The other day I posted about the difference between Steem-Engine and SMTs. There are some fundamental differences that I tried to highlight.
Along the same lines, I saw an interesting article.
We all know about the potential of Facebook launching that token that instantly has millions of transactions simply due to the size of its user base. This is a powerful introduction as evidenced by the blow back from the bankers and regulators.
Some feel that the Libra is a threat to the central banks and could take over as the reserve currency.
As big as this is, what if I told you it is only 10% of the total marketplace? In other words, Facebook is only going after a small sliver of the entire pie by trying to be a currency.
Enter Google and the attempt to go after the other 90%.
Most want to focus upon cryptocurrency but the true potential is blockchain. Pushing crypto to the top is akin to saying that email is the Internet. It is only one application.
Google recently teamed up with Chainlink. The reasoning behind it is to create those applications and platforms that can take over the rest outside cryptocurrency. In the financial arena, derivatives alone are worth more than a quadrillion dollars.
The key is to focus upon enterprise. There is a lot of data out there that is outside the blockchain. Google aims to access this while merging the two through their applications. This is remarkably different from what Facebook is trying to accomplish.
When I look at Steem-Engine, I see where it is expanding. This applications, through a sidechain, offers smart contract ability. It is here where we see the difference. This provided businesses and industries with the ability to contour the blockchain to what they need. By pulling in data from outside the blockchain, we see the ability to blend the two for a more powerful system. In other words, this could be huge for the business world.
Naturally, the traditional tech companies look at things through their view of control. Many question the centralization of Chainlink and the fact the project does not even mention how it plans to decentralize. The alliance with Google could make that less likely.
The part where Steem-Engine is centralized is because it is so new. There are plans to expand the nodes to make the system more decentralized. Like everything, new projects take time. The back end is already open source allowing anyone to tap into it. Front ends can be created just like they can on Steem. Over time, I would expect, as the chain grows, more decentralization.
Did you notice this tab on the Steem-Engine site? Click on it takes you to this screen.
The page you arrive at obviously is to set up a token. So what? How is this much different?
To answer that, we must clarify some things.
STO stands for Security Token Offering. When a company (or individual) designs a token to use to raise funds, according to the SEC, it is a security. This is being disputed by many yet it is the stance of the SEC at this time. Hence, it needs to be done properly or face action for that entity. Many of the 2017 ICOs are at risk of being slapped by this powerful organization for this exact reason.
This differs, however, when people use the term "Security Token". Typically, they are not referring to a token that is created for utility. Instead, it commonly applies to those assets which are traditionally defined as securities. Those would be stocks, bonds, and derivatives (paper) against assets such as commodities, real estate, and art.
How big are these markets? Exact numbers are hard to come by but just doing some simple web searches, here is what was thrown out there.
Stock market $27 TRILLION traded
Bond market $38.5 TRILLION traded
Derivatives Estimated to be between $1 QUADRILLION and $1.25 QUADRILLION.
Real Estate $200+ TRILLION
https://www.fool.com/investing/2018/03/11/how-big-is-the-stock-market.aspx
Notice these markets jumped right over the billions level.
The United States Fed states there is somewhere around $1.5T dollars in circulation, by far the largest single currency. Nobody is for sure how much money and money equivalent is out there but some place it around $80T.
My point is the securities market is much bigger than the currency market. Thus, when looking at the benefits, it is hard to imagine that everything will not be tokenized. This is especially true for those assets that are in physical form such as real estate.
Steem-Engine can tap into some of this. While I would not expect a Fortune 500 company to tokenize on there, we can see millions of other use cases where this could work. What about the local plumbing company where the owner would like to divest some interest in the business? This is ideal for Steem-Engine. Smart contract capability enables this.
While Steem-Engine is a side chain, all transactions there are broadcast down to Steem using JSON. This provides a public record of all transactions on Steem, code that is there yet ignored by Steem since the code doesn't tell it to do anything.
When talking about blockchains, one of the things people look at are number of transactions. A few large enterprises create tokens on there and you could see millions of transactions just from that.
There is some talk of late about the transformation of Steem from a blockchain that attracts content creators to one that is appealing to businesses. Here we see one example of what is being offered.
This is the transition and evolution of Steem. I am adding to my Steem Engine (ENG) holdings each day. Little by little I hope to amass a decent stake in that token. The total distribution, at the moment, is around 4M. While the inflation has not been finalized yet, it expect it to be in line with some of the others out of that group such as PALnet.
Either way, this is a platform that can really add to the Steem ecosystem.
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