Some Implications of @ned’s 100,000 Entrepreneurs

Several times, Hive account@ned has written and spoken about a future when the Steem blockchain has 100,000 entrepreneurs. But in none of those cases have I seen any specificity. Is it just an idle dream akin to him thinking out loud “maybe some day a Brazilian supermodel will play with my hair” or is a vision of some nebulous future or is it an actual goal to be actively worked towards? Because in all the times he’s mentioned it, I’ve seen no timeframe.

What good’s a goal without a deadline? I’ve got a goal of 7,000 Steem Power by the end of 2018. Without a timeframe, it’s just a vague aspiration. And an aspiration that could be attained by doing nothing. After all, we all earn SP simply by holding SP. I’ve got a bit more than 6,300 right now so (unless the Steem blockchain were to go belly-up), it would grow to over 7,000 by 2025 or 2026.

So if Hive account@ned has a goal of 100,000 entrepreneurs, is that within a year, two years, five years? Ten? A hundred?

And what constitutes an entrepreneur? In some sense, all of us active on the Steem blockchain are entrepreneurs. We write posts or upload videos or generate memes or curate others who do so all in the hopes of getting a few drops out of the reward pool. If that’s what Hive account@ned means by entrepreneurs, 100,000 active Steemians is no big deal.

So let’s for the sake of argument say that Hive account@ned (at least in his mind) has some kind of timeframe. Called it a few years. Three? Seven? Wingdoodie?

And let’s assume that by entrepreneurs Hive account@ned means more than simply being an active Steemian and instead means people and companies building their businesses on the Steem blockchain (and often elsewhere) and making enough in the way of profits to provide a full-time income to one or more people. This would include individual entrepreneurs making their living on the Steem blockchain as well as large corporations for whom the Steem blockchain might be only a small part of their business. And let’s assume that, among other things, many of these companies would be issuing SMT’s.

We’ve already seen the early stages of entrepreneurship like this with various DApps, even before the rollout of SMT’s. One thing they all have in common is that they need Steem Power to conduct their business, sometimes quite a bit. And even if they don’t do a lot of upvoting so don’t need the voting capabilities of SP, at a minimum they need Resource Credits. There have been rumblings and rumors about at some point in the future being able to delegate/lease RC and the Voting Power (mana) of SP separately, but remember that the need to lease SP or RC translates into demand for Steem itself. Supply/demand comes into play to move the price of Steem. If entrepreneurs flock to the Steem blockchain in large numbers, their business demand for resource credits and/or mana would likely boost the demand side of the equation significantly.

But the supply side of the equation is far less flexible than the demand side. Any estimate of the demand for Steem is of course a guess. Will the entrepreneurs’ demand for Steem going forward increase by 10% a year or will SMT’s take the world by storm driving entrepreneurial demand at rates that we wouldn’t believe if someone mentioned them? It’s all but impossible to quantify possible future demand.

But it’s eminently possible to quantify future supply.

The formula for determining the current rate of Inflation for the creation of Steem tokens is

(978 - (head_block_number / 250000)) / 100

Go to steemd.com for current head_block_number value. A few minutes ago, it was 26,551,241

(978 - (26551241 / 250000)) / 100 = 8.71795036

So the rate of inflation is a bit over 8.7% and slowly dropping by 0.5% per year.

Right now, the current supply of Steem (liquid Steem + SP +SBD’s that could be converted into Steem) is a bit over 296 million.

And now we come back to the timeframe question that Hive account@ned seems to have not addressed. 100,000 entrepreneurs when? That we don’t know but given what we do know about the demand for Steem that already existing DApps are hinting at, we are looking at potential fireworks.

So let’s pick two timeframes at random. Five years and ten years. Given the current supply of Steem and our ability to predictably calculate its future supply we come up with 428 million Steem five years from now and 552 million Steem ten years from now.

But let’s make the math simple and guesstimate that at a time 7-8 years down the road (Hive account@ned, if you’re reading, how about a timeframe, hint, hint?) there will be 500 million Steem. And, since these guesstimates are idle speculation, let’s assume that there are 100,000 of Hive account@ned’s entrepreneurs going great guns on the Steem blockchain at that point. How much demand would there be for Steem? Even if all Steem were owned by these entrepreneurs, they’d average only 5,000 each. Let that slowly sink in. And reflect that most of the DApps currently up and running have more (either owned or delegated to) than that right now, even before the onset of SMT’s. This suggests that in a 100,000 entrepreneurs scenario, there might be massive demand for SP/RC.

What might that mean for the price of Steem?

Edited to add: I guess I missed the memo, but in the comments below, Hive account@taskmaster4450 says that Hive account@ned has mentioned a five year timeframe.

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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.