Yesterday, I wrote a post that discussed the possibility of $1,000 by explaining how vital it is to understand an ecosystem. We find that the largest publicly traded companies, Google, Apple, and Facebook all have ecosystems which is where they derive so much of their value. The products and services they provide is secondary in the worth since it is the ecosystem that keeps the users engaged (or is it enslaved?).
If you missed the article, you can read it here:
https://steemit.com/steem/@taskmaster4450/usd1-000-steem-understanding-ecosystems-is-the-key
Many people seem to think that cryptocurrencies have no value other than for speculation. While many tokens are presently on the market are garbage, this viewpoint is mistaken. Cryptocurrencies (coins) are tied to a particular blockchain and the two cannot be separated out. One cannot focus upon a cryptocurrency without looking at the network it pertains to.
Over the past 40 years, there were a number of studies which came about to try to identify how much a communication system (later networks) are worth. One of the most well-known is Metcalfe's Law. Over the years, there was great controversy about it with neither side proving or disproving any viewpoint. However, in 2013, Metcalfe himself showed how his equation held true when analyzing 10 years worth of Facebook data. A couple years later, a Chinese team further validated the formula when applying it to Tencent.
Without going into the mathematical equation, the Law basically states that the value of a network increases in proportion to the number of nodes. This makes sense and leads us to what is called network effect. This is where a network hits a point where the growth is exponential. It is the "everyone must have it" syndrome.
A good example is the smartphone. In 2009, not many people were buying them yet by 2012, most of the devices sold were smartphones. This continued to the point where smartphones accounts for more than 70% of the market (in the US), a time frame that only took 7 years to reach.
Therefore, we can see the value of a technology is tied to its use. This makes sense. Why is Facebook worth a ton more than MySpace? The answer is the activity on each network. Facebook has a large number of users while MySapce is significantly less.
So how does this apply to Hive?
At present we have roughly 50,000 active users. Applying Metcalfe's formula in its basic form, we come up with a value for the network of around $1.25B which breaks down to $4.88 per coin, a bit below where it trades now. These are rough calculations but you get the point.
This situation gets even more interesting when you consider the revenue side of things. When you look at a network like Facebook, part of the overall study includes the revenue generated. At present, Facebook is a $27.64B corporation in terms of its revenues. This is a very healthy number and a reason for it being worth around $600B.
Obviously, Hive cannot compare to that....or can it?
There is an interesting component to the Hive that few seem to ponder even though it is right before their eyes.
Facebook generates it revenue mainly from advertising. There are some features on there of which Facebook takes a percentage yet it is really an ecosystem meant to lock people in and charge advertisers to reach them. Of course, we know they have an additional stream of revenue from selling the data. This is a straightforward model, one that all Wall Street types understand.
But what about Hive? What commerce is being done on this blockchain? How much is really being done?
Did you know that the Hive blockchain has around $1.2B of revenue right now? Did you ever consider how that is so?
Have you ever seen this?
Total rewards fund: 3,963,859 USD / 721,854 $HIVE
Notice how it says that this blockchain is generating roughly $4M a day based upon the current pricing of $HIVE.
That is the unique feature to a blockchain: the network itself generates revenue. Think about that for a second. Facebook spent over a decade building its revenue stream to $26B while the Hive blockchain, is spitting out $4M after only a few years. The blockchain itself literally generates revenue.
If it is just a matter of creating a blockchain and spitting out token, how come everyone doesn't do it? Well if you look at all the ICOs, it appears that many are. But once again, we go back to Metcalfe. All this is tied to the number of users (MAU-monthly active users). A blockchain can spit out all the coins it wants, if only two people are using it, there is little value.
This is not the case with Hive. Not only is it putting out roughly $4M in revenue each day, the 50K daily active users are producing around 1.5M transactions according to blocktivity.info. This is the highest average of any blockchain out there (50% more than ETH which is #2).
As you can see, these are the reasons to be so excited about Hive. It is the most active blockchain while generating a great deal of revenue. Once the network effect takes hold, we will see things explode.
Basically you can think of the Hive blockchain as the merging of a social media platform along with a financial institution. It has properties of both.
And by the way, according to my rough calculations, $HIVE will have a $1,000 value at around 26M active users.
I will leave it to you to play with the growth rate from 50K user to determine when we will hit this total.
If you found this article informative, please give it an upvote and a rehive.
