The main reason i am considering a token is a control thing. I have no control over steem or the steem blockchain. the top 20 witnesses could decide there be no rewards pool on the base chain after smts are launched. Or they could make other changes that dont fit my needs lets just say. One of the reasons I am attracted to steem is the lack of control of even a contacts list when using other platforms. Because I don't know where steem as a token is heading ( like the rest of us) I feel that loss of control slipping back in. And I don't mean where its heading value-wise.
You don't really have control over an SMT, either. Or at least, no more or no less than you do over STEEM, in that sense. The top 20 witnesses could decide to change the implementation of SMTs at any time, just as easily (if not more so) as they could STEEM itself. There would probably be even less outcry and pressure not to make radical changes because there is less history and any individual SMT will have far fewer invested holders that matter than STEEM.
Look at the configuration wizard for SMTs that recently got circulated. Look at the only things that you can really adjust, and recognize that after the token is created there don't appear to be mechanisms to make further changes to it because, just like STEEM, that would require a "hard fork" of the underlying database, which is the Steem blockchain. Could SMTs theoretically be adjustable after set up? Sure, but so could STEEM. Is it going to happen? Probably about the same time that I am tall and get into basketball.
SMTs are being sold as a thing that will give you greater control, but they don't. They are vulnerable to the entire suite of issues that the rest of the Steem blockchain are vulnerable to, except more so because there are fewer (by definition) holders of any individual token, and thus fewer people who have to agree for any significant changes to occur.
Value is what someone makes of it. Although steem aint worth a lot, if it is use to claim a discount on a course with me 20 steem ( or as I call them to the non steem users, 20 tokens) will get you 50% off any of my courses. Whats 20 steem worth now...like less than $3. My lowest value course is €56. My highest I think is €249. I like to think I am offering value.
Value is entirely defined by what you can sell something for.
I think you are old enough, even not being from the US, to understand the following discussion. Folks who did not live through the 80s, you might want to read a book. Maybe watch a movie, sometime.
There was a type of business that made a huge amount of money in the 80s and was, ultimately, very heavily invested into tokens.
The arcade videogame industry.
For a while, every single arcade had their own, custom designed token if they could even remotely afford it. They certainly used tokens heavily even if they didn't have their own custom design. While the tokens from some have become collectible items in and of themselves, they were never intended to be more than ephemeral. Nevertheless, they represented a trade economy more like a currency than almost any cryptocommodity today.
Why? Why did coin-operated videogame arcades go in so hard for a token economy? After all, it was obviously a lot easier for kids to bring in their own quarters and play games all day. That would require little management of some sort of intermediary item that needed to be tracked and managed. Why would videogame arcades effectively all move from a fiat currency mechanism to a token mechanism?
Because tokens provided an actual use service for the arcade owners.
There were two big cost problems for arcades. Firstly, maintaining an arcade videogame console takes expertise and money. That was just an expected cost of the business, however. He didn't go into running arcade not knowing you would need to maintain the machines.
The second one was a lot more surprising. Giving out piles of quarters, keeping up with exchanging dollars for bits of metal, has a lot of overhead. It takes time. It takes attention. It takes focus. Even if you have a change belt loaded with quarters, mistakes happen on a regular basis, bits go astray, and every minute that you are handing out quarters to someone is a moment you're not keeping an eye on the place as a whole, keeping it clean, or maintaining the machines.
Eventually, someone realized they had already largely solved this problem with the change slot on every game. Why not just put in another machine that could automatically read dollars and give out quarters? Brilliant!
Think of that like a central fiat bank. Someone comes in, does a financial transaction, and goes away feeling like they got something for their value to go spend their money on.
For the arcade owners, there was a problem. This is one more machine that has to be maintained, which is all right, but it's a machine full of money and that makes it very much a target at every point for someone to try to exploit or steal. Because of what it does, it needs to be out in the public space near to the door, which makes it more vulnerable. Because it just hands money back and forth, it's always full of very valuable funds. Finally, most of them were rentals, so represented an ongoing expense that couldn't be taken out of a portion of the exchange is being made. After all, who would put $5 in a quarter machine and expect to get back $4.85? That would be silly.
But what if it's not full of quarters?
Tokens were cheap. Much less than a penny per token in terms of inherent value. Only useful within the context of that arcade, and couldn't be spent anywhere else. The quarter machine became far less valuable because it wasn't full of quarters at the beginning of the night and was nowhere near full of money even by the end – because it was very easy to go and pull money on a regular basis out of the machine without taking it out of circulation for very long. By adjusting the number of tokens individual games took, you could effectively take a $5 bill, give back $4.85 worth of gameplay – and have happy customers.
