Where does the money come from in Steemit.com?
What is Steemit.com?
Steemit is a social media and blogging platform that pays users for posting content.
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Where does money come from?
Steemit works on the basis of Blockchain technology. Blockchain became the building block of the first cryptocurrency in the market called Bitcoin.
What is BlockChain?
The blockchain is the record list that stores not just the financial value but every value that passes through its system. The data stored has multiple verified copies around the globe at different places. The data has no centralized server. so, no 3rd party or any authority is needed to validate anything on the blockchain.
Let’s take the example of Bitcoin. In case of Bitcoin, no verification from the government, exchanges or any international body is needed to transact it. no interference, no exchange or banks fees, no regulations or hindrances from the government or international monetary systems.
Now come to Steemit
Contrary to Facebook, Twitter and Linkedin etc there is no centralized authority in Steemit. Steemit does not store or sells any of the data shared by its members. Since the communication is Peer to peer without any central server hence it means that no ads will be there. However, there are laws in place for protecting people from spams and fraud. The protocol that runs Steemit is called Steem Blockchain protocol. Along with storing values, it stores content and rewards writers for the content and comments they post on the Steemit platform.
There are no ads and no date selling, so where does the money come from?
The Steemit protocol, just like Bitcoin Blockchain protocol generates money out of the thin air. What does it mean?
You certainly use US dollar and should know that US Dollar has no value in terms of real wealth since it was decoupled by the American President, Richard Nixon, in 1971 from Gold. Now the dollar maintains the value because people believe in it. One dollar is considered of lesser value than 100 dollars and 100 dollars are considered lesser to 1000 dollars and so on.
Same is the system with Steemit dollar. It has no real wealth on its back but yet people’s belief in it gives it so much importance in terms of its monetary value. There are currently many cryptocurrencies floating in the market like Bitcoin, Litecoin, Stellar etc but Steemit pays you even for posting contents and comments which is incredible. Once a person upvotes, his steem power is transferred to your account and this is how you earn.
Keep on Posting and commenting. Thank you.
Nice post! There actually is a central server though which is how we can all access the site (i.e. steemit.com). The database however, is decentralized since blockchain is a type of database. But yea, common misconception about blockchain is that it’s all decentralized. Just the data is, but the sites and such will always be centralized (for now)
Definitely, sir. Otherwise, there would be a great opportunity for spammers and other malicious actors to push their agenda into Steemit.
Great post broda...this is really educational. Been wondering same too
Thank you so much, sir. Stay blessed.
The reason it has a fiat currency value is because people want to buy STEEM with their hard-earned dollars and other fiat currencies. Even though you think there isn't "advertisting" do yourself a favor and check the promoted stories categories and you'll find that many people are spending big STEEM to promote their posts above others.
Definitely sir but I meant the Steemit as a platform does not advertise commercial ads contrary to Facebook and other social media sites. Thank you so much for your guidance.