STEEM
In the nine months I have been on STEEMIT I must have spoken to well over 1,000 people about the concept.
This week alone I must have spoken to well over 300 people while handing out flyers in Manchester.
One question that keeps coming up, and is no doubt the most popular, is simply.... ”where does the money come from?”
This is the easy bit.
For New Users to STEEMIT I hope this helps explain in the most basic terms how the mechanics of STEEM/STEEMIT works.
To keep it simple, I have stripped back all the complicated bits and pieces and will try and explain it in the most basic form without any fancy "bells and whistles".
I am sure that there will be some that will attempt to pick at it, but what I am trying to get across is how I would explain it to a 12 year old.
Here goes.....
Think of STEEMIT as a small group of people each buying and selling bits and pieces with tokens called STEEM.
Now let's say some Investors want to buy these tokens called STEEM and begin to try and pour money into the pockets of the group, but at the same time the people with the STEEM tokens don't want to sell them.
When more money comes in than goes out, the chances are the price will go up.
At the same time should more money go out than come in, then the chances are that it will go down.
Think of it this way.
Let's say today the price of the STEEM token is say $1.00.
Now every day for the next year (356 days) New Investors want to buy these STEEM tokens and are pumping new money in at a rate of say $1m A DAY.
On other words for the next 365 days there is $365m of FRESH money wanting to BUY the STEEM tokens.
Now let's say at the same time that this FRESH money that wants to buy STEEM there is NOT ONE SINGLE PERSON who wants to either power down or sell their STEEM tokens.
What would the price be in a year?
It certainly WON'T BE $1.00..!!
On other words MORE money is wanting to PURCHASE the tokens than to SELL them.
As for the rewards that are being placed on each Blog, that it is simple.
It's a share of the difference +/- in the rise/fall of the value of STEEM.
Think of it as a BIG HOSE PIPE (Fresh Money) filling a tank with holes at the bottom which are the pay-outs/draw-outs.
If you plug the pay-outs/draw-outs and the HOSE PIPE keeps filling up, what would happen to the tank..??
I hope this helps.
As this was the MOST popular question that I was asked while I was out on the street talking to people, in the next few weeks I will work on a new flyer that will include a very simple picture of this.
In the meantime this is one of many slides I have published in the past and hopefully it will help explain the above a little more.
Once again, thanks for reading.
Stephen
Stephen,
Thank you for putting together another informative post for the SteemIt Community.
And thank you for welcoming new users into the SteemIt community. Your content and comments is what contributes to this being a great community.
Have a fantastic day!
Steem on,
Mike
Thanks Mike. What can I say. I put together my #steemsunday list earlier and once again you have shown true loyalty. You are a credit to the site and I hope people recognise this. Every week I have to flatten the graph to accommodate your generosity of the number of votes and for this I truly cannot thank you enough. Without flattening the graph all people would see would be your bar, and just a bunch across the bottom. Keep the votes coming and I will keep tuning the graph my end :) :). Thanks again Mike and have a fantastic Sunday. Stephen
Stephen,
Thank you! Like you, I believe SteemIt is truly something special. The SteemIt community has the power to change our world and help people around the world.
I am very fortunate that just 10% of my vote adds at least $0.03 to every blog post and comment I up-vote. Supporting authors making a difference is easy.
I also enjoy scanning the newly created posts to find great posts and learn about different places, cultures, and people. It is amazing that with one upvote I can improve a persons experience on SteemIt and even possible improve their life.
I actually started to write a post about my voting style, but dumped it because I saw it to be too self-promoting. There is so much more here on SteemIt and better than a just a self-promoting post.
All that needs to be said of my voting style is that I will continue to seek out quality content to up-vote and especially up-vote those who are enhancing and making the SteemIt community vibrant.
Enjoy the rest of your weekend and have a fantastic week!
Steem onward and upward,
Mike
Shared on twitter. Stephen
The graphic on the scalability of steem is excellent.
