My entire first week on the Steemit platform was a little bit stressful. I had found this amazing new world full of super-smart creative people who all seemed to be making money doing the thing I wanted to do... I was happy to do the work, I was happy to socialize, build relationships, network and basically make a heap of friends... but I wasn't happy to do that if it all turned out to be a Ponzi scheme.

I didn't want to put in a heap of time, only to find that the new kids can never break into the clique, and can only make $0.01 dollars at a time while more established users were raking in the dough.

So, I've put together this little FAQ of all my early first-week questions.

I hope this helps any doubts new users may have.

IS STEEM A PONZI SCHEME?

No.
It's really not.

YEAH, THEN HOW DO YOU EXPLAIN ME MAKING NO MONIES?

Firstly, for those that don’t know… a whale on Steemit is someone who has a lot of Steem Power. Steem Power is the determining factor on how much weight someone has on this platform.

See, a cryptocurrency like Bitcoin is mined. Dudes, chicks, companies and clouds set up their computers to run continuously churning through ‘problems’ and verifying transactions. Each coin that is mined, ie, discovered, goes into circulation where it can be traded or used as currency.

Source

Steem is also mined… but once it is mined by someone’s computer, it needs to be verified by a witness. The miner gets to keep 70% of the Steem mined, and 30% goes into the reward pool for articles and comments that are awesome.

That 30% is distributed by upvotes…. but not all upvotes are equal, else people would create 10 trillion fake accounts to upvote their content.

No, upvotes are weighted by how much Steem Power a person has. Steem Power can be gotten in 2 different ways;
1.) through purchasing Steem cryptocurrency and then powering that up or
2.) as a reward for awesome articles and comments paid out in 7 days.

BUT WHALES ONLY PAY THEMSELVES

That’s not really true… there are quite a few whales that reward good content by newer people in order to grow the platform. There is also a heap of initiatives to help newer users reach a wider audience, like the MSP, Curie and OCD

Secondly though, can you really blame them?

I’ve definitely gravitated towards the people that started around the same time as me, they’re my new friends and I really like them. I like a few of them so much that I’ve set up an autovote so that I upvote all their new posts… because I like them as people, want to support them and trust that they’ll continue producing quality gold in post form.
The people that have become whales have probably been around for 2 years, in a tiny close-knit community that was ignored right up until Bitcoin exploded, and now everyone wants a piece of the action. There’s no reason for a whale to upvote you unless you’re providing something amazing or they like you.

Think of it this way… if you had a shop, you wouldn’t expect to sell all your stock just because you made them, you’d expect to sell them because people liked/needed your products.

BUT ADAM I ONLY UNDERSTAND SPORTS ANOLOGIES

Okay, how many basketballers want to play for the NBA? Like, millions, yeah?

Source

Those millions don’t all get in because they really want to, the players who get signed up to a team do so because either they are super exceptional, or have been grinding away for years and proven their dedication or they know the right people…

One spectacular play doesn’t get you the contract, you’ve got to prove yourself man… people need to know you’re the real deal before they invest in you.

ACTUALLY I ONLY UNDERSTAND HOLLYWOOD ANALOGIES

I’m pretty concerned about your education…

Okay, they didn’t just find JLaw off the street and hand her the leading role in Hunger Games, she’d been acting all through her teenage years to prove she could handle the investment the producers were making into her.

Now she’s the highest paid female actor because of all the work she’s put in, her good-natured character, her hilarity, and a ton of luck.

UM I ONLY UNDERSTAND SUPERMODEL ANALOGIES

That's enough of that.

HA HA HA

Okay, settle down weirdo.

OKAY, SO WHAT IF I GRIND AWAY FOR HOURS AND NEVER GET ANYTHING

Isn’t that life though… you spend time on Facey and Insta and Twitter and have never made a cent while those companies have made so much money off you, so if you make no money on here I bet you’ve made some friends or read, watched, listened to some good quality content for free.

BUUUT I COULD BUY STEEM WITH MY OWN MONEY AND NOT MAKE ANYTHING

That’s not true either, at the very least you could sell the Steem for the market price, and if we’ve all done a great job here you should at least make a profit… if not with time spent, at least in pure Fiat cashmoney.

