Community Tokens it shalleth cometh.

As demand for Steem becomes an extreme presure, this will be a relief.

The liquidity salvation under development.

As you may, or may not know, Steem, as a Token, is more or less capped. New Steem to be created every year, also known as inflation, will be less, it drops by half a percent every year. Currently the Steem amount will grow just below 10 percent in 2017. The total inflation, release of new created Steem, will take about 20 years to complete. From the year 2038 on there will be only a small amount of Steem growth, less than 0,3%. These number are by approximation, so please bare with me on this one. At the beginning of the year 2038 there will be about 585 million Steem available. Of which already 243 Steem are available. Because to get the Steemeconomy going it needed a big share of that capped pie to boost it. Therefore inflation was very high during the first 13 moon cycle, also know as a Steem year. And then it was turned down by more than 90%...

Now, at least 50% of this newly created Steem is stacked into Steem Power {SP}. In reality this is even more, because many accounts choose to use a full Power Up. Also curation {rewards for upvoting posts and replies} is rewarded in Steem Power. And then there is about 10% liquid Steem reserved to create the peg with the US Dollar value, also known as Steem Backed Dollar {SBD}. So, in practice most Steem is locked away in stock as Steem Power. Which pays about 3% dividend annually, just for HODLing Steem Power. (This is added every time the dividend of an account reaches at least 0.001 Steem in value.) Of course there is the Power Down, but for all accounts to use it, it would take three cycles and a quarter moon for all to be changed into liquid Steem. (A Steem moon cycle {SMC} is 4 weeks or 28 days, or 4 payout periods.) There is a small chance that will ever happen. Because HODLing your SP has many advantages. So, a large part of SP that becomes available as Steem will be bought by other accounts, so they can Power Up, for instance.

This has all been constructed in quite a smart way, so that one key issue of the Steem economy works: rotation of value. In an economy where value gets frozen, everything will stop moving and it will colapse in on itself. The way the Steem blockchain was constructed and is developed further almost makes sure that Steem keeps pumping around within the system. Members Power Down, others Power Up, some trade on the internal market, some on external markets. And we post, reply and upvote, block after block, that goes like 3-2-1-DONE! While releasing new Steem with every new block. But over time this slows down, to a point where it is capped around 585 million in 2038. (Do not know if I will be around to witness it, but some of us will.) So, far into the future. But the, about, 243 million new Steem are spread out over 20 years... While new members are at the gates wanting to get in. And they need at least some Steem Power. Just like the witnesses. Also the reward pool needs to be refilled!

Extreme high demand on Steem.

Steem has become a fast growing community, it is succes hit. And this will attract even more attention, that will lead to more registrations. At some point it will market itself through mouth to ear. But, while being active in the world of advertising and marketing, I have also seen succes stories collapse under the weight of its own glory. Fast uncontrolable growth being a reason, although that might sound strange, it can become a burdon that takes a healthy enterprise down into oblivion. Keeping a small conservative focus while business expanded progressively and was in need of spreading jobs. At some point one can only handle the outlines and has to leave details to specialized people. But what does this have to do with the succesfull growth of Steem?

If the amount of new members come in at the current rate, are even gets into higher gear, than the demand for Steem will explode. New accounts need to be filled with a bit of Steem Power {SP}, otherwise they can not post or do anything at all. Just deligating SP is not enough at some point. And how about the bandwidth to interact with the Steem blockchain for new members? Some already find it hard to understand that they need to post easy at first, otherwise they get a notion that tells them they need to slow down. But that bandwidth threshold is there for a reason. And I think it is important to make sure the Steem blockchain does not get flooted with golddigging posts by new members. Who only seem to want to get as much Steem as possible by posting copy-paste rubbish by the dozen. The Steem community can do without that, it is just wasting bandwidth. Bandwidth control needs to stay in place, maybe fine tuned by demand. Yet, at some point demand for new Steem will be way too high...

High demand, high market price?

