Why does Storj use the STORJ token?

excuse me…

if access to the tardigrade / storj network is bought by storj tokens, and storj tokens are only paid out to SNO’s for supplying distributed bandwidth and capacity, then if SNO’s didn’t sell off their tokens nobody would get access to the network… but lets be fair thats unrealistic, but in theory possible and that should be accounted for in the structure of the a financial ecosystem.

without such a cycle the token would essentially be meaningless and most likely end up being worthless.

maybe supply and demand could save it… but if storj sells network storage / access for cash, then …O.o then the token is simply a promissory note without any commitment, unless if storj want to do some sort of buyback program… which well lets face it … they got what… like 400million of the damn things already… i forget the xact number.

Storj pays SNOs in STORJ … so, if eventually the token becomes scarce, Storj will need to buy STORJ tokens from the market to pay SNOs…

However, it doesn’t matter what each token is worth, because SNOs get paid in constant USD valuation.

So, if 1.0 STORJ = $100.00 … then an SNO might get paid 0.003 STORJ rather than 10,000 STORJ .

But the SNO payment will always be in STORJ, because the payment system itself is so incredibly inexpensive to use… beyond any other considerations.

2 Likes

and you are right…
which is a good thing.
however it’s just or could become a very long prospect and gamble for SNO’s then, depending on how quickly Storj unlocks their vast amounts of tokens.

i’m also just trying to form a understanding of exactly, how the final ecosystem would look and what consideration i should take along the way, before we reach that final state…

There’s no risk of devaluation to the SNO, since the SNO will always be paid in USD valuation. If a particular SNO holds onto the tokens for months on end, then the SNO is taking an investment risk in the tokens. However, there’s nothing to prevent an SNO from immediately (as soon as the payment has been processed by the blockchain) exchanging STORJ for whatever currency is desirable to that individual.

If Storj were to dump all their tokens at once, there would probably be some sort of class action lawsuit in the near term about market manipulation. I don’t think there’s any problem with the current payment situation or architecture. The payment system is orders of magnitude cheaper than any other common method. And the individual token value is not an important component of the payment system, except in the calculation of the number of tokens paid.

It’s possible to use other tokens as payment, but there are really no positive reasons to switch. There are multiple methods for SNOs to cheaply exchange their STORJ on the open markets, and Storj can give a discount on customer payments because they avoid needing to externally process payment in STORJ.

3 Likes

You hit it on the money with this, I dont think storj needs to change anything with there payout and they are not going to just dump all of there tokens cause there would be for sure a lawsuit, Storj isnt gonna pull a “Bit-connect” Storj is a legit business and Im pretty sure they dont want to put it in jeopardy.
Nothing is stopping us from converting all of our funds to something else right after we are paid.

1 Like

well the whole idea with the rolling lock is to control when they can be used and so that SNO’s and others can feel safe holding the tokens with reasonable safety (if there is such a thing in crypto :slight_smile:
i mean if SNO were to chose the other action of holding on to the token…
i’m all for that the payout is a dollar value payed out in storj…

but i’m just not sure how well the ride getting to the final ecosystem flow will be…
if we immediately sell all our tokens upon getting them, they will continually fall unless the demand for the service explodes and even then SNO’s and Storj opinion of what the token is worth controls the price, and again the token supply Storj has is also in their future interest to make more valuable rather than depreciate them… because then they like, SNO’s can sell them to the market in exchange for more people and or better gear to make the network even more appericiated.

i wouldn’t pretend to really understand this stuff in depth and really with crypto being the age that it is, it’s doubtful anyone in 100 years will look back and say they really understood crypto back tho…
i know people can be quite sensitive to critic, so lets just call what i have genuine interest in what the future holds for Storj, SNO’s and the Storj token and how to improve the future that we are laying course for…

there can be no doubt that to greatly change the present takes very little change in the past, something which also applies to the future, any change can be of exponential nature, even with the best laid plans things go wrong.

which is why i prefer to understand the nuances / primary elements so i can apply logical deduction to predict outcomes.

