This post is a bit of a free write in response to the question asked by @llfarms in this post – What is your vision of STEEM?
Before she posted the question, I was thinking about this and the different user types that we have, but being so busy all the time I didn’t have time to write it all down. Being a free write and still short of time I hope I can get my thoughts across now!!!
Before I begin, steem is many things to many people and there is no right or wrong answers to what steem is or how it should be used.
I’m going to get into a bit of Accounting jargon for a moment but stay with me because this is important for steem and attracting business and enterprises to the blockchain.
Assets are purchased and held by organisations to improve business performance and increase the bottom line. In the accounting world there are many types and classes of assets such as tangible assets, intangible assets, financial assets and inventories. All of which are defined in standards set by regulatory bodies.
In December 2016, the AASB released a paper which examined which class of asset a digital currency should be recorded under. The classification is important to how it is treated for accounting purposes.
The following findings were published
• Under certain conditions Digital currencies can be classified as Inventories
• Digital currencies are nonmonetary assets without physical substances making them Intangible Assets.
These finding were iterated in a 2018 Paper and cited around the globe by Accounting standard setters.
Digital currencies, as Inventory, relates to traders and not important for the context of this article. However, accounting for STEEM as an Intangible asset is a massive selling point for attracting business and enterprises to the blockchain.
Intangible assets include things like the cost of brand recognition, copyrights, trademarks, customer lists, goodwill, even software. Things with value that don’t have physical form. The cost of which goes to the balance sheet and does not affect profit or loss when it is purchases.
As with all assets, the value may go up or down. Generally, with tangible assets, such as machinery, the value goes down (due to usage). However, with intangible assets, the resale value may go up or down. As the value of steem can be measured on exchanges, the balance sheet value would be adjusted to market value on an annual basis. There may be a gain, their may be a loss.
Holding steem hoping there is a gain is speculation. When a company buys an established trademark or a brand, they do so to increase market share and revenue. They don’t buy it with the hope that value of the trademark or brand will increase, instead they want to use the awareness, the success, the unique selling points, that existing trademark or brand has, to push their own sales forward.
The mindset around cryptocurrency is often trading and speculation and this is clouding the facts that steem is like any other intangible assets.
Meet Jane
Jane is a Fashion blogger and with 10K followers. She has monetized her blog with an Amazon shop however the market is competitive and although she is getting good traffic her bounce rate is high and lead generation is low. Jane has studied here sales funnel. Once people sign up to her newsletter her conversion rate is 60%, however less than 1% of visitors sign up in the first place.
After looking at competitors Jane noticed lack of engagement on her site over others. Engagement is an important part of the sales funnel as it allows trust and relationships to be established. Although her blog posts are widely shared, there is little or no interaction.
Jane is willing to invest $10K to improve her situation.
Right now $10K would get Jane around 23K Steem Power, giving her around 0.58 stu on a 100% vote. By using tools such as Steempress, Jane could allow her readers to leave comments on her blog which can be rewarded with upvotes. A perfect reason for her followers to want to engage. This engagement will build trust and relationships and in turn increase sign ups. She is hoping to increase her signups by 3%. Based on currently levels this would increase her sales by $6K per year. that would be a payback of less than 2 years on her STEEM investment.
STEEM as an asset can be used like other assets to increase sales. My vision of STEEM is of a blockchain for enterprises of all sizes, from the small website owner to the large corporate. There are thousands of businesses out there just like Jane and bigger. We have a blockchain that is scalable and has 0 transaction fees and continuously evolving.
What’s holding us back is the perception of cryptocurrency as a speculative investment over the understanding that it is an asset like many others.