As many of you know in cryptoland, as soon as something goes wrong and even near the inception of Bitcoin the words SCAM gets thrown in. It's a great word to trigger negative feelings and put the person promoting whatever they are promoting on a back foot in a defensive position. When Mt Gox died everyone said Bitcoin was a scam, when the price of Bitcoin went up to $1000 it was called a scam. The list goes on...

You can argue that FIAT currencies, pensions, taxes, working for a company are all scams. At some point they will definately collapse and something new / similar will take its place. They are a separate issue, and of course you can argue that Steem is a scam. E.g. the owners have made lots of money, early adopters have made lots of money, if you have boobs you make lots of money etc.

Lets create some unbreakable defense for Steemit and stop the lazy word of scam being thrown around.

Here is the definition of a pyramid scheme and how Steem does not apply to it, as taken from https://www.sec.gov/answers/ponzi.htm - What are some Ponzi scheme "red flags"?

• High investment returns with little or no risk. Every investment carries some degree of risk, and investments yielding higher returns typically involve more risk. Be highly suspicious of any "guaranteed" investment opportunity.
  There are no guaranteed investment returns with this platform, as I have found myself I invested around a Bitcoin but the value of Steem has been declining. Long term who knows where the price will go.

• Overly consistent returns. Investment values tend to go up and down over time, especially those offering potentially high returns. Be suspect of an investment that continues to generate regular, positive returns regardless of overall market conditions.
  You could argue that whales who invested early will always have high returns but the inflation rate within Steem and even in Steem Power (VESTS) will eventually erode their capital unless they are active on the platform

• Unregistered investments. Ponzi schemes typically involve investments that have not been registered with the SEC or with state regulators. Registration is important because it provides investors with access to key information about the company's management, products, services, and finances.
  You can register your investment on the immutable public and transparent blockchain which can be queried by anyone, if you have trouble with this you can hire the services of an expert who can do this for you. The company's management, products, services can be found with some simple Google-Fu, as for Steemit and Cryptonomex finances, I'm not sure about that as I am not a US citizen so their accounts may not be publically accessible.

• Unlicensed sellers. Federal and state securities laws require investment professionals and their firms to be licensed or registered. Most Ponzi schemes involve unlicensed individuals or unregistered firms.
  The best cryptocurrencies are decentralized and unlicenced

• Secretive and/or complex strategies. Avoiding investments you do not understand, or for which you cannot get complete information, is a good rule of thumb.
  Using a forum or social media platform is hardly secretive or complex, if it is please take some IT lessons at your nearest school or college.

• Issues with paperwork. Do not accept excuses regarding why you cannot review information about an investment in writing. Also, account statement errors and inconsistencies may be signs that funds are not being invested as promised.
  The whitepaper is available to all, and your activity is also available to all

• Difficulty receiving payments. Be suspicious if you do not receive a payment or have difficulty cashing out your investment. Keep in mind that Ponzi scheme promoters routinely encourage participants to "roll over" investments and sometimes promise returns offering even higher returns on the amount rolled over.
  You can cash out Steem Based Dollars to an exchange at any time, you can also power down at anytime. The power down is spread over two years to slow any bank runs and collapsing the entire economy to zero. The arguments for and against this could go on for millienia but if you think about any asset where everyone sells at the same time, that asset will go to zero, I think in essence it is a good idea but would prefer a shorter timeframe like 3 months

Other attacks to prevent

• Steem is not Proof Of Work as originally described by Satoshi in the Bitcoin whitepaper
  There are advantages and disadvantages of either POW or POS, ethereum will eventually implement POS and here are is an in depth explanation from Vitalik Buterin https://blog.ethereum.org/2014/11/25/proof-stake-learned-love-weak-subjectivity/

• You will lose any money you invest
  I have myself invested just under a Bitcoin and the value of the Steem Coins have gone down, I could easily have not invested any money / Bitcoin at all and still use the platform. Investment is entirely optional, and the value of the coins may go up or down

• Steem needs lots of people to give it value
  This is the same as any asset or item

• Steem and Steem power is centralised and unequally distributed
  The founders and whales are trying to give back to the community and coming up with ways to spread the wealth and give valuable content more exposure, there is no overnight solution otherwise it would already be done here or elsewhere

• Steem are trying to Peg to the US Dollar
  This gives the coin something quantifiable / measurable to the general public who are not involved in crypto, 0.5 Bitcoin doesn't mean a lot to them and the US dollar is more understandable to the average person. I will do another post on pegging in the future

Conclusion

The above is my opinion, interpretation of facts are subjective, statistics can be presented in a way that promotes one argument over another. It's good and essential to get many different viewpoints and also to question everything you are told. Making decisions are a personal matter and a difference of opinion makes life interesting.

Please help with comments and additional defenses for the Steem platform