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I think your math is wrong. That’s the size of the reward pool rather than how much is generated per day.
If there are currently a bit more than 260 million Steem and the Steem inflation rate is just over 9% per year, that works out to ballparkish 65,000 Steem per day.
For Metcalfe’s Law, the value of Steem might rise as the square of the number of users. More ballparkish numbers, let’s say 500,000 total members nowish going to 5,000,000 members at some point in the future, a 10-fold increase. The square of that being 100, that would put the value of Steem at $500 at around the 5,000,000 members level.
Disclaimer: This should not be construed as financial advice. I am not a registered financial advisor; I don't even play one on TV. Do your own due diligence. Batteries not included. Objects may be larger than they appear in mirror. Some assembly required. Do not taunt Happy Fun Ball.
We are going to be in for such a treat once our active user rate grows to a million, and I do believe it will actually help us greatly with the current whale problem we have here on Steemit as well.
Imagine, great content creators joining who aren't subjected to the amount of Steem power they currently have. They will not only thrive here on Steemit, but they will attract others of their kind to the platform as well, which will inevitably help Steemit shoot for the Moon in not just value... but quality too.
I'm looking forward to a great future here on Steemit! 🐳
i also believe in crypto mny county is starting this thanks for info😊
Yes, it all comes down to Metcalfe's law. As economists surely know, the value of things can be measured from two perspectives: the value of using those things ("use-value") and the value that can be obtained by exchange them ("exchange-value"). The use-value is easy to SHARE on the Internet and this is nothing new. The novelty is that the exchange value thus generated can now be distributed instead of being all centered on the platform owner as you very well refer (e.g. Facebook). From now on, thanks to the advent of trust-generating protocols based "only" on mathematical rigor (!) the exchange-value will be TRANSACTED in a "peer-to-peer" (P2P) basis on the Internet, making trusted intermediaries obsolete. Thus, any exchange-value that can be decentralized will tend to be decentralized (as is already the case with respect to use-value on the Internet) and any value proposition, both tangible and intangible, that can be "tokenized" will tend to be "tokenized". This P2P networking effect not only creates more utility globally as it has done so far ("Metcalfe's Law") but now also creates more value-for-money and I strongly believe such atomization will make decentralized communities as Steemit and distributed autonomous organizations (DAO) more competitive than any centralized organizations.
Not only that, I think it will also send innovation through the roof. Centralized organizations stifle innovation....this is what makes decentralization so powerful. Whatever someone can come up with, they can put on the blockchain. If it is accepted and used, it is a winner. The users determine whether something is viable or not, not a central authority.
Great points all around.
I have seen several other intelligent people predict huge prices in the future per steem. I, of course really hope those predictions are right!
But we must never forget the responsibility we have now as this community to make a steem a welcoming and positive place. I think we are important for the future success of the steem blockchain, so we need to keep making a steemit a great place for interactions.
A really positive post with some interesting numbers!
Some folks don't seem happy with the level of active users, and while it's true that we haven't exploded in this regard, I'm almost happy Its not been the case as we have the 'early adopter' chance of getting some SP before things do ramp up.
Great work here!
Very true, the early adopters will give an edge for sure when things explode. I do believe that those who consider 50K active users to be less number, well, it is not a social media platform where you are sharing low quality posts. People write useful content and share great knowledge to learn from which takes time. In blogging world 1000s of blogs start every day but then going through the hardwork and pain, 80% of them stops by end of 6 months once they realize how much effort it takes to write quality content.
So, I do believe if majority of these active contributors are quality content author and curators, it is not disappointing at all given the nascent years of Steemit.
Yes, some fair points you have here.
We have years to go all being well, and hopefully by then even a few thousand SP will be something to write home (or blog!) about. Cheers!
I like so much the feel of these words. A social platform and a bank, all rolled into one. Steem is not going to take forever to achieve 26M users. Word is getting out so fast about steem and steemit, you just sit back and watch the influx that would soon be , with alacrity. What it took facebook a decade to achieve, steem will achieve in a very few years. So your projection of $1000/steem is a very viable one, in the not too distant future
With communities there is no better blockchain out there!
I think there will more users too since just last week Facebook, YouTube and Hugfington Post made it harder to make an income from writing and running a micro business.
I’m a super newbie with less than 50 Steem Power and I already brought people to the network.
