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RE: Questions about Steemit and long term viability
"Where is the end consumer and what are they purchasing? The payouts now can be afforded because of the money that has been invested in steem power which is locked up and can only slowly trickle out"
I'm not sure if this is that different from when the Federal Reserve prints money, except that they do it whenever the feel like it and they make it out of thin air.
The currency gets mined and created at a controlled rate and recirculated throughout the economy (namely steemit.com)...eventually elsewhere.
Well my overall point there is no one is really purchasing anything since everyone expects to make gains. People who bought up steem power bid up the steem price and then took that steem off the market. So today's contributors are able to earn rewards because of that. But the steem buyers are also expecting rewards in the future, and that can only be paid out if others continue to buy steem power.
You have to remember, though. A lot of Steem Power is created automatically in the system without anyone having to buy anything. Curation and writing both creates Steem Power, regardless if someone chooses to invest out of pocket.