Explaining steem, steem power, and steem dollars to someone unfamiliar with crypto currencies
I think steemit is brilliant, but have been having trouble getting friends and family interested, mostly because of the fact that until now I've not had a good real world analogy for them to see how the getting paid part works.
The biggest hurdle in my family is simply explaining how things work in a manner that computes using their existing knowledge.
- They don't know crypto.
- They aren't system admins or developers.
- Their practical computer knowledge amounts to email, social media, google, ebay, amazon, and word processing.
They aren't stupid, but if you start using words like crypto-currency they are immediately (and understandably) lost.
I think my wife would do very well here (she if far more interesting than me to the average joe as she makes all kinds of beautiful glass and chainmail creations), but so far I have had no luck in getting her to post her tutorials on creating fused glass pieces, soapstone working, and chainmail design here.
Tonight, we had a long discussion where I tried to help her understand a couple of things:
- Why I believe steemit will be huge
- How steem, steem power, and steem dollars work
- Why posting them here and using my offsite links plugin on her site to let them show up for her followers (she admins a huge glass group on facebook) would be very smart.
Since she is from a lower upper class background (me, I was raised upper lower class), she understands financial concepts fairly well.
I did my best to explain things in terms she could understand and came up with the following using the excellent information in the following posts:
- Steemit V Log - my favorite of these
- Steem for Noobs
- Explanation difference beteween STEEM, STEEM POWER and STEEM DOLLARS
- Power Plant Analogy
STEEM - An inflationary stock with predetermined reverse splits
The unit of crypto currency, traded on exchanges, kind of like a stock on the stock market.
This is not meant to be held long term, but used to either trade for some other crypto currency or exchanged for steam power (powering up) or steem dollars. Can be used for speculation.
- Value determined on the open market
- Can be traded via exchanges for other crypto currencies such as bitcoin (which can then be converted to fiat currencies such as the US DOLLAR)
- Can be powered up to convert it on a 1 to 1 basis to STEEM POWER
- Supply doubles each year (inflationary)
- 90% of newly generated STEEM goes to those holding STEEM POWER, distributed based on percentage held
- 10% of newly generated STEEM goes to those voting on or contributing to posts
- reverse split of 10:1 occurs every 3.32 years
STEEM POWER - CDs that grant voting power but pay out over 24 months when cashed out
Kind of like a CD that (a) gives dividends and (b) extra voting power on steemit
- Received by (a) new STEEM being generated, (b) powering up STEEM, (c) creating content, (d) curating content
- Can be converted to STEEM over 24 months (powered down) on a 1 to 1 basis
STEEM DOLLARS - US Bank Account @ 10% interest
Designed to be a currency equivalent to the US Dollar, kind of like a bank account with a 10% interest rate.
- Tokens pegged to the US Dollar
- Exchange for an amount of STEEM that is equal to 1 US dollar (or close to it)
- Received by creating and/or curating content
- Received by trading STEEM for it
- Received 10% interest per year
After a long discussion, I think she is starting to wrap her head around it. Of course, I'm not the best at explaining things and it is hard for most people to get past where is the inherent value, which always prompts me to turn that question on its head and ask where the inherit value is in any fiat currency.
Yes, if steemit tanks and no one wants it then it will be worth nothing. Ten Million units of Zero is still Zero. Just ask anyone that has lived through hyperinflation )(or, as I call it, complete devaluation) of their currency.
I may well have some of the above wrong, but from what I've seen so far, it seems to be relatively accurate. If something in this is way off base please share!
By talking about the following and noting the extra information about each, I think she is starting to see how things work more clearly, provided of course that I wasn't way off track.
- Bank Accounts in US Dollar Equivalents for Trade ( STEEM DOLLARS )
- CDs that grow automatically ( STEEM POWER )
- Stocks ( STEEM )
Bonds might be a better analogy for STEEM POWER, but I'm not too familiar with them.
Anywise, hopefully this helps someone out there who tries to explain these things to someone familiar with bank accounts, stocks, and CDs.
Here's another approach I just thought of. Maybe try asking people to try it out, as a personal favor?
People like to do favors. If you just tell them it will help you understand and see if this thing really works, instead of trying to convince them of how if will benefit them, your efforts might be more fruitful.
Added benefit is that if they don't do well and decide to quit, they can't really blame you as someone who convinced them to waste their time.
A possible downside is that they don't try very hard to put out quality content. But I think any intelligent person who gets on Steemit and engages a bit will start to see the potential.
Always a good idea to simply rely on others respect for you! Some days I'm further off of the beaten path than others... Simplicity is always a solid way to go.
whenever i tell anyone they say it's 'too good to be true' lol smh!!! wish they'd get on here and give it a try to see what the heck i'm talking about haha
Me too.
I've tried to get a few people to post here: