RE: How I Sell Skeptics (And The Tech-Un-Savvy) On Steemit - Part #1

[kuku12170]

Yes, I'm very curious why this is not a pyramid and where the money comes from, I want to read about it in a simple and understandable language.

Comments

[futurethinker]

The most simple explaination I can give you is: everyday there is new steem being created in the network, which is distributed to authors and curators. You might wonder how can steem (money) just appear out of thin air, and it doesn't.

The supply of steem increases everyday which effectively makes 1 steem less worth. Quoting some parts of a post made by @warjar

• New STEEM tokens are created every year, and this have a diminishing effect on the STEEM tokens value.

How the steem is distributed

• Inflate at 9.5% APR narrowing to 0.95% APR by 0.01% every 250,000 blocks (Roughly 0.5% per year).
• Witnesses receive 10% of inflation
• 75% of inflation goes to authors and curators
• 15% of inflation is allocated to Steem Power

[lexiconical]

A better explanation than my own.

[futurethinker]

You are too kind sir :P

[lexiconical]

I'll respond to those exact questions in part 2. That's almost always exactly where the discussion goes next!

In short, the rewards pool comes from the annual inflation that is agreed up on by all stakeholders. It's currently 9.5%, reducing by a flat .5% each year.

Overall, a far more reasonable inflation curve than almost any fiat currency and even a lot of coins which had explosive early inflation.