For a Noob like me it’s very confusing as I know nothing of wallets, tokens, ETH or blockchain.
I’ve sold shares in the past with no need to deposit the fees in advance. The postage stamp is a good analogy though.
Just been reading this > Best way to exchange STORJ with BTC and ETH each month?
All told it sounds like an initial small payment in ETH would be very helpful.
If I work with a stock broker, I’d need to pay a fee of some sort… whether in advance or not. However, the Ethereum blockchain transaction fees aren’t really the same sort of thing. The payment is for the transaction to be recorded in a block. It doesn’t go to Storj and is not levied by Storj. They have to pay the same fees to pay SNOs. And the fee needs to be paid in the native coin of the blockchain… which is ETH.
Understood, no problem with fees it’s just the bizarre way it seems to work.
To me its like when I want holiday money, I have GBP and I want to buy Peso … no problem that will cost me a fee but the fee has to be paid in advance in Peso and I have no Pose… head spins
But you can buy Pesos at a bank terminal… for a fee.
Just like you can buy ETH at a crypto exchange… for a fee.
Since you indicated GBP:
But this purchase comes with a KYC requirement and a bank account held in your KYC-ed name. Many people don’t like this idea - including me. However, it’s the way of the world as we know it.
it is more like you are in the EU and want trasfer GBP to your home, then you cant pay trasfer fee in GBP, you need Eur, this is the same.
Storj company would need to buy ETH before they can pay in ETH right? 
Instead they generated storj tokens for free (tokens don’t require mining) and have enormous amounts locked out. They are releasing them over time as payments to SNO and also selling them to customers so they can exchange tokens for service.
They probably sell them to pay for operations services, rent, maybe as salary to employees as well? But they never have or had to pay for these tokens. I guess that’s a good reason not to use ETH … well for Storj it is.
I do not agree.
Storj sold tokens to investors who wanted to buy them via an ICO:
Since that time, Storj has been working on a product. Work costs something. Who has been paying them?
If Storj is paying employees in STORJ, then those employees are being paid via the value transferred during the ICO.
With what exactly? I can agree with what you said but it doesn’t cancel the fact that Storj would need to buy ETH to pay them to SNO which would be more expensive then 0.
They could sell tokens to buy ETH but that would drive token price down I think because it would increase supply. Wouldn’t last long. Token price derives from supply and demand, not from work costs behind it. I’d be happy to hear that the demand is much higher than what all SNO receive/hold so that it’s not significant for current storj price. I’m not sure where to start to confirm this so would be grateful if somebody proves me wrong and I would also buy some more storj tokens.
While this is an unusual financial model I don’t think it’s flawed. All I’m saying is that with this model paying SNO with tokens rather then ETH is better for Storj … well that’s my understanding at least.
I’ve gone back and forth with this idea myself…
However, after experimenting with crypto for awhile there’s a problem with the idea that token supply and demand drive the price of any given ERC-20 token.
The problem is liquidity. Some may argue that the crypto market has a liquidity problem… meaning that crypto can not easily be used to buy tangible items without affecting the market price of the token.
You referred to that via your sentence… “They could sell tokens… but would drive token price down”
But… STORJ can be exchanged for other tokens as well as ETH or even wBTC tied to BTC. So, STORJ… like any ERC-20 token… has liquidity across the blockchain and even across chains via wrapped tokens pegged to other assets as well as the US Dollar.
If I’m willing to pay a few dollars in exchange fees, I can sell STORJ and then buy some later. So, there’s not really any incentive for anyone to HODL any particular ERC-20 token for more than a few weeks as prices rise and then the tokens can be exchanged…
So, the only things driving market demand for any ERC-20 token are the ability to purchase something with that particular token or the hope that price rises (speculation). But the price rising can’t be driven higher forever by speculation alone… eventually something has to be produced and sold that requires that particular ERC-20 token… otherwise it’s just tulips.
Storj is producing a product. That product is for sale on the market. One can pay for that service with a particular ERC-20 token if one wishes. So, there’s something tangible going on here. And there’s supply and demand… but I don’t think in the way you meant it.
At the moment, my guess is that many tokens are rising in price as the cost to exchange tokens is extremely high. But that will change… and, my guess is, that when fees drop… token prices will drop as well until some equilibrium point where token value is somewhat correlated to blockchain-liquidity based demand.
However… walls of text and ideas have been known to come apart fairly easy.
That’s a really nice review thanks.
A good point about liquidity, I believe it works exactly the way you describe when majority of the tokes are traded in exchange for the service behind the token. But I don’t think we’re there yet, or at least I’m not too confident about it, would need to do a proper research.
The fact that SNO are paid in STORJ tokens, what role does it play in forming the current token price in your opinion?
In my not-expert opinion… which may be entirely wrong… I would surmise that payments to SNOs in STORJ does not – in itself – change the market price of the STORJ token. The payments don’t produce demand for STORJ. It’s what the SNOs do with their tokens and what products are available which require STORJ that matters.
In your GBP to Peso example, you left out an important instant conversion scenario via credit/debit card processors. If I’m in a foreign country, I don’t need to worry about exchanging my national currency if I use plastic… err… electronic payments.
Rambling I guess…
The point is:
Which is heavier, a pound of feathers or a pound of gold?
Think fast!
When asked quickly, most people think for a few seconds… and then answer… “a pound of gold”
Gas prices dropping… and STORJ price as well:
https://coinmarketcap.com/currencies/storj/
From the graph… the velocity of STORJ slowed to a standstill during the high gas price surge. And now, the velocity is increasing and the price is dropping. Maybe it’s evidence of some partial truth. Maybe not.
Tulips were a big thing for 85 years until they weren’t. I don’t think crypto, as an idea is a tulip craze, but I do think individual ERC-20 token pricing for contracts without a product are tulip territory.
I want to add this link to the discussion as it might get not noticed in the other thread: ETH transaction fees to the moon
Its nothing new this write up covers the history of payment in scrip
https://www.investopedia.com/terms/s/scrip.asp
storj by using their own scrip has had to raise less capital to operate as it is able to retain any $ funds it receives for other requirement, while paying node operators in scrip that it itself has created.
So there is a major advantage by operating this way for the cash flow over say purchasing ETH in the market place and then paying node operators with this. This type of process is also necessary as making direct $ payments to a global community of node operators would be very complicated and costly.
As for how to value any cryptocurrency - who knows I for one don’t as I though bitcoins were a waste of money when they hit 20c. The whole thing seems to be irrational to me as while something like bitcoin get compared to gold due to the available number of coins is limited, unlike gold their can be an infinite number of different cryptocurrencies released. So at the end of the day cryptocurrencies are just worth what the buyer will pay for them.
Seems about right to me, but if you think about it any currency is the same. Someone hands you a £10 note, it’s only a piece of paper and yet we give it value.
Very true, the only real difference is that governments and central banks have a range of legal ways to manipulate the value of currencies they issues/manage.
A post was merged into an existing topic: What can i do with the storj tokens?