Question: Why will people buy STEEM?
On one hand, I have no doubt that Steem will be huge. Being paid for participating is awesome! I will prefer steem over any other traditional forum only for that reason. Also the quality of the conversations will be superior, because there is the incentive to produce something valuable instead of just ranting or arguing. This will bring in smart people, and smart people often have some money.
A big part of the STEEM/SBD will most likely be spent within the steem system. That’s where the value of the whole thing is the most obvious. However there will always be people who want to exchange their money to FIAT. That will put downwards pressure on the valuation, which will be countered by people wanting to buy some STEEM. Because the system keeps generating SBD:s out of thin air, there will always be more than enough selling pressure. So my question is: why would someone want to buy STEEM, if they can make use of the platform anyway? Where does the buying pressure come from? It seems to me there is some piece missing…
(disclaimer: I obviously own some STEEM, which makes my post a little ironic)
I started to reply to this, but it got so long I decided to create my own post.
https://steemit.com/steem/@dantheman/why-people-will-buy-steem
tl;dr - people will buy it because they speculate it will be a better currency, because there is demand to transact, because of advertisers, and for influence.
Thanks, that is an awesome answer to my original question! I also like the title.
I think this question is still a bit hard to answer, but it's an important discussion to have.
As I see it, there are currently two main reasons to buy STEEM:
Increase of influence
Buying STEEM lets you convert them to STEEM Power, which will increase your voting power in the STEEM ecosystem. Having voting power is very beneficial, as it enables you to gain more STEEM or STMD (Steem dollars) from curating content. In a way it's a virtuous cycle, as having more STEEM can give you more STEEM Power which enables you to earn more STEEM, rinse and repeat.
Price speculation
We've just seen the end of initial mining phase, so from now on liquid STEEM will become more scarce as witness rewards are paid out only as STEEM Power which means it can only be made liquid in equal weekly payments over two years. Furthermore, STEEM is still in alpha/beta mode, with no publicity beyond the Bitcointalk ANN. As the system matures, demand for STEEM should increase.
That's what I have been thinking too. However, speculation in itself is not a reason to buy anything, if there isn't some other factor to set a value in the first place. It's kind of a secondary reason - not sufficient in itself. That would leave influence as the primary factor in establishing any value, while speculation will push air into the bubble.
This is more like a bubble than bitshares, isn't it? In bitshares you must own BTS to make use of the platform, which gives BTS an intrinsic value. STEEM lacks this.
Now if I really think about it, I might indeed be tempted to get a few dollars worth of STMP just for the sake of downvoting potential BS and rewarding good stuff. And that actually gives STEEM some intrinsic value. That's funny. I never thought I would want any influence, let alone pay money for it. Maybe there are lots of others too who don't initially realize they want to exchange money for influence.
Now, suddenly, the business idea of steem starts to make sense. Actually, it might be brilliant!
I would like to point out one thing. There is no more STEEM creation by block production. The only way to increase the number of STEEM (a.k.a. inflation) is divesting one's Steem Power (STMP). So it will be a shift of influence from one to another.
If most of STMP owners is not willing to divest/sell their STMP, selling pressure will remain low.
Right, but without some intrinsic value in STEEM, this is a bubble isn't it? If lots of people vest their stakes it will be a very strong bubble :-)
Maybe I'm too afraid of bubble economics, as the whole FIAT system is a bubble too...
I think to buy STEEM is to buy a future possibility that if one day the Steemit social blogging site is to succeed, one would like to have the steem power to influence the blogs via upvotes/downvotes.
Think of it, you can essentially influence the masses' opinions.
Could you actually use voting power here to make money somewhere else? Like getting visibility for your own business or product by voting?
Again, when and if Steemit became popular, businesses would want to have a presence in it too. That is when voting power can translate into monetary value.