Which is precisely why investors and the creators themselves have a vested interest in making it work.
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Which is precisely why investors and the creators themselves have a vested interest in making it work.
Are you saying that investors and creators will buy more STEEM because they want their existing STEEM holdings to maintain/increase in value? You see the problem. Writing blogs doesn't increase the value of STEEM unless someone pays for the content with another currency. Otherwise, you have a closed loop. Right now, all STEEM holders are riding on the value created by those who are buying STEEM(with another currency). If more money is leaving STEEM than entering, no amount of blog posts will save it from crashing.
How is this any different from Bitcoin? Of course there is a chance interest will be lost in any venture, and that venture will crash. That hardly makes it a scam. Some people are already accepting payment for physical goods in Steem, and it can be used to buy BTC as well.
Who said anything about STEEM or steemit.com being a scam? I haven't alleged that here. Let's look at how new currency is introduced into BitCoin and STEEM.
The BitCoin method of creating money is to do it slowly by compensating miners. This compensation is simply a tax on all BitCoin holders through dilution/inflation. New value isn't created; some of the existing value is simply redistributed to the miners by creating new coins/tokens. I would argue that one of the reasons people invest in BitCoin is that the dilution is happening at a rate that is predictable and relatively slow. There are MANY other factors why BitCoin has interested investors, but those are some that relate to this discussion.
The STEEM method of creating money is also through dilution, but through compensating content creators, curators, and STEEM POWER investors. A notable difference is the rate of dilution, which is much higher than BitCoin and the US dollar, about 100% per year. No one will want to hold onto STEEM because of the high rate of inflation against other established currency options. STEEM POWER doesn't solve this problem in my mind since the interest/dividends which are amazingly high are paid in...you got it: STEEM.
It's important to understand that all the value being stored in STEEM and being cashed out of STEEM was injected into STEEM by investors(people buying STEEM). If steemit.com users continue to cash out of STEEM at a higher rate than investors buy in, then the well of value will eventually dry up, and the value of STEEM will decline. As the value of STEEM declines, the rate of content creation will decrease and the volume of STEEM sales will increase.
Off the top of my head, there are two obvious solutions to this problem. Both involve finding new ways to inject value into STEEM.
I could be wrong. Maybe I'm missing something. But that's my humble and unqualified opinion.
And I am not saying they will buy MORE, but that they will be buying in SP, the long-term, vested interest.