Steemians all over steemit.com have been going gung-ho about Smart Media Tokens(SMT) today. Unless you have been living under the rock with a steemit account you might have already checked into https://smt.steem.io/ to find out what the hype is all about.
Since everyone is blogging about this, I decided that I will give my 2 cents worth of opinion anyway(doesn't cost a dime!). I have been around for exactly 37 days, so I am not well qualified to comment about how this graphene blockchain that relies upon a unique 'Proof-of-Brain' system works.
The SMT as of now, looks like Steem on steroids.
For starters; the 44 page long Steem whitepaper has metamorphosed into a 61 page one.
What is the gist of this whitepaper?
- I will not delve deep into the technical details.
- SMTs will be built over the STEEM blockchain.
- 1 USD registration fee(as of now) for creating new token.
- Anyone can create tokens.
- Zero transaction fees.
Real world usages
- You can make a single token Disqus-like application (steemit.com,busy.org).
- Or create a multiple token application with a separate token for niche activities.
- The most interesting option is the ability add SMT layer as widget to any existing website, incentivising the commenters.
- Imagine your relatively unknown blog generating dollars for commenters; they will be swarming your blog like ants to sugar.
- Using SMT to raise incentivise sub-communities like sub-reddit and also to raise funds.
- DEX type token exchange with no transaction fee.
How does the whitepaper propose to implement these changes?
- You will get a control account accessible to a group of users, more or less the admins of the tokens.
- Creation of ICOs for the tokens.
- ICO creator has to set the STEEM size for the ICO, could be 1 STEEM or even 0.1 STEEM.
- ICO creator can set the Max and Min cap for the for the ICO.
- ICO creator has to set the effective launch time.
- If the ICO is not launched by the expiry of launch time then STEEM are automatically refunded to the investors.
- The ICO will be automatically cancelled if it does not meet the minimum cap.
- All other stuff are too technical and may evolve before launch in 2018 as they are mostly interconnected to the next STEEM hard fork.
*The token generation and SMT based rewards system has already been readied for implementation in the HF21. Looks like steemit is going to give HF20 a miss.
What are the benefits to STEEM?
Since this is a new development; how does this affect our existing blockchain?
- STEEM will increase in value over time due to increased demand.
- STEEM may become the next advertising network where mainstream media will be trying to gain eyeballs through the trending/promoted tab.
Sounds too good to be true so far, are there any drawbacks?
Let us see...
How many of you have heard about 'Cobra Effect/Rat Effect'?
The term comes from the times of British colonisation of India. When the British shifted their base from Calcutta to New Delhi they were wary of the number of venomous Cobra snakes found in that region. In order to tackle this, the British announced an incentive scheme where they would pay the locals for every dead cobra shown. The greedy locals began breeding cobras to get the rewards being offered. Hanoi under French rule witnessed a similar situation involving rats.
Now let us see this in the context of proposed SMT. Greedy people will begin spamming the comments in order to get the curation rewards, they may even code bots or create multiple account to circumvent any policing measures employed by the administrators.
Another phenomenon known as 'Peltzman Effect' may occur.
Peltzman effect states that when there is higher risk involved; people tend to play safe, but if the risk gets reduced; people tend to throw caution to the winds negating the risk reduction measure.
Seatbelts are an example of this effect. Drivers without seatbelts tend to drive more carefully than the ones with seatbelts and hence negating the safety benefit of the seatbelt to a great extent.
Now in SMT terms, there will a flooding in token creation as organisations will queue up. They need not worry about creating a basic architecture and can build upon an already proven backbone compromising the quality of tokens and content.The cheap $1 initiation fee will also amplify this problem. It would be better if there is a scalable registration fee based on the size of the organisation that is trying to get into the ecosystem.
STEEM,Steem Blockchain Dollar, STEEM Power, VESTS... Introducing SMT:
We, particularly the new users already have a hardtime understanding the relation between the various types of rewards available in the system. Now add SMT and its coins into the mix; there will be a deluge of coin synonyms confusing everyone in the market complicating the blockchain.
SMT as advertising backbone:
If SMT's trending or promotion algorithm is going to be a copy of the current Steemit versions then the lists would be highly skewed by the voters who have influence in the system which they might have purchased in the ICO and not earned through curation. The promote algortihm favours the article with largest promotion cost to occupy the top slots. Smaller articles will have no chance of making an headway. I had tested it the other day and you can look at my findings in this article.
I am a part of the Steemit Business Intelligence community. We all post under the tag #BIsteemit. If you have an analysis you would like carried out on Steemit data, please do contact me or any of the #bisteemit team and we will do our best to help you...
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Cheers and happy steeming,
dbdecoy
