The Difference Between SMT And SCOT
In reading some of the comments on one of the @steemitblog's posts, I noticed how there are many who feel that SMTs are no longer needed with the introduction of SCOT.
This is simply incorrect.
There are some key differences between the two which must be emphasized.
To start, SMTs are going to be coded in the base layer. SCOT, put out by Steem-Engine, is a layer two solution. This means each offers something different.
Coding at the base layer becomes a part of the blockchain. This offers the security that blockchain provides while also decentralizing things. SMTs are going to be akin to STEEM and SBD in this regard.
The drawback to this is the lack of flexibility. To alter the code requires the approval of the Witnesses along with a Hard Fork. Thus, changes are apt to be slow. Also, SMTs are going to be "mini-STEEM" offering the same capability, i.e. the Proof of Brain.
Steem-Engine is a layer two solution which gives it a lot more flexibility. The tokens can appeal to those who are not tied to the Proof of Brain concept. We also can see, at the present moment, updates happen a lot quicker. There are no Witnesses required to vote on code changes. They simply can be implemented as the team sees fit.
That said, I hypothesize that, over time, Steem-Engine will also get more decentralized. The limited road map put out calls for the sidechain moving in that direction.
The important factor at this level is the smart contracts that Steem-Engine can use. To my knowledge, the SMT technology will not include this. Since the coding is in the blockchain, it is a one size fits all.
But what happens if a project fits outside of the SMT use case?
This is where SCOT enters the picture.
For example, take a company like Tesla that gathers data from the owners of their cars. As the vehicles are driven, Tesla gathers data that it feeds into its hivemind in an effort to improve the autonomous driving technology.
Now consider the idea of Tesla paying the vehicle owners for said data. A token could be created for that purpose. Unfortunately, a SMT will not work since there would not be a post about it. Sure you could have a Proof of Data Upload but that would not sit well with the community. If you think a meme trending gets people upset, imagine a post that said "2.5 MB of data uploaded".
For this reason, a layer two solution using a smart contract would be preferable. The token developed is not a SMT because it is not interested in the use case that is offered.
Essentially, Steem-Engine is offering Steem the general blockchain capability as opposed to specialized. By combining the two, it is akin to Ethereum or EOS in this regard.
That said, there is still a large market for SMTs. Having things hard coded into the base layer provides businesses with a great deal more security and comfort. As we know, Hard Forks on Steem are slow to come about. This is a good thing. A lot goes on behind the scenes with Hard Forks, especially with the exchanges. Applications also are responsible for updating their code to match.
I guess the easiest analogy is Wordpress. SMTs are like the skins of websites. Wordpress became the de facto website creator since it offered users templates to set up their sites. It was easy and hassle free. In about 15 minutes, a user could be up and running.
SMTs should be a lot like this. If you need the capability that it offers, it is an ideal solution. The set up process will be quick and easy with no coding required. Since there is little flexibility, the template is basically the same. Enter the token name, symbol, and number of units is most likely all that is needed. The blockchain takes care of the rest.
To fulfill the idea of "tokenizing the Internet", SMTs are the ideal solution. This is what they are designed for and they are built upon a system that has 3 years of proof under its belt. Whatever the issues are with Steem, one thing that is constant, the reward pool keeps churning out tokens based upon the upvote system without skipping a beat.
SMTs are a powerful solution for an application that fits into a particular box. Anything outside that box exits that realm and enters the world of SCOT. That is not to say that one could not use SCOT to set up a SMT. Again, many opt to not use the Wordpress template and, instead, create the websites how they desire.
Ultimately, it comes down to choices.
In the end, the Steem ecosystem needs the SMT capability. This will tie in well to the base layer while Steem-Engine provides additional options. It is not so much one competing against the other.
While SMTs can take care of the Internet, SCOT can focus upon something that is missed such as the security token market.
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