The announcement by Steemit CEO Ned Scott of the soon to be released Smart Media Tokens (SMT) has the potential to change the way people interact on the internet.
The Smart Media Tokens will enable publishers to create tokens that help monetize content and grow online communities. Tokens enable publishers to create a mutually beneficial community-based economic incentive to drive platform growth.
This is very good news and should create even more value for Steem holders as in unfolds.
What are Smart Media Tokens?
According to the whitepaper released by Steemit
- A Smart Media Token (SMT) is a native digital asset on the Steem blockchain that can be quickly launched by anyone to help monetize online content and create incentives to encourage desired user behavior.
- They're like Ethereum's ERC-20 tokens, but with certain built-in ‘Proof-of-Brain’ properties and a token distribution reward system designed specifically for digital content businesses. credit
An introduction to the SMT white paper reads:
Steem’s Smart Media Tokens (SMTs) give anyone the power to launch and sell Proof-ofBrain
tokens, which are tokens distributed by “upvote” and “like”-based algorithms
and can be integrated with websites to align incentives and spur growth, while websites are
empowered to adopt sustainable, currency-centric revenue models. This model has been
tested and continues to be proven by steemit.com, busy.org, chainbb.com, dsound.audio,
dtube.video and other Steem interfaces, which are monetizing content, tokens and media
in a way never before seen.Several popular token protocols, such as Ethereum’s ERC-20, allow you to create and
launch arbitrary tokens, but no protocol enables content businesses to leverage those tokens
by aligning incentives between users and applications. Due to suboptimal transaction
cost structures that incur fees for basic actions such as voting or posting, misalignment
of interests between meta and core tokens that aren’t built for influencing distributions
based on Proof-of-Brain, private key hierarchies that don’t cater to social versus financial
operations, and slow transaction speeds that are out of sync with real-time websites - none
of these protocols could ever provide an acceptable user experience for content websites,
such as Twitter, Reddit (even subreddits) or The New York Times.For content websites and tokens, incentive alignment between websites and users comes
from a steady, as well as decentralized and mathematically guaranteed, release of new
tokens, and incentives that must be allocated to the users - including bloggers, vloggers,
commenters and curators. The distribution of new tokens occurs based on stake-weighted
voting to prevent gaming and eliminate the need for a counterparty. Quality user experience
comes from tokens that can be transacted safely (through separate private keys for
distinct sets of actions), without fees, and at real-time speeds. Further incentive alignment
comes from a company’s ability to raise capital in ICOs. All Smart Media Tokens
have built-in ICO support, should the issuer wish to launch one. From the White paper by Ned Scott and the Steemit Team
Essentially any website will be able to work very much as Steemit does, rewarding content creators and those who add comments or upvotes (likes) to a post.
For example, a WordPress site will be able to add a plugin similar to Disqus to their existing site and have the same functions as Steemit does on their site.
This helps incentivize their online communities to engage more with the website's content and rewards them for contributing without the website owner having to know anything about cryptocurrencies or having to deal with security issues.
The system will run on the Steemit blockchain and can be based on Steem which will increase the value of Steem itself.
Imagine what would happen to the price of Steem if sites like the Wall Street Journal (which is a WordPress site by the way) added this function to its website.
Website publishers can also create their own altcoin associated with their sites and either distribute them to the people interacting and contributing to their site or sell them to raise money for their business or cause.
You will be able to create your own coin and launch your own ICO (Initial Coin Offering) to raise capital for profit and development of your business or non-profit causes.
Yes, these are very exciting times and the future looks very Steemy indeed. Keep in mind that this is still in development but when it does launch it has the potential to change the internet as we know it and revolutionize advertising.
My Future's So Bright I Got To Buy Steem
Why am I so excited about this new development and why you should be too?
As more sites begin to incorporate these Steem-like functions the demand for Steem will increase and where there is more demand the price of Steem will rise. If you're holding Steem this is good for you.
Even if sites create their own coin it is still based on and backed by Steem and its blockchain so they will need Steem to fund it. This creates demand for Steem.
Also, there will be more sites engaging their users just like Steemit does to create more value for all websites using these functions.
According to Alexa.com, a site that ranks the poplarity of websites on the internet, Steemit.com is the 2,128th most popular site worldwide and ranks 1,458 in the U.S. Not bad for a site just over a year old and still in beta.
Bringing the same abilities to any site on the internet while having it all tied to the Steem blockchain will not only help bring cryptocurrencies to the masses, it will revolutionize the internet.
Turning The Advertising Model On Its Head
Advertising has spent billions of dollars to grab our attention because our attention is valuable. We are bombarded with advertising everywhere we go and the internet in no different.
How many times have you been annoyed with internet ads invading your space while you're searching for something online?
A whole industry has been built on internet advertising and at the same time another industry has been built on removing ads from our view. Pop-up blockers, spam mail blockers, and a whole host of plugins and apps to dodge the constant deluge of advertisements from interfering with our online experience have been sold to us.
All of these ads are designed to push us into taking some sort of action that results in a sale for those companies paying for our attention.
Steemit has never advertised anything to us. Other than the first email we received when signing up, they have never asked us to buy Steem, check out any other website, or anything else from them or anyone.
Yet we engage with the website daily and it has our focused attention.
Why? Because we are incentivized to do so with the rewards to be gained by interacting with the site and its users' content. There is a reward to be gained for being part of this community.
Instead of pushing us into engaging with the site with the use of ads it pulls us into voluntarily interacting with the site by rewarding us to do so. That is a very unique approach to grabbing our attention and keeping us involved.
To date, it is the only site of its kind and a proven business model that works or it would not be as popular as it is.
Now imagine if this same proven business model based on pulling our attention were to spread across more platforms across the internet. This is what we are talking about here.
Smart Media Tokens will create more online communities that will not have to rely on advertising to monetize their sites and will attract genuine user engagement within those sites because people will be attracted to the rewards to be gained for contributing to those communities.
The possibilities this opens are limitless for online businesses, content creators, applications, non-profit organizations, crowd funding projects and the users it attracts.
Endless Possibilities
Let's look at a few examples this could be applied to.
Example 1:
Imaging you have a very popular restaurant and a website behind it. You want more loyal customers to spread the word about how wonderful your restaurant is.
You add a plugin to your website that adds Steem-like capabilities to the site. You buy some Steem to give your restaurant Steem Power and let your customers know that they can be rewarded for a positive review of your restaurant.
A customer comes in and enjoys a great meal in your restaurant. They later go to your website and leave a positive review. The restaurant owner, who had invested in Steem instead of traditional advertising, upvotes the comment their customer added to their site and the customer gets a reward of Steem for leaving a good comment.
From the customers point of view they basically got a rebate for choosing to eat in your restaurant and give it a positive review. They may even resteem your site letting their followers know about you in a positive light giving you good word of mouth advertising.
You, as the restaurant owner still have your Steem Power and the "rebate" you gave the customer cost you nothing besides the original investment in Steem Power, which you still have.
If you were to invest the same amount of money in advertising that money would be gone and the results from your investment would be questionable. Even if your advertising budget was worth the money spent you would still have to invest more money to advertise again.
If instead, you invested again in more Steem Power, the effect of your budget would increase and you could offer that same or new customer and even larger rebate with your upvote of their positive review. Your marketing dollars would have a cumulative effect over time.
You would even get a return on it as you created content for your site and your followers upvoted your content. This is a much more effective allocation of your marketing budget than throwing it away on traditional advertising.
If at some point you needed some cash you could power down and get some of the money you invested in advertising back! There is no other marketing model that exists today that does that.
Example 2:
Imagine you're an organic farmer that wants to grow wholesome, organic food for your community using a CSA (Community Sponsored Agriculture) model.
You have a website and launch your own coin called FOOD. The community buys FOOD coins at the beginning of the year for the food they will buy from you throughout the season.
You now have the funds needed to grow the food and you know how many people are going to buy from you this year.
You grow the food and as people come to your farm and pick it up they spend the FOOD coins they purchased until they have used all their coins.
As a farmer, you have the funds you need to buy supplies and labor to produce the food at the start of the season. At the end of the season you have sold all your produce and only grew what you know will be bought.
You also have all the coins back and if people did not return to pick up the produce you still got paid to produce it.
You could also compensate workers on your farm with FOOD coins instead of fiat further reducing your labor costs and avoiding income taxes.
You could also network with other local farms to entice them to use FOOD coins potentially increasing the value of the FOOD coins and still have all the benefits of mentioned in the restaurant example given above.
Example 3:
You are an inventor that has great idea but need funding to bring it to fruition.
You create a website and a new coin that investors can purchase to fund the development of your idea. You divide the profits based on the amount each investor contributed.
Using some of the funds raised you create your invention and bring it to market. Smart contracts divide the profits among the investors and as they cash out the coins are returned to you essentially getting the value of those investments back.
You still have all the other benefits mentioned above and can sidestep some of the legalities of funding your invention.
Example 4:
You own a bed and breakfast business and you want your guests to create more positive reviews on Travelocity.com
You add the Steem-like functions on your website and invest in some Steem Power. As guests come stay with you they are incentivized to give a good review of your establishment on Travelocity.
They add a good review and then copy and paste it on your own website with a link to the review they left of Travelocity.
You upvote their comment on your site essentially giving them a rebate for adding good comment on Travelocity. Your rankings climb up the search engine results and you get more business while still retaining the money you spend "advertising".
Example 5:
You're a yoga instructor (or massage therapist or English teacher or music tutor) and you want to sell memberships to your class.
They buy your YOGA coin up front at a discount for the next 20 classes you are offering. When they show up for the class they spend x-number of coins per class.
You get paid for all the classes up front even if they don't show up. They get a discount and can use whatever coins they still have left over for the next season of classes you offer or they can give them to someone else so you get paid either way and get new referrals.
Good reviews from your students on your website are rewarded with upvotes on their comments which acts as a rebate to your students and incentivizes them to refer business to you.
As you can see, the possibilities of how to use Smart Media Tokens are endless and limited only by your imagination.
As more and more websites begin to incorporate these abilities into their websites the value of Steem will increase.
Aren't you glad you got involved with Steemit while it is still in beta?
What ideas can you think of to make use of the new functionality of bringing reward based interactions to the internet?
How would you use this technology or how would you like to see it used?
Videos About Smart Media Tokens
Why create Smart Media Tokens?
How Smart Media Tokens Work: An Animated Explanation
Steemit CEO Ned Scott Announces Steem Smart Media Tokens!
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