This draft diagram is intended to provide a conceptual view of the steem creation and distribution process which can be understood by someone who is fluent with neither technology nor cryptocurrency.
The Assignment
@cmp2020 had his piano lesson last night, and happened to mention his Annabel Lee post to his instructor, which led to a discussion of steemit, which led to the inevitable question: "Where does the money come from?" After some discussion, the piano instructor was still confused, so I got an assignment to write something up before @cmp2020's next lesson. I decided that a diagram would be easier than textual description for the piano instructor to process, so I created this.
Obviously, this is just intended as a mental model, not a technical specification. I intentionally made many simplifications (like ignoring steem power and steem dollars). But hopefully it is conceptually helpful. Please feel welcome to provide suggestions for improvement. I'll try to incorporate any feedback into a revised diagram before @cmp2020's next piano lesson.
In brief, here's what it represents:
Faucet and Clock
New steem is created by the witnesses at a scheduled rate. The faucet depicts witnesses pouring new steem into the rewards pool where the faucet handle managing the rate is controlled by the clock.
Scale
The scale represents the process of measuring the value of the posts, comments, and votes in the reward pool. The witnesses use the scale to control the distribution of new steem from the rewards pool into users' wallets. My only reason for choosing the scale is that it was the most appropriate I found among the items available in the the LibreOffice gallery.
User Activity
The last two arrows on the left (grey in color) depict user (steem owner) activity. The bottom one indicates that users enter posts, comments, and votes into the social content on the block chain. The top one indicates that users are constantly depositing, withdrawing, and transferring steem in and out of their wallets.
The final bi-directional blue arrow, on the right, from steem owners to witnesses is meant to show that any steem owner can elect to operate a witness server.
Value
Left out of this diagram is the usual next question, "where does it get its value?" Of course, the value comes from the fact that it can be exchanged for other cryptocurrencies, like bitcoin, which in turn can be exchanged for more conventional currencies like the US Dollar. In similar fashion to how the value of conventional currencies is found by international currency markets, the value of Steem and other cryptocurrencies is determined by the cryptocurrency exchanges.
Wrapping Up
This draft diagram is intended to provide a conceptual view of the steem creation and distribution process which can be understood by someone who is fluent with neither technology nor cryptocurrency. I would appreciate any feedback. Also, as long as I'm posting anyway, here is the most recent revision of the Steem at a glance chart that I posted a while ago (last edited May 12).
I think neither of these is probably suitable for printing, so I'll need to work on that. Additional feedback is invited and welcomed.
@remlaps As a new steem user, can someone explain how steem owners vote for witnesses in a simplified way like your excellent diagram + commentary?
It's not clear to me if I'm supposed to vote for witnesses on steemit.io or somewhere else.
Do witnesses "campaign" for votes somewhere? Thanks!
Hi @donnlee,
You can vote for witnesses here - https://steemit.com/~witnesses.
I'm not aware of any on-going campaigns, but occasionally, witnesses will create posts asking for votes and describing their current projects. The best place I know of to look information about witnesses is here - https://steemit.com/created/witnesses. I think they have a channel in steemit chat too, but I don't use that much, so I'm not sure how useful it is.
@remlaps Thank you. I just found this and it has some more info on witnesses: https://steemit.com/steemit/@thecryptofiend/the-missing-faq-a-beginners-guide-to-using-steemit
Much to learn!
That's a good article. It had slipped my mind, so I'm glad you found it. There is a lot to learn, but fortunately you can learn it in small chunks. Just be attentive to quality and relevance on the things you post, post regularly, and vote & comment on posts from others, and you'll do fine. You can learn the rest when you need it. Seems to me like you're off to a great start.
Welcome to the platform!
Cool post. Upvoted and followed
I liked your post, keep posting so it looks good, I follow you follow me