Thank you. I appreciate that. Stephen
What a great explanation of how money comes for Steemit... We can also ask the questionaire the same question ; where the money comes in central bank of any country? how the money is created from thin air?
It's a great idea. I may include this. Thanks. Stephen
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amazing your post is so filled with insight. I will definitely be signing up.
nice one! always on point
Thank you. Stephen
I definitely wrestled with this question at first as well. Thank you Stephen.
You are very welcome. Last Monday was probably the best day for me on Steemit since joining in August of last year as I spent nearly the whole day talking to well over +200 students at Manchester University. This day was a MASSIVE WAKE UP CALL for me and told me more than all the other nine months put together..!! Stephen
Fantastic post!!!
Thank you. I appreciate that. Stephen
Why are you calling people: Stephen?
What do you mean? Stephen
Are you signing out with your name: Stephen?
If so, two can play that game. Douglas
Ok Douglas. Stephen ;)
Thats one of the most asked questions when i talk about steemit..
I will probably need to expelling just them like you did :p
Keep it up Stephen, even though it can be a scene from:
The Blockchain Preacher in the Wilderness;D~
I know the feeling. I am determined to continue flying the Steemit Flag... ;) ;). Stephen
Nice write up! Follow now. Dont be afraid to do the same!!
Thank you. Stephen
Our pleasure, excited to see more!
@stephenkendal, great post as always, and a good explanation of on of the most frequent questions I get, as well. Thanks for all you do to promote Steemit!
Recently, I have been augmenting my description (which is similar to yours) with what I call the "SnapChat Analogy."
People ask "But how are these tokens WORTH anything?" when there is no underlying central business "making" something, like a product. I point to SnapChat-- which most people know-- and ask them how SnapChat common stock (valued at $30 BILLION) is "worth anything" when SnapChat has never made a cent, and has no viable plan for making money. It helps explain how we are willing to invest in/pay money for just an idea without the presence of something tangible like a teacup or a dinner.
If people still don't "buy it," I have to remind myself that people were also deeply skeptical of buying AOL and Yahoo! stock at $5.
I could not agree anymore with what you say. It mirrors my sentiments entirely. Stephen
ty for the explanation. I didn't understand the concept, but it's clearer now
I really like the graphic
Thank you. I appreciate that. Stephen
Thank you for taking the time to explain this.
You are very welcome. It's my pleasure. Stephen
Here is a more direct mainstream explanation of what Steem is:
Steem is a user-owned and user-managed content and adverting network with its own currency, also called Steem, that also acts as ownership shares.
This explanation is supported by the PROMOTE buttons on Steemit and maybe on other Steem UIs that many of us choose to ignore.
From there you can now explain the details:
Source:
https://medium.com/chain-cloud-company-blog/platforms-pt-2-there-is-no-free-money-on-steemit-and-golos-40152d418723
And if the beautiful rewards we have at the trending page right now will continue and no investors buy steem, its price will go down again.
The reason for such a high spike in rewards is that they are accomodating the sudden spike in the price of STEEM. Don't forget STEEM was only $0.10 not that long ago. Stephen
And also due to the new reward system?
Exactly. The 7 day rewards is to accomodate scalability. I wouldn't be surprised in the coming years when we are in the 100's of millions that this will be 90 days if not 120 days reward. I for one would be very happy with 120 days when it has 500m users and a Market Cap of $500b..!! Stephen
Exciting
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Thanks, great post!!!....it was one of the questions I was thinking of whilst in the shower....and now I know
Call me a rare one - I don't give a damn. I'm here for uncensored blogging. Screw the money.
Hi Stephen, would it be fair to say that there is no intrinsic value in these "tokens" and the value comes only from those wishing to invest in the "tokens"? And that the tokens may be "figurative"? Similar to gold, which is valued because it is sought after by investors, though in and of itself it is a piece of material with no intrinsic worth? A physical object though rather than "figurative"? Thanks @fleur