My Reply to “Where Does The Money Come From?”

I sent a friend to my Steemit blog. His first question: “You’ve made $3k??”  

By the way, this post is in reply to the #bitcoinpizza conversation. The challenge from @lukestokes was to think through how you would communicate to a friend where Steem comes from and why it has value.  

My friend’s second question: “How do you get the money? Is it actual money into your bank account?”  

In other words, can you actually buy stuff with it?   

I kept my response very simple: “Half becomes Steem Power which is a long term investment that takes two years to draw out. The other half is Steem Dollars, which is equal to US Dollars. It must be converted to Bitcoin then can be converted to fiat, like Aussie dollars.”  

His response: “I didn't realise Bitcoin was still a thing? I thought it had sort of had its day.”   

I thought that was funny, and interesting.

Our brief conversation took place through a Facebook message. Had we been face to face, the likely next question would have been, “But where does the money come from?”  

It would be a fair question. Here’s what I would have said next:

Don’t think of Steem as money. It’s almost money, but not quite.  

Money is a measurable store of value and a medium of exchange. Steem ticks the first box but not the second. If people and businesses will not accept it in exchange directly for goods and services, it's not money. 

There are a growing number of businesses and people that accept Bitcoin as payment. It can sometimes function as money, but not always. Perhaps Steem will function as money in the future. Until then, you’ll need to convert it into money in order to benefit from it.   

Think of Steem as a social media and online community start up that rewards its participants for their contributions of capital and/or valuable content.  

Every active participant on Facebook, Twitter or any other social media platform contributes value to the company through their posts. The company monetizes the data mined from those posts by selling targeted advertising.   

On Steemit, the community also contributes value, and is in fact incentivized to offer an even higher level of value. Rather than extracting that value for shareholders, Steemit returns it back to its participants, those who offer the most valuable content.  

So what are you waiting for? You have nothing to lose. Sign up on Steemit, makes some posts, and see what happens.  

That’s it. Enough said.  

When I’m talking about Steem with my friends who don’t even know whether Bitcoin is still around, there is no point trying to explain what the blockchain is or to go into an in depth explanation of what money is and is not. Who freaking cares?! The goal is to attract people to Steem, for their benefit and ours.   

That said, if you are a “crypto-phile” (did I just make that word up???) and would like to disagree with me on any of the finer points, please feel free :-)