Steemit is a SCAM??? Who ARE These People??? What are they THINKING?

in #steemit7 years ago

In continuing my initiatives to persuade new people to join Steemit, my efforts seem to get met with an inevitable dose of skepticism. That's somewhat to be expected... people are always skeptical of things that haven't been tried before, and things they don't really understand.

So this post is directly and indirectly addressed to all those skeptics who keep raising this one particular question... 

Oh, Steemit PAYS You to Create Content? It must be SCAM!

Oh, Reeeally?

Sunset
A very vivid late sunset

Seriously folks, the one thing I just don't understand is this notion-- which I have now run into repeatedly-- that Steemit "must be a scam" because contributors here are actually rewarded for their work. Further to that is the further implication that Steemit "must be a scam" because the rewards are in our own currency-- Steem-- rather than US dollars. 

"Well, if it's so legit, why don't they just pay in dollars? They must be hiding something!" they say.

So I wanted to take a deeper look at these concerns-- because maybe they are legititmate on some level, based on prior experiences-- and try to wrap some perspective around them. So let's look at some of the ways content creators and social media users put their work on the web

Writing Content for Publication and getting paid

The "getting paid" part bothers me really bugs me, as any kind of indicator that a scam is afoot.

ApricotBlossoms
Apricot blossoms

Let's say someone writes an article and The Atlantic Monthly or Time Magazine picks it up and pays the creator $500.00, that's definitely not considered a scam. In fact, you get congratulated on your "success."

Similarly, if you create content for a web site and they pay you $200.00, that is definitely not a scam-- it's considered "compensation for work done."

So the money angle just doesn't work for me.

Writing Content for Facebook and Social Media

At the opposite end of the scale, lots and lots of people create billions of pieces of content for Facebook, tumblr, Pinterest, WordPress, Medium and other places... and not only do they never get paid a single cent, but the service providers make huge profits from that content by selling advertising, customer lists and more.

But apparently this kind of "people's work being exploited for FREE" isn't considered a "scam" by the mainstream, either. Most puzzling.

Creating content for your own blog or web site

Then there's yet another option-- which I am personally very familiar with. 

EucalyptusBlossoms
Our eucalyptus tree in bloom

Yes, you can get paid for your content by creating your own blog, then spend years building a following, and then adding Google Adsense and Amazon affiliate links to your pages. As a result of which, you might end up with $30-40 a month in "commissions."

I've done it. I have the deposits to prove it. Let me also add that it is a lot of work!

Evidently, that's also not "a scam," in the eyes of most people. That's just "hard work and perseverance." Although... it does seem to become "a scam" when Google suddenly decides to yank your Adsense account because they almost arbitrarily decide they don't "like" your content, anymore. Or you "did something" that was against some small rule on page 453 of the user agreement.

Now, let's talk about Steemit

On Steemit, contributors get compensated for their content, as a result of being creative and their posts being rewarded through a process of peer curation. 

Seagull
A Lonely Seagull...

Yes, it's absolutely true that the rewards are paid in our own currency named "Steem," which is essentially a form of "digital money." For ease of understanding, think of it as an organization paying you in their stock, rather than with cash. Undeniably, it still has "value," but you can't just run down to the corner store and buy a sixpack with a share certificate.

There are actually benefits to the rewards not being paid in regular $ currency-- specifically that the fact that you can't just cash out and go buy groceries every time you have $5 serves to encourage contributors to keep their rewards as "SteemPower" and gradually become stakeholders in the Steemit community. 

Another benefit is that since the Steemit "treasury" isn't funded by dollars (or other cash), the platform won't just "go away" like many other user-generated-content sites before it, when they ran out of cash.

So how exactly is that "a SCAM?" It Isn't!

The argument is, most often, that Steem is perceived to come out of "thin air." That it's basically "Monopoly Money." So how can it be "worth anything?

Butterfly
The Blue Butterfly of Happiness

Let's take a closer look at that line of inquiry.

My best answer to that is "How can shares of SnapChat be worth anything?" The company may have millions of users, but they have yet to figure out how that translates into making any money, at all. SnapChat barely even generates revenue, let alone profits.

And yet, the value of its stock is held up by the belief of investors that "it has value." And that "it's something great," with the potential to have a major impact on the web 

Well, in a very similar way, Steem (the currency) is traded on "altcoin" currency exchanges and fluctuates in value just like shares of stock... and is mostly on the rise, because investors believe the Steemit social content site is "something" worth investing in.

And guess what? If you become a Steemit contributor who chooses to become a stakeholder for the long term... not only will you get rewarded for your content, you may also benefit from the price of Steem going up over time.

And that, my friends, is not going to happen with money you get paid for an article you wrote for a magazine, nor with your Google Adsense money and especially not if you keep allowing Facebook to make money off your content you are giving them for free.

And that last thing? The Facebook thing?

In MY world, that's the REAL "scam."

(All text and images by the author, unless otherwise credited. This is original content, created expressly for Steemit)

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I've been treating this topic as well. This is a new monetary paradigm. Even though it is naturally more intuitive, it is different than the established system, and so people have cognitive dissonance about this.

Gotta keep pushing!
upvoted
@shayne

Thanks @shayne... it is a new paradigm. And it will take time to gain acceptance. I'm old enough to remember when PayPal was a new thing, and people thought it was "a scam" and "unsafe" to send and receive money that wasn't tied to a bank or Western Union. Today? Most of the world's businesses take PayPal, and half the world's individuals have the PayPal.me app on their phones.

Patience!

Love this article!! I to run into skeptics, I will use this post for those that don't understand where the money comes from. Thank you @denmarkguy!!

