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RE: Is Bitcoin a Ponzi too? A Simple Explanation about Where Does Money Come From for Dummies
Perhaps you could point me to the place in the post where it says who buys Steem and why. That is what people mean by "where does the money come from". This post misses the mark on that, completely.
You are off the track. Demands are not the essential point of rewards. They are related to an expansion of Steem. Dilution and redistribution are the keys of reward system.
There has to be some demand or the price will instantly collapse to zero because some users will want to cash out their rewards or holdings and find no buyers.
You can't meaningfully redistribute something that has no value. Any analysis of such as system has to include the demand element.
@smooth Disagree. Demands decide the magnitude of rewards. If there is nearly zero demand, very small amount of money will be redistribited, still.
The money comes from people who have been (or are) buying/pumping Steem. But why should someone buy Steem? What is the incentive of a reader (upvoter) to buy Steem? If you open an account you get some free Steem Power, but there is no need to buy more Steem. If there is no need to buy more Steem, what will happen with the price? Is this system sustainable? I think this is a very interesting discussion and time will tell. Also Steemit is in beta and a lot things can change in the future. But I think you're right. The question: where does the money come from is not really answered in this post.