Vlog #8: Why a STEEM token represent value A.K.A Where does the money come from?
I get the question: 'Where does the money come?' all the time. But I believe it's the wrong question.
A better question is: Why does a Steem token represent value? It's easier to answer.
From all the effort that users are putting into the Steem blockchain new Steem tokens are created. These tokens are then given to the users that add the most value to the steem blockchain, according to the community.
So the work is being done first and from that new STEEM tokens are created. Therefore the work of everyone that works on the Steem blockchain is already inside these STEEM tokens when they are 'born'.
The confusion starts because most compare cryptocurrencies with fiat currencies. But fiat currencies are created with no effort being done first. The are created literally out of thin air, yet they represent value in the real world. You can buy groceries with them for instance.
It's really strange when you start thinking about it in this way.
Steem value comes from:
An STEEM token has inside of it the effort, time and energy already put in by the STEEM blockchain users, therefore it has value.
I explain it more clearly in my vlog. It's a little over 5 minutes.
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I might go about explaining it in a different way but you did a great job. It is our energy giving this entity value, you certainly have a lot to do with the value today.
Been following you since I joined and you are one of the few who is able to join their creative and humanitarian values with the actual technology behind this. Always worth my read!
That's really nice of you to say. Thank you so much!
Thanks so much for your post. Does the effort of posting, commenting, and upvoting create steem or allocate it among users? Wouldn't the blockchain create the same amount of steem even if there were fewer poster or the content was poor vs. excellent? Just trying to keep learning. Thanks for your help.
Yes, you are right. The reward pool is fixed and gives out X amount of steem according to the weight of the votes (SteemPower) of the users. This is new Steem. (The inflation of new Steem created in a year is 9.5%.)
I believe when more users join the STEEM blockchain it's going to be tougher to earn Steem tokens. (more people trying to earn from a fixed reward pool). That's why the early blogger (2016) could earn relatively easy Steem.
To earn Steem now you really have to increase the value of the Steem blockchain as a user. Whether this is done with poor vs. excellent content I can't say. Because what someone considers poor or excellent is subjective. The community gets to decide though.
Thanks. That is very helpful. So as the number of users grows, more quickly than the growth in steem output, an allocation to a contributing user may be smaller or harder to earn. However, the value of a unit of steem, may be worth more in the future (hopefully) so you may earn less steem but more value for a post.
You got it completely right!
I'm catching on. Thanks so much for your willingness to patiently teach newcomers.
I've just shown your video to my girl as she's been asking similar... 'oh he's cute' facepalm! Haha
O man, thanks and sorry at the same time :). It made me laugh though! I hope she got some information from it!
Yes, we both did one way or another!!
Yeah, every single time I tell someone about Steemit they ask this question. Everyone seems baffled about the origin of the money. Also, quite often they won't accept that fiat is made out of thin air and is little more than a promise. They tend to cling on tightly to the myth that the government has a huge vault with gold to back that shit up... :)) I like the simplicity of your answer...
Thank you for your comment. People have to indeed be willing to make some changes in their minds about how things work to make this all stick. But once they get it's magical!
Well said! I think that once the platform grows in size so will people's acceptance of it...
As always another quality and helpful content coming from @exyle. Upvoted and resteemed!
Thank you!
It's magic.
It's cryptocurrency :)
I recently was telling a friend about Steemit and he asked me the same question, "Where does the money come from?" I think people ask that because they are skeptical, not because they actually want to know how Steemit runs under the hood. Everyone wants to know that they can trust what they're involved in, such as driving a car. They want to trust that the engine will start when they turn the key and that the car will take them where they want to go and bring them back. They don't actually care how an engine works or even how the engine is built on an assembly line.
The best answer to the question may be, "It is created and distributed within the Steemit network system programming in an entirely new way. Many people are blogging, getting paid, and buying things with their profits. It is real, it is worthy of your trust."
My two cents. 😀
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Useful info, thanks for explaining.
I was pretty skeptic about it, but wouldn't hurt to give it a shot, I thought since I already blog daily.
It's good to learn more about steeming and how it works little by little si I'll definitely watch out for more posts like this! :)
followed, upvoted and resteemed ;)