But nobody came to the arcade because they had tokens. People used tokens because there was something that they could get for that token that they couldn't get for their fiat currency. The token had a value realizable in videogame play, and as a security mechanism, but not in and of itself.
Now let's look more directly at what you're talking about here.
As you are describing it, you want to use an SMT as a discount card. As a loyalty tracker. You want the token to intermediate keeping up with some sort of invested value by the user and then give it to you in exchange for what both you and the customer consider an equal value in discount provided to them for your training. And in many circumstances that would be a reasonable mechanism – but not in this one.
"Why?"
Because the token itself cost more to get your hands on (for the user) then either side of the transaction gets out in value.
You cannot spend 20 STEEM and get 28 pounds worth of value, not today and probably not ever unless magic happens. You most certainly can't get 125 pounds of value out of 20 STEEM and that's even more unlikely.
Your potential customers can't get their hands on 20 STEEM without a significant investment of their time and attention – both of which are more valuable than the fiat currency it would take to buy that 20 STEEM. The time and attention of a potential customer is worth more than the money they are potentially going to give you in exchange for your goods and services, because that is how you guarantee giving you more money in the future for your goods and services. You don't want to waste that. You don't want to squander that.
So given that it will cost your potential clients time and attention (and some small amount of fiat currency) to take advantage of this sale price, and it is extremely unlikely for the mechanism by which they engage with the sale price to actually pay off for you in the future, how is it not more productive for you to have nothing to do with an SMT but instead use a much simpler and more useful technology like a very straightforward database or spreadsheet to keep track of who offers you something valuable in exchange for a discount, like their email address, or physical address for mail outs, or something that you can actually use profitably?
As far as I can tell, it isn't.
This is made worse in a very direct way by the fact that as far as I can tell, to create an SMT will require you to invest your own STEEM to cover the initial offering. The entire system smacks a little bit of a pyramid scheme or Amway MLM, in that you must invest STEEM in order to create the SMT and its pool of tokens, in order to have the chance to offer those tokens to other people for some sort of exchangeable value in the hopes that you will make enough back overall to cover the initial investment and some profit.
This is over and above the question of who is going to implement the software interface for you and your users to keep up with what they're actually doing with your SMT. That is not the job of the Steem blockchain. That's your job, and it involves setting up, at the bare minimum, a website with what might as well be a witness node, interfacing between the blockchain and your more mundane database tasks for actually doing your business and fronting with the users, and all of that is on your own time – over and above what you invested to get the SMT going in the first place.
Why would anyone do that?
Seriously. Why would anyone do that?
I've looked at Steem Engine tokens and I can't work out how anybody can afford to set one up for the amount of traffic that they end up getting. Tribes have the same problem as SMT; it just makes no sense given that the necessary overhead of the initial Steem investment to implement that. It is much cheaper and more reasonable, painful as it is to say, to build a website that filters Steem blockchain content to whatever your personal choice of community is and simply use the standard STEEM voting and reward system with your own simpler database riding alongside it to track user activity as you will. And if you've already gone that far, you might as well go ahead and implement some other really useful and necessary social media platform tools.
I'm not saying that giving people a discount on your content isn't a good promotional move, I'm just pointing out that no SMT – no token – is going to be useful in that context because it doesn't provide value to either you or the users, and that's just the nature of doing business.
If you want to have more market penetration, make it easier for people to give money to you and not harder for people to give you money. Make it easier and faster to get money and you will get more money. Creating a roadblock won't help, and SMTs are a roadblock.
(If people really wanted to get more value pumping into STEEM, they would blow off all this SMT and Tribes stuff and convince OpenBazaar to put in the time and effort to take STEEM as a tradable token for goods and services alongside Bitcoin, Ethereum, Monero and the rest. Then people could actually buy and sell using STEEM as a currency. As long as the Steem blockchain is obsessed with valuing itself and not connecting that value to external things and players, it will remain relatively valueless outside of pump and dump.)
I have reached the same conclusion.
I don't really know where SMT is going, there is talk of a token for companies. The adoption of SMT by companies will not be easy if it goes the same way. Inflation and without a wide market of the real economy that accepts it as a means of payment.
The current model of the cryptocurrency including steem does not have enough architecture to achieve get mass adoption as a means of payment. I think these are the first steps with successes and mistakes, there is still a long way to go. Many things in this model will have to be adjusted over time so that these tokens can achieve it.
Well, all this makes enormous sense to me. Many of my questions asked and answered. Thank you.