar, it is not found physically in print like the Euro, like the TL.
There is no value derived from the value of the mines or the state, such as paper money, as crypto money is assessed. The reason is that they accept that their users can change them, or that they are negotiated as a commodity. The value is determined on the market instantly and in terms of demand, just as it is in other currencies or commodities.
Superiority of Crypto Money
The most significant advantage of crypto money from real money is that it is not influenced by the economic situation of any country since it is not connected to the central bank of any country. Moreover, it is not a question of confiscation of accounts opened with crypto money or confiscation as a result of the fact that it is not known to whom it belongs and it is not supervised by a central authority.
Where is the danger?
The greatest danger to the crypto paralysis is the possibility that the use of these funds is banned by the state because it is open to monetary transactions, or the demand for the naming of accounts as in the case of Swiss banks. When this happens, they may face very large depreciation and even be worthless.
Thanks for reading .. @hitwill
Wow! This is such a simple digestion of the topic of crypto, I wished I had seen this before spending hours trying to grasp the real value STEEM. Thanks for Sharing this, now I have a resource to explain to my father the real value here.
I think the adage perception is reality applies to some of these valuations. Some buy a crypto thinking he/she owns a piece of the blockchain like a stock for a company. Others the token provides a utility for said platform.
The beauty of this whole sector is even in it's infancy, you can be fundamentally wrong and still come out ahead investing wise. The crypto universe definitely isn't a tulip bulb like some like to argue. Computers aren't going anywhere. On a side note, that Mexican Aztec calendar coin is one of my favorites.
I struggle with this topic every time someone asks me about crypto or I bring up the subject with friends.
In the end I often use many of the analogies in your post.
“It’s worth what people will pay for it”, is a common reply I use during the discussion, and essentially it boils down to just that.
People buy gold because over decades it has held its value, is safe, and at times its value goes up significantly. People buy a Lamborghini because they’re cool, not many of them, and those that have the funds really want one. People buy STEEM because they see potential and value in the technology, SMTs, and current products being offered (Steemit, Dtube, etc.). Supply, demand, speculation, all these things factor into value of an item. It’s up to the individual to make a decision on where to spend their cash and for what reasons.
Thanks for sharing.