STEEM user base is ripe for a Centralized Exchange
Developers Must Build a Centralized Exchange
Steemit Market
We have a Steemit Market, but that is only good for small volume trades between Steem and SBD. Have you ever looked at the large transactions? They never use the Steemit Market. They can't use the market. They also can't trade against other currencies. They are forced to take the large sums of STEEM and SBD offsite to a real exchange. Those exchanges are taking fees that profits the exchange. Steemit doesn't benefit from these large trading volumes. I've also seen the Steemit market manipulated by large transaction to affect price which can negatively affect users trying to use the market.
BlockTrades
This is not a solution either due to high fees. BlockTrades is an Over The Counter (OTC) exchange. It will never compete with a real exchange and no one uses it for very large transactions.
Both of these trading options have their place, but there is a massive vacuum where a Steem Exchange should be.
The Fix
I propose that the Someone build and operate an exchange. The Steemit Market can remain just like it is to cover small volume trades between STEEM and SBD. BlockTrades can remain just like it is to handle simple OTC transactions. The Exchange would work on a virtual currency system just like other exchanges use. One can transfer STEEM or SBD to the new exchange before trading takes place. That will fix the transaction speed issue from drowning the Steemit Market and provide another option. The exchange will also need to include other currencies. This would fix the volume issue and add revenue. Let's also give multilingual options. Open this up to the rest of the world. German, Russian, Spanish, French, Chinese, Japanese just to list a few.
This exchange can charge a tiny fee on trades just like any other exchange, then they can generate revenue. Exchanges are highly profitable by doing this. Trades between STEEM and SBD can remain free as there is no cost to transfer STEEM and SBD. STEEM will also be a primary trading pair which will boost STEEM as a popular world currency. By adding other currencies and charging trading fees, they create a source of new revenue.
An exchange will bring in new users to this platform. Other major exchanges have around 10 million users. Binance has exceeded this in less than a year. Steemit is over 2 and half years old and barely broken 1 million users. If Steemit Inc runs an exchange, this will create an avenue for Steem Exchange account users to become Steem account owners. The amount of visibility to this platform would be enormous. Value would be added to Steem platform as the value is expected to follow Metcalfe's Law. This is an exponential value prediction that Facebook closely resembled in which value is expected to increase by 4 times for every time the number of active users doubles. STEEM is expected to follow Metcalfe's Law.
In conclusion:
- Whoever creates the exchange can profit massively from running an exchange. This would support operations even when the price of STEEM is down.
- Make STEEM and SBD a common trading pair with everything else. This doesn't exist and would make STEEM a powerful currency like Bitcoin and Ethereum.
- A STEEM central Exchange will bring in huge numbers of new Steem. users. This would provide STEEM dominance with all the other competition emerging and grow value.
The best part is:
- The exchange creator will already have a STEEM user base ready to go and start using. There is no need to worry about getting people to adopt the new exchange.
If you ever thought of creating an exchange but worried that it wouldn't get adopted, a STEEM exchange will give you the edge to be successful. You will also have SMT options in the future to trade in your exchange that the other exchanges won't have. This will be an enormous advantage for your exchange.
---------------------------------------
For a breakdown of how Steemit Rewards system works:
https://steemit.com/steemit/@socky/simple-steemit-rewards-breakdown-how-it-works-since-hf20
For a breakdown of Steemit Keys:
https://steemit.com/life/@socky/do-you-understand-your-steemit-keys
For a breakdown of why Steem Power is Important:
https://steemit.com/steemit/@socky/why-is-steem-power-important-beginners-read
How to improve STEEM payment system:
that would be cool but it seems like the competition for exchanges is too stiff, there are many be added and expanded every day. i don't see the steem user base being strong or active enuff to support their own, unless it is really well tailored to steemians somehow
Major exchanges such as Poloniex and Binance both recently spent a month and a half to get their STEEM node back in operation so that their STEEM wallets were functional. An entire month and a half... When it comes to STEEM and SBD, it is very easy to snatch up that market of users.
Case in point, I gave Binance the Jeffy award for their amazingly slow ability to get their wallets functioning.
https://steemit.com/steemit/@socky/both-poloniex-and-binance-wallets-are-now-fully-functional
yeah, things are still quite sloppy in crypto. whoever gets their act together first is going to clean-up if crypto is able to gain footing and start another uptrend // ty, and peace
I believe with SMT, a DEX will be created to exchange with Steem in both direction.
Posted using Partiko Android
Unfortunately a DEX won't get enough volume to make any difference.
You can be the guy who create it. :)
Posted using Partiko Android
I would love to, but don't have the resources or programming skills. However, I wouldn't mind investing in it.
Wow, this is a very nice idea.
I really hope someone picks this up, I'm sure this is feasible even though there are plenty of issues like cash to worry about
Ummmm.... NO.
The way exchanges get rich currently is that they sell / trade cryptos in excess of what they really have. We are about to see a lot of exchanges suddenly explode. Suddenly have a "theft" just like Mt.Gox. And those who do not have their cryptos in their own wallet will find they have nothing.
However, i have a brilliant sollution for you.
An exchange called BitShares.
bitshares.org
They are actually what Blocktrades trades through.
An exchange that has multiple currencies. (including STEEM and SBD)
A cryptocurrency that is used to swap between other cryptos and is a good store itself.
Its only problem is not many traders. So, come, join us.
Blocktrades was discussed in the post. It is an OTC exchange. An OTC exchange will never be able to compete with the volume of a centralized exchange. Unfortunately it will never be large enough to make any difference.
Blocktrades is not BitShares. So, i do not know what you are referring to.
Interesting proposal I hope there are people who support this would be very useful you have my support I hope you join more