RE: Steemit Referral Program and Incentives.
As I have mentioned before, my biggest stumbling block when it comes to encouraging my family, friends and acquaintances to join the Steemit platform is being able to explain how the founders or anyone here is making the currency, we are all dabbling in.
At this point, I can't easily explain in under 2 seconds, who's pocket the currency is coming from.
It's one of the first questions that is asked as soon as I tell them that they don't have to "pay to play" on this platform. If it's coming from the bytes of information that are used to construct blocks on the blockchain, who is buying and paying for this?
The next questions are:
" What happens to the original content that I create? Do I still own it?"
I cannot answer these questions with confidence and certainty.
Perhaps I have missed this basic information. If anyone can share how they respond when these questions are asked of them, I would really appreciate any guidance that might be offered from anyone reading my comment.
I believe in Steemit and am happy to fill a role as a Steemit guerrilla marketer, but I require the ability to easily explain how it works accurately.
As far as where the money comes from:
1-When you post people vote on your content.
2-The votes earn you points. Those points are called Steem.
3-You can trade those points for local currency on an exchange or for merchandise on Peerhub.com or with a merchant that accepts Steem.
Think on how when you use a credit card you can earn rewards that you can later use to make purchases.
As far as ownership of your content:
You are the owner, Steemit Inc does not own your content. You can publish it somewhere else if you desire. However it cannot be taken off the blockchain. The bockchain is a public record of who created the content.
Thank you @zorg67.
I can explain the first 3 points, easy enough...
What I can't explain is:
Where did the currency come from to fund the whole thing from the beginning?
Was it only from Dan and Ned's pockets and a few of their closest friends or did it come from other sources?
How do the owners of Steemit make money from their platform?
People are looking for a catch and when I can't easily answer these questions I lose credibility and their interest at the same time.
Given he fact that Dan & Ned setup the network to begin with you can say that yes it came out of their pocket including all of the early miners & investors, then it took a life of it's own.
How do they make money? The same as everyone else...by selling steem.
The problem is that the general public does not understand that not only the government can create money (banks do it all the time but it would be a long and technical explanation on how they do it).
If they don't get the analogy about the credit card rewards then I am not quite sure what to say.
The piece about making currency from selling steem is the piece I was missing.
I can explain the benefits of buying crypto currencies as another form of storage for wealth. I just needed an easy way to explain how the founders are making currency from the platform.
The points are printed at a set and specific rate every day and then go into a 'rewards pool' that is distributed among authors and curators. For example 100 new Steem points are created on Christmas by the Steem blockchain and are then paid to Bob, Josie and Susanne. If they know Bitcoin, it's a lot like how bitcoin are created by Bitcoin to pay miners.
Also, it's not free money. You have to put in wok when creating a post, gain followers, etc.
It's an opportunity not a giveaway.
I had the same difficulty. When I finally figured out a way to say it in one paragraph using no crypto-terminology I wrote it down so I wouldn't forget.
https://steemit.com/steem/@baerdric/where-does-the-money-come-from
The second paragraph is so you can compare it to gold.
Thanks @baerdric. I appreciate your analogy of it being similar to physically mining gold and people who want to buy the gold already mined.
What I can't explain is:
Where did the currency come from to fund the whole thing from the beginning?
Was it only from Dan and Ned's pockets and a few of their closest friends or did it come from other sources?
How do the owners of Steemit make money from their platform?
People are looking for a catch and when I can't easily answer these questions I lose credibility and their interest at the same time. (These are the same questions that I am discussing with @zorg67.)
I have learned that if I don't give information that is simply enough, people won't even look into it.
Well, that's the thing to understand with all currency, even gold. There was no money to begin with. Gold was useless as a coin until someone wanted it but didn't want to go down in a hole to get it. The only value any currency has, Gold, Dollars, Steem, is that some people want it and it's hard to get.
You can't eat Gold or Dollars or Steem, but you can trade them for food. Since someone wants them (that desire came first, from speculators) we are willing to trade our effort (writing and voting, or digging a hole) for those currencies. We put in work that others didn't, and we trade it for work they did but we didn't.
That's the only value they have. It's the only value anything but straight barter has. If you trade me corn for eggs, we can both eat what we traded. They have intrinsic value. But we are still trading work we did for work we didn't do. The currency, that's just markers for work we did.
Steem is just another system of markers, the original mining is us writing and voting, it puts our work value into the electronic tokens (just marks on a spreadsheet). They gain that value, the value of our work. Poof, as if from thin air. But really from our work.
They are markers of our work, and other people, people who don't want to do that work, will pay us Dollars or Gold or in goods and services for those markers. There was no need to put money into the system (although some people did), so asking where it came from is fully answered by saying we worked hard for it and other people want it.
Let's imagine that we are both Egyptian slaves digging holes. You work hard digging but I have a sore back. So at the end of the day, you have a lot of extra marks on the sheet for holes you have dug, but I don't have any marks at all. I will probably get beaten. So I say to you, I will give you ten pounds of corn for ten of those marks on your page. Suddenly, those markers have a value. Only because you put work into them and I want them. Poof. You invented currency!
Thanks for your explanation.
I can't help but think that there had to be some value of some sort to originally start with. I have yet to read about a definitive answer. Was it created out of nothing? Or, was it backed by something originally.
People have been buying and selling steem, converting it to bitcoin and converting that to US dollars to use their store of wealth. My understanding is that this is done so that the individual can use their store of wealth without limitations, as the US dollar is still perceived as one of the world's reserve currencies.
Do you have an opinion on how you think the founders of Steemit are making currency themselves?
No, there's no original money. Except maybe their bill for the internet connection. They just said, "I declare a new cryptocurrency" and enough people wanted it that it became real. People were willing to work for it. Other people were willing to trade goods and services for it.
You and I could decide to create one right now. If someone watching thought we had the knowledge and skill to make it spread, they would want some. Poof. Now that they want some, it has value. That's really it.
The people watching, if they are smart, will want us to show that we know how to do it, so we publish, for instance, a whitepaper. A plan to introduce the currency widely enough so that someone might actually trade goods and services for it. If the plan works, the currency takes off, if it doesn't work, we sit around looking silly.
Now someone will come along and say, "Oh, they had to put a lot of their own money into it developing the backbone " or whatever. But that money was all to convince people to use Steem as a type of money. It was not required for Steem to be a type of cryptocurrency. It just helped it spread better.
And some people did buy large amounts of steem with real US dollars. I bought about $10 worth to see how it was done. But again, it wasn't necessary. Just being hard to get, and having people want it, that's all you need.
A really good example just happened yesterday. SteemTrail simply announced that they would be issuing Trail Coins. I had been watching SteemTrails for a little while and I made a guess that they knew what they were doing, so I said I wanted some. Poof. They have value, I am willing to do work to get them and some few other people maybe willing to trade work to get them back from me. Just like that. No USD$ ever changed hands.