Steem? Steem Dollars? Where does the money come from?

in #steem6 years ago

Have you ever wondered... Where does the money come from every time we receive an upvote on one of our posts or when we give one? It has to come from somewhere. It does not grow on trees as my grandfather would say...

What gives value to the Steem and Steem Dollars cryptocurrency?

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Where does the money come from?

Steemit does not earn money through advertisements or selling your personal information (of the members), as Instagram, YouTube, Facebook and many others do. That makes us think... Where does the money come from? All these questions and much more will be answered in this post.

Steem is the cryptocurrency created and distributed by Steemit to the members that contribute to the growth of the social network (either by receiving upvotes for the publications that they have made or by the upvotes given to the posts of the other users of the community). The value of Steem Power (SP) is derived from the Steem as of the Steem Dollar (SBD).

Steemit creates new Steem tokens daily, of these, 25% are distributed to people who own Steem Power and the other 75% is used to pay people who receive upvotes through their posts within the social network, as to those who upvote.

Steemit is a social network that allows you to earn cryptocurrencies every time you upload a post to your blog and it is upvoted by the other members of the community. There are also other ways which consist of upvoting the publications of the other members of the platform, this is known as curation.

The most surprising thing about these cryptocurrencies is that you can get them without having to invest money; instead, your investment is based on the time you spend in each of the publications you upload to the website. That means that the most important asset Steemit has is the time and dedication that the users invest on each of there posts.

Steemit works based on the technology of the "Blockchain", for those who do not know this term, it refers to: a platform that stores the chains of blocks that are associated with each other. It is considered a decentralized technology because transactions can be made without the need to have an intermediary. I mean... no banks or governments...

The following image summarizes how the Blockchain works.

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How does the Blockchain work?

Now lets talk a little about the Steem Blockchain, this is characterized by being an accounting book that registers and stores all the movements of the blockchain, all transactions made in the purchase and sale of these cryptocurrencies are stored here, safely and optimally. For this to happen, Steemit has a group of users who are responsible of validating this information. The witnesses are in charge of mining these blocks of information through complex calculations (which are becoming increasingly complicated and require more work to complete each block as the days go by).

The witnesses are so important within Steemit, because they are responsible for improving the functioning of the social network and its content. They are considered as leaders within the platform because of the role they play within it.

These cryptocurrencies are considered to be limited digital goods; the price is determined by the offer and demand of it. This is influenced by the market. The rise and fall will depend on the number of establishments that accept Bitcoin (its value directly affects the Steem and the Steem Dollar, as well as the rest of the cryptocurrencies), the variety of use that is given to them, the modern problems they can help solve, and many others.

That is why we can say that if the value of Steem increases or decreases, its because of the offer and demand of the market. This also can affect in a positive or negative way the power of the upvotes granted or received in each of the publications.

I hope this post has given you an idea of where the money of Steem and Steem Dollar come from.

Do not forget to upvote this post if you liked it. Comment, resteem and subscribe for more articles like this one.

Until next time.

@christmartinez

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they need to get rid of one steem or steem dollars i dont see the point in having both

And they're concepts a little complicated for people like me who knows pretty much nothing about it

Hello @cryptoslicex. There could be a probability that they do that in the near future.

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