Yet Another Look at Steem Economics - The Easy Way

in #steemit8 years ago

Yet Another Look at Steem Economics - The Easy Way

Okay, there is already a ton of posts about this topic but it still seems difficult to explain with simple arguments how Steem can be sustainable, especially to outsiders. This post is here to change that, so here we go:



I'll make it really simple, I promise.

1. Speculation

Speculation with Steem means not only speculating that the price will rise. Buying Steem gives you a chance to speculate on yourself as an author or curator. Okay, we all knew that already, what about sustainability?

2. Can Steem generate revenue? Does it sell a product? - Yes it does!

Without a way to generate income while paying out participants, Steem would clearly be unsustainable. (And no, Bitcoin miners generating money out of thin air is not an argument. Bitcoin has in contrast to Steem a finite supply and moreover miners can be paid by transaction fees in the long run. Besides, Bitcoin is probably not the best argument to convince outsiders anyway.)

So what service does Steem provide? Simply put: EXPOSURE. On the one hand exposure to the attention of a huge community, on the other hand exposure to quality content and intersting authors.

2.1. Exposure to a large community

This can be interesting for economical (think advertisements) political or maybe even personal reasons. I expect that buying votes will become common practice and I personally believe it to be not harmful. Because of that reason you can expect a continued capital influx even if no new users are joining Steem - and that's why it is not a Ponzi scheme.

You can think of it like traditional television. Content creators get paid, consumers get free content and advertisers get their message out there. But it's on the blockchain now and anyone can participate in any of the three roles.

2.2. Exposure to quality content and its creators

Sure you can view all of Steem's content for free, but if you want to interact with the community or show your favourite content creator your support you have to buy Steem - join the VIP club, so to speak.

Please keep in mind that this post does by no means consider all economic aspects of Steem. It is just meant to show some quick arguments to convince even outsiders that Steem is not a magic money making machine (aka a Ponzi scheme).

Thanks for reading and Steem on :)

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I completely agree with u that buying votes is not a big issue. It will continued capital influx even there is shortage of new users. Nice post upvoted & followed you. Waiting for some love from you ;)

how are new sream coins created? how mmany nodes maintain the net?

They are mined. I don't know about nodes. Look it up it is probably on Steemd.

I liked the simile with TV. Yoy explained things in an easy to catch way.

Great post! I love seeing more like this (which is why I gave away a bunch of money in the #bitcoinpizza challenge). You make a really good point about bitcoin not being the best way to convince outsiders, but I do think the bitcoin pizza (10k bitcoins worth a pizza now being worth over $6.5M does get people's attention). Again, great write up. I agree, speculation should be at the top of the list. I'm curious how much of the price has already been priced in.

Thank you @lukestokes
True the Bitcoin pizza never fails to grab attention. But then again it isn't really an argument about the underlying fundamentals. Regarding Steem it is really difficult to make any predictions just because it is so vastly different from everything the cryptospace has ever seen. I guess we just have to enjoy the ride :)

Indeed! So many predictions are just silly because they can't possibly calculate the impact of a 2-year vested approach along with inflation and so much more. This thing is amazing and I can't wait to see what happens!

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Hi! This post has a Flesch-Kincaid grade level of 7.1 and reading ease of 70%. This puts the writing level on par with Tom Clancy and F. Scott Fitzgerald.

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