Why does Storj use the STORJ token?

Product Discussions STORJLINGS
41

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.

42

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.

43

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

44

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.

45

@anon27637763 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

46

then why not just use directly Etherium?

47

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.

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48

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

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49

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.

50

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.

51

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.

52

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.

53

True.

It’s also trivial to create dollars…

Again… True.

The idea is tied to the work (at the time of sale - future work) that SNOs, satellite operators, and developers are currently doing.

No. This is conflating the token with the work. That’s not the way it works. But, that’s the fatal mistake many in the crypto world make.

Paper money has no intrinsic value beyond the paper itself. It’s the work, measured in GDP, that gives that dollar value.

54

I’m not following this statement…

It’s actually a representation of debt with fiat currency, but lets not get into that.

55

The tokens are not important in this discussion. That’s the problem with the discussion.

It doesn’t matter what the medium of exchange is, what matters is that there’s work being done.

Arbitrage isn’t work since nothing is being accomplished. The reason why arbitrage produces anything at is because of the work being done by the companies or currencies being traded. If no work is being done, then the entire system is Robbing Peter to pay Paul. And those systems eventually collapse under the weight of debt accumulated due to lack of work input into the money system.

So… your statement regarding a future purpose for those tokens is not exactly accurate. Rather, it’s a future system in which work is being done that customers are paying to use. Of course, the initial investors have an interest in the valuation of the token itself, but without work being done to support the value of the token, the token has no value…

The problem with HODLing is that the focus is on the token and not the work being done to support the valuation of the token. The token is meaningless except as a captured vessel for the transfer of abstracted work.

56

I think we actually meant the same thing then

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57

Also, there are fees for taking money from a bank card. I’m pretty sure if I stored 1GB of data on the network it would cost more for Storj to take my money than I would have to pay for storing the 1GB.
Most cryptocoins do not have this problem.

There is a gas station not far from me that sells gas cheaper than other stations, but only accepts cash. The reason is that this avoids the card fees.

58

Can a Tardigrade customer pay for the service in USD? Only in storj tokens?

59

They can pay by credit card or tokens. But if they use tokens they get an additional 10% of tokens for free.

60

I am asking therefore - to know where the balance is in payment in USD or with the token token, because if the price of the token is too high, it will pay me more to pay the USD, someone can count it? (sorry, I can’t explain it better)