Keep going! Valid points.
Whatever way you slice it - upvoting something and having it be worth .01 SBD is better than any Facebook “like”.
"1000 likes to build a well in africa"
Steem is going to surpass facebook and it will not take as much time. Since value is attached to usage, just be patient a-while and see how steem will increase in an exponential manner. Thank you for this motivational post.
According to your calculations how long until 26M active users?
I havent worked it out @davedickeyyall.
I think we have to see what the growth rate is when we start to see the automated sign up.
At that point, we are going to see how much interest there is....I dont know if there is a present backlog of people who signed up but they just havent gotten through yet.
And here I thought you had already worked out the math..
LOL nah....my guess is we can hit it in three years with just the apps the way they are...
Tokens created with SMTs will quicken that although it might not reflect directly in the price of STEEM.....
Either way, it is all exciting and I think we will be happen campers...you might not need rolling papers in the future...just use dollar bills.
I already use dollar bills..rolling papers have more value
That is a very interesting way to look at the price of Steem. I studied Metcalfe's law when looking at the adoption rates of a network Vs. the time it took for a platform to be adopted. I am working on data at the moment, but I am trying to anlayse the rate of change of the growth of Steemit, then use that data to figure out where we are on an adoption curve and where we will be in six months - although it is proving difficult to get these calculations right!
Anyway, while I have a more conservative figure in my head for STEEM, it's hard to argue with the numbers and logic that you presented - I think we would all be more than a little bit happy if STEEM hit that price! Thanks for the post, would love to talk more about the work that you are doing.
Very intersting points and breakdown of the numbers, thank you !
Very interesting. It has been clear to me that Steem has a lot of potential, but I hadn't sat down and done the calculations like this. The great thing about a platform like this is that the user count can quickly snowball into massive figures. It's definitely worth holding on to Steem in my opinion!
@taskmaster Always the man has been in search of his well-being and how to see it reflected in his daily life. In the beginnings of humanity and even to the present, riches were based on gold.
Source image
Photo taken at Bogota Gold Museum
With the advent of computer technology and the revolution of cryptocurrencies, now wealth will be reflected in a computer code, transmitted in seconds anywhere in the universe. Steem is one of the most attractive because thanks to steemit we can add value to many of our skills and knowledge. Best regards
If you think about it, 50,000 daily users is nothing, that's less than the amount of people that go to a Cornhuskers game every weekend. That's half the attendance at the Rose Bowl. When Steemit takes off with 500,000 daily users, creating quality posts and upvoting, the price of Steem should skyrocket, slow and steady wins the cryto race. Great job task, you always get me thinking. 🚀
I was a little disappointed to see that it’s only 50,000 users. Does that take into consideration how much steem Power non users have?
A person with 50 steem power who hasn’t been posting is more likely to come back than a person with only 5 SP.
I don't have exact numbers, and don't know how to find them, but I'm going to make an assumption that daily user growth is ~10%/month
If that's true, and user growth rates remain static, we will hit 26 million active users in July 2023.
👏🏾👏🏾👏🏾👏🏾
What's amazing with Steemit is since it's decentralized if an upgrade is made to Steemit.com that users don't like they can create their version of busy.org and revert back to the old interface while being able to continue to interact with the blockchain.
Also, with the creation of steembay, steemclassifieds, dtube, etc. not only are we taking on facebook, but multiple other social networks like twitch, youtube, instagram, etc. all on a single platform.
I’m sure we can reach $100 Steem in about 4-5 years at this rate
I believe we will hit that by the end of this year.
I have a Pinterest Account a Facebook Page, and a twitter account and I simply stopped using them so I could concentrate on writing on steemit. Now that I see how much $$$ value each new user brings, I will continue using those other platforms to spread the word about my writing on steemit.
Perhaps my readers will like me work enough to sign up to upvote me (and then maybe start posting some of their own work.
Let’s grow this platform!
Excellent article. Proceeding from it, the more we attract users, the more active users will become. And, the more active users, the more valuable the system. Ta. That each of us can make Steemit better by attracting new users. Good luck to you and Kind.
It gives me great joy that thanks to my trending post I will hit the 1kSP mark in about a week or so.
I have it in my mind that Steem will reach $100 at some time in the future, would love to believe it could still happen this year as you state.
Having said that, completing the 1KSP program will definitely give me a huuge moral boost to start competing on the 2KSP program and so on.