Thanks for the kind words! It's too bad so many people are skeptical... but that's how it goes with new things. I am hoping people will use this article and others like to to help clarify things for potential newcomers.

I actually chose the first part of the title very deliberately as "search bait" for Google and the other search engines, for when people look for "Steemit is a scam" before joining... they'll possibly find this article rather than some grumpy member's complaints.

The general public does not understand digital currency and blockchain, or decentralization. Of course Steemit sounds like a scam. Just like Bitcoin and digital currency does. It seems like it's too good to be true. We have a long way to go before any of this is mainstream. Honestly, I think some financial disasters need to take place to force people to look for alternatives before they will really understand.

I agree... to a point.

One possible path forward is to emphasize "non-monetary" benefits to this technology. Steemit, for example, is also a great platform because it doesn't suffer from the arbitrary banning and account closing of YouTube, Google+, Facebook, twitter and so on. Aside from the issues of whether it sounds like "a scam" we can also point to the fact that transaction costs are much lower than other methods. For merchants, cryptos offer a way to perhaps gain a few more dollars from a few more customers... who tend to be quite loyal to establishments that accept BTC (For example, my wife and I are about to start accepting BTC at our art gallery).

I have also asked people to consider cryptos as part of "investment diversification," pointing to the way people made fortunes by investing in AOL and Yahoo at a time when the world regarded the Internet as "for nerds and for creepy pedophile stalkers."

Successful marketing is about "rephrasing" something scary with existing terminology people can actually relate to.

Do we have a long time till this goes mainstream? Yeah, probably. The idea of "everyone" having an Internet connection took a good 15-18 years. The idea of "everyone" owning a computer took about the same. Bitcoin is barely 9 years old; alt coins much less... so we probably have a good 5-10 years till "mass adoption."

Not one bit surprising that people think it is a scam.

I can barely get 2%-3% of my Facebook friends list to get that that Federal Reserve ISN'T a government agency or to understand how fractional reserve banking works, or any number of verifiable facts. Most people are plugged into the idiot box (TV) and brainwashed to a nearly hopeless state.

Really sad actually, like a bunch of scared caged animals

Oh, I hear you. The world is full of FEAR everywhere... we live in a fear-driven economy. People consume when they are afraid; they "buy into" what they perceive to be safety.

And nobody likes it much when I tell them a $100 bill and a Bitcoin are both intrinsically worth approximately ZERO (a small piece of paper, and a computer record)... and that the value lies purely in our belief and agreement that these things have "value."

Great post and good explanation. Most newbies must understand that ALL govt fiat money is virtual. Being able to pay my bills (among other things) with Steem make it tangible.

Yep... and hence once of the things we must (as a community) expand on is creating the economic ecosystem of Steemit. Steem shopping, Steem services and so on... not only will the fact that people are actually trading with each other lend legitimacy to Steemit, it will also help differentiate (super important, in the marketing sense!) Steem (the currency) from the explosion of other alt coins... by providing an actual "economic reason" for it's existence... most other coins don't have that.

And it's fun!!

It is tough to convince people of steemit and any cryptocurrency as being legit and not a scam...Its just as hard to tell people that fractional reserve banking is a scam....In time people will understand and open their eyes and wake up

@hotassyoga, you're right... but we're also in an emerging field, so skepticism is natural. There was a time when the world thought horseless carriages "would never catch on."

I have never taken the approach of calling fractional reserve banking a "scam," because it gets people's hackles up... and then their minds close to anything I have to say. Instead, I ask them to "explain money" to me... and gently guide them through a journey of "discovery" in which THEY get to conclude that a $100 bill is worth about 2c of ink and paper aside from this idea that we "believe" it is worth something. I don't even *mention" Steem or BTC... I go directly to people in Africa (I lived in Kenya, as a kid) using cowries as money. Which they have done for hundreds of years. Then, and only then do we get to the idea that money is merely a "temporary store of value" and money can be anything from engravings of Ben Franklin to Cowries to electronic tokens known as Steem.

It's time consuming, and I only "bother" with people I believe would genuinely enjoy it here, and would be assets to the community.

I think i will try your approach..I actually stoped trying for a little while because i felt like i was not getting through to anyone...But i will try it again in a new way.Thank you....But i wont force the conversation either

search for "The Great Steemit Debate" between myself and Tone Vays. He calls everything a scam, so I'm not sure it makes much of a difference what he thinks about it.

@blakemiles84, although I am not all that knowledgeable about Tone Vays, whenever I come across his name in some context, it seems he's always trying to tear things down. Philosophical naysayer... takes ideas apart. I mean, he was also trying to persuade Jeff Berwick that Steemit is "a Ponzi Scheme."

For me, trying to reach a quasi-celebrity's rabid followers is much harder (because their minds are already made up) than reaching individual skeptics and gently pointing them in a different direction.

I really don't understand why people think its a scam when you don't have to put your own money in... that is the amazing part to me. I have taken $3,000 dollars out and still have 2,800 steem on Poloniex. you don't ever have to put money in. lol

An important point, @peacekeeper. I haven't quite dialed in that angle, either... if you're not at risk then how can there be a scam? Also, Steemit doesn't promise to pay anyone (like an employer and working for a paycheck), Steemit merely offers the possibility that you might get paid.

The same people who will buy a lottery ticket every day of the week....will be completely paranoid about an opportunity like Steemit.

Yeah, it's like a partial cognitive blindness. Like people who go to casinos because they "can" win thousands of dollars, even though the house has the "favor" by a margin of 100-to-93.

Thank you for breaking it down. I have heard that line "why don't they just pay you in dollars". I hope steemit succeeds and everyone who contributes gets filthy rich in the process.

Patience is definitely important... there was a time when Bitcoin was less than a dollar. But that was eight years ago.

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