Which do you think generates more money: a business set up next to an interstate or the tolls collected from said highway?
The obvious answer is the tolls collected. By taking a small amount from each car that passes through, states make a fortune while individual business success can vary.
Of late, I wrote a number of posts about the value of STEEM and how it can achieve some pretty substantial numbers. I even got compared to 
The difference between a success and failure is not opportunity. Everyone has opportunities in their lives. The difference is those who succeed understand what they have in front of them AND take the action to take advantage of that opportunity. Naturally, those who missed it will spout some garbage about that person being lucky.
So why did I write F**K Steemit in my title? Logic might lead you to think that I am down on Steemit which I am not. In fact, I am very optimistic about the prospects of this app and the things the development team are doing. That said, Steemit is a business on the highway. Businesses succeed and fail all the time. When it comes to STEEM, Steemit has little impact.
The success STEEM is derived from the traffic. The steem blockchain is the road and STEEM is the toll money collected. Hence, owning STEEM enables you to own a piece of the highway, not a business located on that road. Do you see how much of a difference this makes.
Smart Media Tokens (SMTs) were introduced without much fanfare and glossed over by most. In fact, I read some commenting how the development team was ensuring failure of Steemit because they were off on the wild goose chase of SMTs which meant the death of STEEM. This is 1000% incorrect. To start, as we see, the development team is not overlooking STEEMIT as the last update proved. Secondly, from what I could garner, if the development team is only going to focus upon one area, make it SMTs.
We hear a lot about how Bitcoin is going to fail because it has high fees. Certainly that is a debate for another post. However, have you noticed that STEEM has no transaction fees. People can transfer STEEM in any amount for free. How can this occur? Does the steem blockchain have the same requirements of computing power, energy, and other inputs to make the blockchain keep going? Of course it does. Since that is the case, how does the system operate?
The answer to that is the highway. This is what makes it unique. Transactions on the steem blockchain are based upon bandwidth. This is something that is rarely talked about on here. However, if you look up your account on steemd.com/@yourusername, you will see bandwidth located right under voting power. I am sure many of you saw this and did not even give it a thought. Yet that is the value of STEEM in a nutshell.
This blockchain is built upon each account having a certain amount of bandwidth tied to the amount of SP that individual has. Over the past 12-18 months, from what I can understand, this system has been finely tuned to ensure transactions are priced effectively. Mispricing the bandwidth each user has could mean that some individuals would be "charged" for their usage like upvoting or commenting which, obviously, is a non-starter.
So how is this going to make you a fortune? It isn't...yet.
This brings us to Smart Media Tokens (SMTs), those items that were introduced yet few paid any attention. SMTs are the golden nugget because it made steem into a "specialized etherium". Anyone who watched the cryptocurrency market over the past year knows that ETH went from $6 to, now closing in on $500. Much of this was the result of the ICO craze that took place in the last year. SMTs give steem the same ability but on steroids.
Notice I used the term "specialized" in the preceding paragraph. Etherium is a general blockchain that is not designed to cater to any particular entity. Anyone can establish a token on there using the ERC20 token standard. However, anything after that requires programming to personalize the system to operate how the token creator specifies.
Contrast this with the SMTs. The steem blockchain is specialized. It is not general. When someone creates a token on steem, they find the curation system is native. There is no additional programming required to establish a database to handle this. The upvoting/commenting/posting system is already contained in the platform. Therefore, anyone who has these applications present on his/her site can turn to steem for a "turn key" system.
Now do you see how STEEM will make you a fortune? Of course not because this is nothing more than interesting information. The reason I mention it is to highlight the attractiveness of using the SMT protocol by content sites. In fact, if one wanted to streamline it even more, there is a widget that can be used with Disques which is one of the most commonly used commenting plugins. This allows a site to provide an instant reward system for their followers using STEEM as the basis. Again, nice information but hardly earth shattering.
The SMT program requires every entity that is going to create a token to purchase at least $1 worth of STEEM. This is done in an effort to prevent spammers. Beyond this, new token creators are going to want to purchase more to create an underlying value for their token, at least initially. Over time, they might decide to dump the STEEM as the newly created token takes on its own value. While many view this as a negative, it is really a zero sum game at worst. To start, not all will dump STEEM but, instead, opt to hold onto it for appreciation purposes. Trust me when I tell you that if I can figure this out, so can many of those creating their own tokens. STEEM will have more value as the network effect really takes hold.
Nevertheless, we will presume that a token creator will sell the initial STEEM as soon the newly created token can stand on its own. Does that mean that STEEM fails to benefit? Not at all. One of the things that makes an asset attractive is liquidity. To get this, one needs a forum where people can put their hands on it. How does a newly created token have liquidity, especially if the early adopters believe in it and decide to hold on for higher prices? The answer to this is in the pairing. Every token created using the SMT protocol is paired with STEEM. Hence, the liquidity comes from STEEM while also providing a decentralized exchange for the new tokens. In other words, there is always a place to sell the tokens. All tokens can be converted into STEEM at a price that is set by the market. In this regard, STEEM can be thought of as the reserve currency.
Excited yet? Don't be.
It is not assured that anyone will want to sell their token (although highly unlikely). Therefore, this aspect might not do a ton to the price of STEEM. That said, there is something that will guarantee to affect the desire for STEEM as more tokens are created and people are using the curation system. That something is activity. As more activity takes place on the steem blockchain the need for STEEM is GUARANTEED to increase. This is true no matter whether the token is backed by someone holding STEEM or stands on its own. This is where the fortune is to be made.
The reason is as follows:
Activity require bandwidth and.....
BANDWIDTH IS PRICED ONLY IN STEEM!!!!
Read that again.
BANDWIDTH IS PRICED ONLY IN STEEM!!!
But don't take my word for it.....
With the advent of SMTs, there is a growing demand for users to hold STEEM, because users need to increasingly hold STEEM in order to participate, consume, and use Steem services at a rate maximally commensurate with their growing potentials in respective SMT ecosystems. Put simply, as power users are growing their earning potential in SMT communities, they need more STEEM to achieve the bandwidth allowance needed to perform at their highest possible rate of return in the SMT ecosystem.
This is found on page 56 of the SMT Whitepaper.
There it is: Bandwidth is the highway and STEEM is the currency for the toll. Right now, we are nothing more than a country road with a few cars passing a day. However, get a couple of sites to sign on that have followings of a couple hundred thousand, or even millions, and you will see steem go from a country road to a major interstate. Any traffic is going to require STEEM to ensure they can continue on their journey.
Now you can get excited.
If you found this post informative and helpful, give it an upvote and resteem.
Pictures by google images