initially this started out as a discussion about adding a minute amount of ETH in payments so that people could move their storj tokens into other currencies without having to buy ETH first.
which is a quite sensible thing…

but then i started asking questions about the backing of the storj token and it just got copy pasted into this previously existing old conv, and without any real answers… but whatever i’m sure ill figure it out…

i just don’t see a reason to hold the Tokens which as far as i can tell would essentially depreciate Storj’s assets, and thus damage my own stake in this venture… and on top of that i would be selling the tokens cheap… :smiley:
but maybe thats just me… i don’t want to shoot myself in the foot…

a month ago token was a 0.14 Euro in price, then 0.13, today it is 0.1 euro in price.
So holding this noken is expencive, I exchanged rewards as got them, and today i see that i made good desision, because i would get lower price fot them today.

1 Like

i don’t really have any of significance yet… so :smiley: no real loss there… but for the future it would be nice to have an idea about what is wise… but yeah looks like i might just sell… ofc i would suspect that on the other end storj is buying them back up … lol

if they keep dropping in value they could live off that alone lol

This is a packed paragraph with many different ideas. Let’s unpack it…

  1. Holding tokens (of any sort)
  2. Flow of financial instruments
  3. Investment in an organization
  4. Opportunity Cost and FOMO

All these ideas need to be unpacked and discussed separately. They are not necessarily all tied together…


HODLing

Definition: Maintaining a large amount of some crypto token in the hopes of the token value rising exponentially… aka Mooning.

HODLing is possible with any coin or token. It is generally a very risky as an investment strategy since most tokens have extreme volatility and almost universally decline in value after an initial burst of FOMO (fear of missing out) purchases by the general crypto public.


Flow of Crypto

Many tokens have a discrete supply set at the time of token contract creation. The tokens are generally offered for sale to investors at a certain price based upon expected market demand of the tokens. This set price is a tricky variable to set correctly. But for the most part, it seems to be loosely based on the amount of cash the organization wishes to raise.

However, it should probably more correctly set on the expected revenue of the company set against the amount of cash needed to develop the platform or product. The long term price of the token will be based on the long term incoming revenue after product/platform release… because basic “economics”.

The flow of the token starts from token creation to ICO to HODLers to exchanges to end-users or SNOs as appropriate… but the valuation of the token is only loosely set by the velocity of the tokens. It’s really based on the revenue of the organization set against the number of tokens in circulation. The fastest way to increase the price of a token is to burn it… aka sending a lot of them to a 0x00000 address. This takes those tokens out of circulation and increases the value of the remaining tokens…

However… if an organization is not bringing in expected revenues, the price may not rise.


Investment in an organization

In the crypto world, this would be accomplished through purchase of large amounts of tokens during the ICO sale… typical purchases are minimum $10,000 USD of tokens. But the tokens themselves don’t give anyone a particular share in the organization in any legal sense. And after the original ICO, purchases of the token from an exchange do not support the organization at all… that purchase would be a HODLer purchase… aka investment in the token not in the company.


Opportunity Cost and FOMO

One only has limited time/money/assets/knowledge and so forth. One can not do everything at the same time. So, one must choose to do something rather than something else.

If I spend my money on purchasing STORJ tokens, I will have less money to purchase BTC. But, I may believe that STORJ will rise from $0.10 to $1.00 in 6 months, so my FOMO mind set will lead me to purchase $200.00 in STORJ at an exchange hoping for a nice $2,000.00 6 months from now.


All four of these things are separate issues and all of them are independent of the title of this thread.

Dont know about holding, but 2-3 months ago STORJ was 0.14$ in price, today it is 0.1$ , so price reduction is present.

The entire crypto market fell and rose dramatically in the last 60 days.

It’s the way it is in crypto… unless you are dealing in stable coins tied to USD or a basket of crypto like DAI

Yes i konow, i got in Storj and converted it to Ether, and holded for some time, 2 days agoe exchanged all, got profit about 10-20%, i wold buy Ether today, but i needed to withdraw them for more promising thing.

@beast i duno all the crypto lingo, but what you mention is pretty basic stuff, it didn’t make me any wiser on why exactly it’s a benefit to storj if i sell their tokens, if i don’t then they should rise in value which means storj has more assets to work with…

also pretty basic, also you talk about the tokens as if they have value… they don’t have any more value that is ascribed to them, that has no relation to the revenue of a company with a coin, only usually the adverse is true, because the company with the coin most often has huge reserves of them.

alas i better read this thread i got thrown into from the beginning… maybe ill find some of the answers to my questions along the way…

i like volatility it is good when one wants to trade…
no money in stable markets… xD

then why not just use directly Etherium?

Only reason storjlabs is using storj tokens is because it is free money. Strojlabs did not pay money to get those tokes - it created for free. It sold some of those tokens in ICO to raise some money and now it is using rest of those tokens to pay SNO expenses and some dev salaries. That way it can finance the payments to SNOs for free (not including transfer costs). That is the only reason it is using storj tokens. And Beer example above is really bad example and full of logical errors. Just ignore it.

Even if there was completely free and very convenient way to pay in dollars, storjlabs still would not use it, because it would need to obtain that money from somewhere. While, if it uses storj tokens, then it already has millions of it.

4 Likes

This is the first resonoble answere that make sence. Thank you.

1 Like

This is not entirely correct.

The token store in some ways is comparable to machinery in a factory. It’s not free money, it’s a store of assets. One could argue about the intrinsic value of a dollar in the same way.

However, Storj is paying the SNOs… the SNOs are working, the satellite operators are working… and that work is producing product which is being sold and is paid for…

It’s difficult to think of an appropriate comparison… maybe a lake.

Let’s say I buy a lake on a hill. There’s potential energy stored in the water’s height, the hill, the basic structure…

If I build a generator and let the water pour over the hill to spin the generator, is the electricity obtained “freely” ?

Work was done to put the water in the lake.

Losing my own thread here… tired – insomnia finally ending this afternoon.

In any case, the pool of STORJ tokens is not free money. People are working to move those funds… meaning if there were no SNOs, the value of the token store would be zero. So, SNOs are creating the money value in STORJ token… not the other way around.

The value of the token is however much money people are willing to pay for it. Creating the initial amount of tokens didn’t require any work. Neither did the initial sale. People invested in them because they believed in the project and ever since that the value has been based on supply and demand.

Free money is a gross oversimplification, but not entirely unfair. The upside to that is that it’s in storj labs interest to keep the value of the token high or at least stable. Hence why the discount is introduced when customers but with Storj. That creates demand.

I don’t know enough about the initial token sale to say more about it. But we’re in this thing together now and we all benefit from higher token value. At least those of us who own tokens. If you don’t want to bet on the value going up you can still sell them of course.

Edit: Btw, everyone should be aware that storj labs likely won’t comment on these discussion too much as anything they say about the token could influence token value. So all official communication is done through quarterly token flow reports.

There’s no such thing called free money.

Money is a transfer of value. It doesn’t contain value in itself. It’s an abstraction of work. So, it’s not possible to have “free money”…

Just like in physics, when one is walking on the surface of the Earth, the Earth pushes back on your feet… SNOs pull the value of STORJ. It’s not possible to “create free money”. One can operate at a loss, one can over charge for a service, one can lie about the valuation of a service… but the transfer of value always holds… This is why very wealthy people buy land or companies rather than have a fist full of dollar bills.

I love all the analogies, but the truth is that it’s trivial to create tokens. The creation of those tokens costs nothing. And no services were sold when those initial tokens were sold. All you got was the token and the hope that it would some day be more valuable based on the idea that was tied to that token. So you bought mostly trust in Storjlabs and their ideas at that point. It wasn’t actual work you bought in on, just the promise that in the future there would be a purpose for those tokens.

In a free market that’s as close as you can get to free money. Like I said, it’s an over simplification. But I can see where it’s coming from.