SOUNDS PRYAMIDY

It’s not, people can make money on the Steem Blockchain without ever paying a cent.
@pawsdog is conducting his own experiment to prove this exact point.
A Ponzi scheme relies on money from new users to pay old users… it requires a constant influx of new people. The people at the top get the money (which trickles down to keep motivation high) and the people at the lowest level always lose out.

Pyramid Source Article

You’ll see it in situations where companies take you on as a sales person or direct marketer but make you purchase the stock yourself to sell to your friends…. Or in the Crypto world, at places like BitConnect. In my opinion the BitConnect business model doesn’t at all seem sustainable… so they must be paying interest out of the new money coming in and getting locked away, or they make it incredibly hard to get the paper profits out.

I was worried that Steem was a Ponzi scheme (also known as a Pyramid scheme) where new users could never make any money regardless of the quality of their work because the people with all the influence were only looking after their own.

While of course this is true to an extent, there is absolutely nothing to prevent me from investing $1000 or $10,000 or $100,000 into the platform and taking control of the rewards pool myself. Whales have already invested a lot into the platform, but we can grab some control if we want to enough… that’s not possible in a Pyramid scheme…. The people at the bottom can never ever win.

Newbies can spent no money at all and still make $100 in their first week. That’s amazing! It does require some skill and effort, some luck or knowing the right people.

WHY WOULD ANYONE UPVOTE?

It doesn’t cost me anything to upvote your work.
Not only does it not cost me anything, but if I upvote something that other people also like, then I get a small reward for that. Of course, you have a limited number of votes so that people can’t spent their days upvoting absolutely everything in the hopes of hitting something popular.
The only thing my upvote costs me is the opportunity cost of placing that upvote somewhere betterer. So, that’s why I would never upvote something rubbishy that someone has chucked up with no effort. There’s so much on this platform that I would never upvote even though a huge amount of effort goes into it, purely because it doesn’t interest me. I’m a jerk like that.

BUT WHERE DOES THE MONEY COME FROM? THIN AIR? FAT AIR? AIR THAT CLIMBS ON ROCKS?

Ahhh, what….?
Pretty sure I covered this already, but alrighty..
The money comes from the miners, it gets confirmed by the Witnesses and awarded by the people with Steem Power. Miners get 70%, everyone else gets a share of that 30%.
The monetary value at the bottom of a post or comment is not USD, it’s Steam Dollars which at the time of writing is worth $10 USD per SBD.

I WANTED MONEY FOR NOTHING AND THE CHICKS FOR FREE!

Steemit now is like trying to start out on YouTube now.
YouTube has creators with millions of subscribers but either skill or luck got them those subscribers. If I make a video and a famous YouTuber mentions it, that’ll rocket me to a decent subscriber base.
If I write an article, post a video or song and a whale resteems it then rocket rocket rocket time.
There are millions of videos on YouTube that are amazing that I’ll never know about. Videos that are significantly better than those produced by popular YouTubers, but thems the breaks.

Unlike YouTube however, pure popularity (by Whales, then Dolphins, etc) dictates if someone gets paid. YouTube’s Adpocolypse (advertisers all suddenly pulled out so YouTube freaked out and demonetized lots of videos… destroying the income of many creators) highlights the problem of having one company control the financials.

SO THE PEOPLE CONTROL STEEM?

Absolutely. The miners, witnesses, developers and Steem-powered Steemians are all different people with different motivations, experiences, and alliances.

If some crazy Billionaire suddenly bought up all the possible Steem so they could influence absolutely everything, then someone would create a new platform and we’d all move across to something less Billionaire-biased. Steemit only has value if we all use the platform. If we power down and sell out then the Steem power the Billionaire owns is suddenly absolutely worthless.

It'd be a shame, but it’s not out of the question.

IS STEEM THE NEW FACEBOOK?