Plus, I already started mentoring some smaller fishes myself.
Cheers!
Congrats on that...you are a great addition to this site @spiritualmax. I am glad you are close to completing the first leg of the journey and it is good you are starting to help others. That is a wonderful way to approach things.
As for $100, I believe you know my feelings on that one....it is a given in my opinion.
The blockchain is making it possible for many struggling people to have a way to have a good life and crypto currency is truly a great benefit. Thanks for sharing this informative post!
Is Google picking up posts here? I hope so, because your articles are wonderful examples for good marketing - especially for the outside world. (I just wrote about STEEM marketing in a post myself)
I don´t think, that STEEM will ever go to $1000, but as always I love your passion of promoting "us". (...and trying to not sound like a fanboy, even though I have to admit, that I am... ;))
Is that payout model $4 million a day or $4 million over the next 7 days? I understood it to be the latter.
Aaaaa man, you ended with a cliffhanger :)) and I suck at math.
Aaaaand that’s why I’m reading the comments - seeing if anyone is doing the math.
I can’t decide if this makes the writer a reader generating genius or a lazy mathematician 😂😂❤️❤️💃🏽💃🏽💃🏽
Awesome comment :)))) I'm definitely lazy but not a mathematician :D
I think crypto is the world's next big thing and every country is starting to fear the new rise, whatever happens in the future I like crypto. Thanks for this post
Informative post.Thanks for sharing it
Good job.Keep it up
5 years? I think sbd might hit it first.
$30 steem eoy possible !
wah your post is very useful
Today I'am just recieved this email. The Grantcoin team is pleased to announce that we're moving forward with our plans to relaunch as Manna. Over the next 2-3 months, we are working to complete the following: New blockchain for manna token
That is good I would love to see it if you could copy/paste it here.
I’ve seen manna mentioned a few times, but I’m still not savvy at HOW to research coins. Do you have any pointers for me?
You post a message about cryptocurrency, I have paid a lot of attention to this post, this post is very important to me, and I learned something new in this post's mind, thank you very much for doing so a great post-misconception. I love cryptocurrency, because it can make people's financial life strong
a very interesting post.
describes the network and wealth using steemit ..
I also use steemit to change the standard of living better, and help people in the neighborhood.
sorry in advance if my English is not good
How long were you on here before you started making an income? Did you buy steem to get started?
impressive numbers! honestly did not think that we are going at such a pace, and it's great!
I can see that pace continuing to quicken, too!
Nice post ..
This is awesome. We need more posts from you.
Thanks
i really like your posts' and i want to learn like you ..
can you give me feedback so i can be like you ,, thanks @taskmaster4450
This is a very helpful post.I mean you have discussed think of steemit.Thanks for your informative post.
Your survey of public businesses is wonderful. I have read your blog yesterday from the link below. Thank you.
Steem will give the opportunity to many people to generate some revenue. The more people will share the content on other media, the more will come to Steemit.
excelente publicacion
cryptocurrency is our future.keep going with that.future will be bright i think.good work in the artical
Everytime I read something positive like this, I want to sell away my other altcoins and throw it all in Steem haha. But never mind, I should just keep on participating in this amazing space. Thanks for the detailed analysis. Definitely in long position towards Steem!
I personally believe that steemit is still underground. We have not even reach the surface and yet steemit are growing rapidly in a short period of time. I am glad that I am in steemit now, as we build a better economy of the world. Stop world porverty.
This why we all have to make this platform works. Its a collective work....and @taskmaster4450 I remembered one of your bog you predicted SBD/steem hitting $10 that almost came true. And this $1000 is looking like a reality already.
Math was never my strong suit but you can see the network effect in everything.
The value of something comes from the utility people get out of it. The more people who find something useful, the more value it has.
Getting paid to produce content is clearly useful to most people. The value will increase at an exponential rate with mass adoption.
$1,000? I don't know. But I don't have much trouble imagining it.
Thanks for the post.
Keep Steeming!
True friend, this steem is a medium to overcome poverty all over the world. I am aware of it, just a few months I joined here is clear picture, I am very happy to join here. Thank you guys for your writing this. Glad to be friends always with you.
Sir @taskmaster4450 i really knew nothing on this topic but surely your post and answers in comments section has genuinely helped me a lot ....fella keep steeming!!