Steem, a ponzi scheme ? A nice and short answer
Eliosoff reiterated Gao's point that steem might be a Ponzi scheme, predicting that the digital currency "will grow and grow until there are no fresh users to suck in and then quickly collapse," a situation he described as being "the Ponzi way."
Source: http://www.coindesk.com/steem-provokes-doubt-market-observers
I enjoy Bitcoin fans saying this while BTC needs 1M USD of fresh capital per day in order to survive (that's the current daily payout for miners). And it has survived for over 8 years. Why can't they comprehend Steem can survive in the same way? It's quite amazing how close-minded those "experts" are.
@help-yourself
Some people are too dramatic using words as "collapse". If steem value goes down, users will simply experience a reduction in payouts. That's all there is to it. 20 days ago our payouts were 1/6th. Now they are more, tomorrow they may be more, or they could be less. Most authors don't care. Their typical social network will pay them precisely ZERO. At least here you can get paid for your content. Will it be 5 cents, 5 dollars or 5k dollars - well, at least it's more than zero.
What about a payout of 1 million dollars?
Mini me, stop humping the laser.
Actually if STEEM value goes down it will benefit everyone as whole as they will get significantly more STEEM POWER for their posts which will help to even out the voting power.
It is logical in a way, this model will reach a stand still point. And there are many questions about the model itself that no one can give a clear answer to.
I asked this question and I am still not convinced but any of the answers:
https://steemit.com/steemit/@eyass/where-does-the-money-being-distrubuted-comes-from
Check this post, I had similar doubts but this explanation made it a little more clear for me:
https://steemit.com/steem/@cryptomarket/how-do-steem-dollars-hold-their-peg-to-us-dollars
Nice explanation. But it is not convincing. They are already distributing rewards, so either they have reserve to back those rewards, or they are creating wealth out thin air with the hope that more and more people will get involved and invest, which VERY dangerous.
I might be totally wrong, but this my understanding so far.
Well I can't speak about what could happen and I don't know the creators personally so we can't really speculate about their intentions. What I can tell you is that Bitcoin is basically the same, POW is not creating money out of thin air? There are still millions of untouched BTC since it's origin, what happens if they sell 1 million at once, to whom they belong?
Is not that hard to comprehend, check the comments in that post as there are other useful information. Your argument is basically saying if everybody starts withdrawing their money at once it will create a bank run and a economic collapse. Well yes of course.
Speculation, investments and users is what drives the market. The marketcap for cryptocurrency is huge, that's where the money comes from. If everyone all of a sudden decides that Steemit sucks or there's no value in it then payouts will devalue and users will leave, that's it.
I am not questioning the intentions of the creators in any way. I am sure that they want to see it succeed as I and many other people do. I personally think this one of the few, if not the only place on the web where they promise rewards and actually give them. I am only trying to understand.
I can't evangelize for something I don't thoroughly understand and believe in.
What about when steemit allows paid advertising and that revenue is distributed?
What about when it generates revenue how Facebook or Reddit generate revenue and that revenue is distributed?
There are a multitude of potential revenue streams possible (and certainly planned) for steemit beyond purchasing of the currency. The future is extremely bright here. Calling this a Ponzi is outright lying.
Then people will build bots, or other interfaces, or scripts and blockers. That is the beauty. Advertisers will have to pay for people to view their content. I'm okay if there is one small ad on steemit.com, and if it gets too annoying, I might just get piston web running.
or just a whole new website... you don;t nec. need steemit to interact with the steem blockchain. There are plenty of sites that already offer different platforms to view content
Ponzi scheme: a form of fraud in which belief in the success of a non-existent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.
Notice you don't address what happens to a Ponzi scheme when there is actual value being created at the base level, not just obfuscated by the administrators at the top
Sorry i simply want to bring to community the exact meaning of a ponzi, i dont think Steem is actually a ponzi
Nice one @artakan keep up the good work!
This is why I encourage everyone to support the MinnowsUnite club because we will help retention of new users...
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It's a great chance for new users like us to get help and be a part of a great community
Joined the chat this morning, and looking at the links in your 2nd post now... Thanks for forming the #MINNOWSUNITE to help us newbies out!
Thank you for your support! @carlsalyer
I honestly have a hard time believing this man genuinely has given Steemit a thorough, objective review. It very much appears as if he reaches his conclusion either as a result of an inadequate understanding or based on prejudices. I can understand the cautious approach as a result of dubious coins in the past, but failing to acknowledge innovative advancements utilizing the blockchain... not so much.
But, hey, this is one individual and "a couple of serious altcoin traders in China". What matters is that Steemit holds massive potential for users both familiar and unfamiliar with cryptocurrencies (the latter is a rare treat in this market) and happens to be an extremely appealing channel for content creators. And, more importantly, users have been posting for years on Reddit without ever earning a dime - anything made through Steemit will ultimately beat that no matter the price. $1 is still $1 more than a lifetime on Reddit would yield.
It's a ponzi scheme only it steemit collapses, which io don't think it will. What do you call a succesful ponzi scheme?
Anything can happen in the fast changing cryptoworld.
A few months ago nobody would have seen a social media crypto called STEEM at number 3 of coinmarketcap.
And now look what just happend (;
Absolutely do not care how it works ! most importantly how many lives it can change ! , @artakan
How it works is fascinating, and yes I agree it can change a lot of things in the the way our society works. I highly recommend this talk by one of our poster boy https://steemit.com/steemit/@andrarchy/steemit-s-real-diabolical-plan-for-world-domination
@hipsterjesus successful Ponzi scheme example, I'm going to sell you a timeshare, which you can then sell to other people and make your money back and then some! Oh but wait, you didn't know the timeshare was in Hiroshima and is completely uninhabitable woops.
@artakan because they view btc being the beginning and that you cant divide money, what is trickle down and wait theres something beyond the model-T omfg mind blown.