"Where is the money on the Stemmit platform actually from?" -- Let me try to answer this question

Many newcomers keep asking the same question, as I did some time ago:

Steemit platform issues new STEEM and SBD every day, but, where the money come from?

After hanging around here for a few months, it seems like I came about to realize something. Something that I totally did not understand when I was the first time here.

I would like to try to answer this question, by "sketching" a broad picture (correct me if I am wrong). What we are going to discuss here is actually not about money alone, but more importantly, about VALUE.

Step out from the conventional thinking

First of all, why that question become a question? This is an interesting question to think about.

I now realize that when I asked "where the money come from," there are some assumptions, or models of thinking were playing in my mind, which contradict to what was going on on the Stemmit platform.

This was what I thought when I was asking that question:

Let Stemmit be a something like a corporation. It must first possess some forms of assets to run the business. It distributed its wealth to those content contributors, at the same time it run some kind of activity to keep its wealth growing. So the STEEM token that we get and traded played the same role the company shares did. So I guess that there must be something like IPO or ICO at the beginning to create the "reward pool."
But now I have a rather bigger question: How can a company keep issuing new "shares"?

See, I had been locked up in the frame of the conventional economic system which we are so familiar with. And the idea is completely wrong.

Where is the value of money from?

So, what is actually going on in the "money production activity" here?

I try to use some plain language (this is the only language I can use) to describe what I came to understand.

The first question, also the most fundamental question is: Where is the value of money from?

I am sure you can have a lot of web sites giving you answer in more professional and technical terms. But let us simplify it.

The value of money derived from social consensus. No matter it takes the forms of shells, or metals, or paper notes, or cypto-codes.

We believe the United States Dollar carries value, didn't we? We believe that gold has great value. But pragmatically is gold more useful than, say, wheat? But the world agrees that gold is valuable so that we can exchange gold for a lot of wheat. The same goes to bitcoin and other cryptocurrencies. Scarcity plays a role as well. Scarcity can come from limited resources (like gold), from monetary policies (like all fiat currencies), or from programming codes (like bitcoin).

Ok. Then we throw that money into market place, and now we can take another perspective to view money as a form of commodity carrying value. And the orthodox economic story of supply and demand come in, price is attached to the valuable thing and started to fluctuate based on crowd consensus. We are just too familiar with those stories.

So, what we come to understand now is:

Value is an abstract thing. Cultural, historical and political factors played together to create value.

From a materialistic point of view, it seems like value can emerge from, just nothing. The so-called value does not necessarily to be pegged with any forms of real world (i.e. material or physical) assets. Furthermore, even if a kind of crypto coin is pegged to, let say, gold, then the value of gold is still an abstract concept. If we dig deeper into this point, then it will become a philosophical question.

Contents make STEEM unique

Till here, the question at the beginning of this article is partly answered:

This system, the blockchain, the Stemmit platform, create STEEM and SBD every second, from, just nothing. So it does not need to gather other forms of "real" assets to start a pool and then give away some value of such assets as the reward for us.

But there is ONE thing that makes STEEM a unique and even more valuable currency:

Technically, the value of STEEM is indeed derived from something. We all know that we put in effort and mental energy for content creation, and these are the source of the value of STEEM as a currency. This is something even more real than any tangible asset.

STEEM in the market place

We believe that the contents we created are valuable. Hence STEEM is valuable. Now, you move the STEEM tokens you are holding to the market, and there will be someone who too, believe in the value of STEEM, or someone who has confidence that the Steemit community will be strong enough to preserve the value of STEEM in the future. Then, he probably will buy some STEEM using other forms of money. Market mechanism is formed, and that particular buyer engaged in as a stakeholder of this monetary system. As a stakeholder, one can be a member of this community as a content creator, or just stay outside as a crypto coins holder, or as a speculator, or as a user (use STEEM to buy other things, maybe in the future).

When the population of stakeholders becomes bigger and bigger, that means there will be even more people come in and put effort to create contents, or using other forms of money to buy STEEM; at that time, STEEM as a currency will carry even more "solid" value.

So, our premier goal is community engagement

So, yes, we may come to a temporary conclusion:

The value of STEEM come from content creation on the blockchain.
The preservation and even rising of the value are direct results from the strength and engagement of Stemmit community, as well as the quality of Steemit (and other application on the blockchain in the future) as a social platform or as a content provider.

Those big guys here always say that our premier goal is community engagement. Now we can appreciate this kind of advice because we come to realize that the community engagement and the quality of social platform are direct factors to the ultimate value.

Lastly, from here I think of an interesting picture:

If you view the wealth of the world as a whole closed system, then, when someone buys STEEM from the market exchange, he is actually buying our contents. Because the value of STEEM emerge from the contents, and he pays for it. Now imagine that STEEM adoption become more popular and the tokens finally become one of the circulating currency. He, or any of us, might use STEEM to buy bread. So what is happening now? We are converting our spiritual energy for physical food, directly, even without fiat currency.

It is an exciting model of the world, right?

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• I am Mingh, @ygern.

• I am an editor (in a non-English environment).

• I truly believe the value of content, so I have strong confidence for Steemit. I really put in the effort and will continue to do so to create content for community sharing.

• Please help me to involve more in the community by following, upvoting, commenting, or resteeming my posts.

• Thank you for reading.