If a system stops to rotate, like moving around value in and economy, than it does not matter anymore how hight demand was just before that. Still, we, the Steem community, would like for Steem to become 12 USD in value on the cryptos market, right? Therefore the Steemeconomy needs to move on, it needs to keep pumping value around. Also new members need to be able to interact with the blockchain, by upvoting, posting, replying, making transactions, trading, send messages and so on. Also delegating Steem Power has its limit, as it is being used for other purposes that to help newbies also. Bandwidth restrictions need to stay in place, because it is in all of our interest that copy-paste golddigging rubbish is kept out as much as possible. So, if members want to get higher usage bandwidth limits they can buy Steem Power, it is taking a risk for those who want to see results faster. Makes sense, right?

So, the price of Steem is going up, because market demand is putting the pressure on. This makes Steem as a blockchain social media platform, more interesting, but the post and get payed credo, might not be able keep up to its promise anymore. At least not for every new member, even if they could get a small payout after a while. And there comes a time when the amount of Steem available for all the demand is running short and stays that way. Remember there are also exchange accounts that have a high demand. Therefore at some point the Steem blockchain realm needs other liquid value to ease the pressure on Steem, that is more or less capped at about 585 million. How to fix that? So that the Steemeconomy will move on, can keep up with demand, can handle millions of active accounts?

Communities and Tokens.

Because Steem is already too big to be experienced as one coherent community already communities are forming. One of the first that could be noticed were those based on a shared language. Even in Nederland, where I live, we not have small Steem community of Nederish speaking members. And recently in the region I live, Oldambt, a small group is forming. Maybe that one will even post in our own dialect. But this is a pattern that is slowly emerging. People that want to post in their own language, or dialect and know they will probably not be noticed by Legend level accounts. Communities are forming using the first of the 5 possible tags, like nl and so on. Now, all that is needed are tools to handle this better for all Steem members, and that is something in developement.

And it also opens a new opportunity to tackle part of the growing Steem shortage challenge. The solution being that Communities can issue their own Token. These will have the same features as the Steem Token itself. Meaning, they have a pool, that can be spread through upvoting, or sending to accounts with a message attached, and so on and so forth. Steem Community Token {SCT} sceptics stated that this will shatter the Steem community as a whole and hurt the market value of Steem. First of all, the Steem community is still bound together by one blockchain and by the Steem Power in their account. But it is nearly impossible to keep track of the posts of ten members, let alone millions. And not everybody is good in posting in English. So more diversity will add more value to the Steem blockchain. That will create Fruit Of Work {FOW} for everybody.

Also, adding Community Tokens to the Steem realm means that more can become members that can get possible payout again. The amount of Steem will stay the same, inflation of Steem will move on just the same, demand for Steem will still be there. But, thanks to the Community Tokens the growth of Steem can expand. The Steemeconomy can rotate, move on. While the communities will start to create sub-communities, and still demand for Steem will be well within the limits that its ecosystem can handle. Because Steem Community Tokens that have been issued have taken much of the pressure of. While it is still the main exchange Token inside the decentralized Steem realm. Like Bitcoin is in the whole of the cryptos realm, and it still made BTC gain in value. Even with more cryptos being added.

It just is needed for Steem to flurish.

Just like there is a bandwidth limit to secure the Steem blockchain from getting flooded with copy-paste posts by golddiggin accounts, the creation of Steem Community Tokens needs to be restricted. Maybe Steem Power and Reputation should both taken into account and even a rule that at least three different accounts need to give their multi-signature to create a SCT. Payment only through Steem Power, that will benefit new accounts to be able to be created. Bottom line being here that there needs to be quite a challenge for members to be able to issue a Community Token on the Steem blockchain. Otherwise there will be a flood of newly created Community Tokens. There has to be some risk attached for those who really want to issue a new Steem Community Token.

If it is also intertwined with the amount of Steem Power of an account, then that might make it even more interesting for members to Power Up. If they are serious about creating a Community Token. Which will lower the amount of liquid Steem, that will make it more scarse, thus Steem could gain in price. While making the platform even more interesting because of the communities and their own Tokens, that can be traded on the Internal Decentralized market against other SCTs, Steem and Steem Backed Dollar. In a system like the Steem blockchain it is okay that Steem itself is a rare commodity. But that can only work if the Steemeconomy keeps on rolling. And that is where the Steem Community Tokens will come in the game. At least, that is how things look from my point of view...

Have a great one!

That there may be many moons to follow.

Steemd.com screenshot by @oaldamster