Facebook has value because all our friends and family are on it… I’ve now been on it for over a decade and I rarely check on it anymore…I used to use Instagram a lot, but again I’ve gotten bored with it because Steemit has a lot more meat to it. Once Steemit has some really great mobile apps then I think it’ll explode.
My partner reads Facebook every night, and mainly ends up reading articles her friends post links to… it’s not really what Facebook is for, and she has to deal with a lot of ads to get the gems of interest.
Facebook makes money by offering targeted ads based on your information… Steemit doesn’t have your information

IS STEEM THE NEW BLOGGER? REMEMBER BLOGGER?

Eventually all new Bloggers and Wordpress kids will start on Steemit. Most current bloggers have their own setups, but they don’t make money per post. They just make money selling products, courses or advertising space. I envisage that eventually Bloggers will sell their products directly on Steemit, or at the very least, blog on Steemit and then send any potential buyers to their sales portal.

Most are hardcore about collecting e-mail addresses, and this is mainly because an e-mail results in more sales…. Steemit should make this an unnecessary hassle.

At the moment, Bloggers have to drive traffic to their websites, via Facebook or e-mail and then sell sell sell to make a living…. I’ve read that most Bloggers spend 10/20% of their time actually writing posts, the thing they enjoy, and the rest marketing and spruiking their content.

While Steemit won’t prevent Bloggers from selling products or courses, they might find that they just don’t need to once they start making enough per post.

IS STEEM LIKE A POLE DANCER?

Okay, now I see that you're starting to get it. Steem is like a pole dancer... you have to be strong yet graceful, tough but fun and most of all you have to keep at it until you're amazing. Just like my young friend @polebird

IS STEEM THE NEW YOUTUBE?

Ugh.. if spammers keep just linking videos... maybe.
No, Steem is very different to YouTube, in my opinion it has an opportunity to be more intelligent than YouTube, a place where discussion and conversation are paramount and pithy, hurtful comments die out.

Steem can be a one stop shop for everything... it can take the best parts of Facebook, YouTube, Blogger, Amazon, eBay and allow people to create a living talking directly to their fans.

Remember a few months ago when everyone was going nuts for Rick and Morty Season 3 episodes?

Obviously, the company that owns the rights took down anyone that hosted entire episodes on YouTube… and I imagine at some point that’ll tackle those videos on random cartoon websites.

Think about this as a user… you could try and watch it on YouTube (they were being shown Live on YouTube where they would just play episodes back to back to back… but you couldn’t skip forward or back, so you had to sit through episodes you might have seen… or come in half-way through an episode you didn’t)… anyway, a user could choose YouTube where the quality might be questionable… they could purchase it from YouTube, iTunes or Amazon Video… or, they could watch it absolutely free on Steemit… the only cost being an upvote.

The creators of Rick and Morty Season 3 Episode 7 would get their money instantly, and possibly more importantly, they’d get the influence to upvote projects they care about.

Money is nice, but power is the real motivation.

Imagine a movie getting released to the entire world at the same time… not costing the consumers anything financial and the makers potentially making back their costs that same day.
Consumers would love the no commercials aspect.

SO IT'S ONLY GOOD FOR VIDEOS?

A writer could release a novel paragraph by paragraph and get paid for each post... instead of taking a year to write the book, then edit, publish and distribute.

Marketing and promotion is pretty much self-contained. A company could spend their entire marketing budget on buying Steem to convert to Steem Power and uptick their own projects to get them on the Trending pages.

Imagine how well a new Tesla product will do if Elon Musk was able to award $10,000 upvotes for articles that shone a positive light on that product. Everyone in the world would write an article in the hope of getting a piece of that pie…. Google would be smashed with positive reviews.

The benefit to a company CEO or Billionaire is that once they’ve invested a large chuck of cash into Steem Power, that influence stays with them forever (until someone else buys more) allowing them reuse their influence for each new product/project.

It does sound horrible that a dodgy horrible Billionaire type could buy people’s words… but the consumer wins out too… You don’t have to follow anyone on Steemit, and unless someone in your Feed resteems something then you shouldn’t have to hear about it. You’re not being advertised to like you are on other platforms… eventually an honest review might make more money from everyone else upvoting even if you miss out on that huge payout from a corporate/CEO upvote.

It does sound like the political silos would increase within Steemit, unless people choose to get their news from an unbiased source. There might also be the continuation of the problem where media outlets rush to be the first to get news out, without adequately checking first… but again, users can choose to ignore outlets that turn out to be factually incorrect.

IS STEEM THE NEW INSTAGRAM THEN?

I know Kendall Kardashian is huge on Instagram… but I don’t have to follow her. Kendall does make a ton of money from advertisers and sponsored content. Would Kendall need to make such deals and potentially disenchant her followers when she could instead make thousands just being her?

She might aim for that upvote or resteem from Pepsi but at least that’d be available for all to see.

Instagram however, smashes me with sponsored content that I keep thinking are my friends posts and it’s annoying. At least with Steemit I’d only be annoyed by my friends.

I can see a situation where a company releases a new product, and instead of printing out paper instructions they put them on Steemit, effectively making back their costs for the effort. The downside is that if information in those instructions change, a whole new instruction page needs to be published… posts cannot be edited after a few days.
This might make it tricky for users to find the latest and correct information… especially if Google picked up the first instruction page because it was more popular. Facebook, Twitter, Instagram, Reddit, Wikipedia and websites all allow content to be deleted even years later. Steemit doesn’t allow this which might be problematic in the future.
People have been fired from their jobs for tweets and Facebook statuses… and those can be deleted… could people truly adopt a system where their words last forever…?

The initial Deadpool movie was dead in the water… the studio had no interest in producing it, until a short clip was leaked to the public… Fans went crazy and once the studio realized the demand was crazy-high then they provided the funds… which was a fraction of what a normal blockbuster would cost… making Deadpool one of the most profitable movies of all time.

With Steemit, the producers could have released that clip directly on Steemit, which could have funded the whole movie. This will work once the userbase of Steemit increases substantially.

IS STEEM THE NEW EBAY?

You're asking so many random questions, but since you asked...

Cost of an item is the same for you and me regardless of location… as someone who lived in a country where everything (including digital products) were marked up because it’s so far away from every other country, this is amazing. See Australia sue everyone here or check how digital games are priced entirely different in Australia because it's so far away - https://www.steamprices.com/au/search/?preset=unfair

SO STEEM IS PERFECT THEN?

Not at all... I think there are some very real threats to Steem, but it does seem like the developers are doing everything they can to resolve the various issues.... and any developer can get involved and make their own application or front-end.

Threats to Steemit

• The general public just doesn’t embrace it
• Facebook creating their own version of Steem
• Competitors using Litecoin instead of their own token
• It’s too messy to be useful
• Process of cashing out is too cumbersome for people to bother with
• Not enough money in the daily Steemit pool to make it worth it for blockbuster films
• People don’t know when they’re being advertised to
• If all users only chase corporate upvotes it might be horrible
• Too much misinformation (unsure of official sources)
• Adoption is low because content isn’t different/special enough
• Fake news outlets, porn and billionaires control the total award pool
• Only people producing quality get paid and the masses leave because it got too hard
• Companies create their own Steemit variations so they can control the content. We end up with trillions of Steemit-lite platforms.
• People just consume the content for free without ever creating a Steemit account and voting.
• People may not like the fact they can’t delete or edit their content after 7 days.

WHAT DO YOU RECKON SHOULD BE ADDED?

I’d personally like to see a favourite friends list. My feed is a bit unruly at the moment and needs some heavy-handed muting/unfriending, but even so, I’d like to be able to check on my favourite peeps by clicking on their name.
Facebook is good for seeing what your friends are up to… Twitter is good for seeing what famous people are angry about and Instagram is good for seeing what pretty people are being photographed next to.

I think Steemit would need something to allow users to easily flick between their friends and then general stuff they’re interested in. Reddit doesn’t do this at all, it’s purely content based, but I think Steemit is a bit more personable and friendly

I'VE LEARNT NOTHING!

That's fine... you are totally welcome to ask a trillion questions on this platform, because, quite frankly, everyone here is listening... and that's amazing.

Please let me know if I've got anything wrong in here... I'm still very much learning. I'm happy to edit this document as we go.

Thanks for reading!