STEEM/STEEMIT: ....”where does the money come from?”

STEEM

In the nine months I have been on STEEMIT I must have spoken to well over 1,000 people about the concept.

This week alone I must have spoken to well over 300 people while handing out flyers in Manchester.

One question that keeps coming up, and is no doubt the most popular, is simply.... ”where does the money come from?”

This is the easy bit.

For New Users to STEEMIT I hope this helps explain in the most basic terms how the mechanics of STEEM/STEEMIT works.

To keep it simple, I have stripped back all the complicated bits and pieces and will try and explain it in the most basic form without any fancy "bells and whistles".

I am sure that there will be some that will attempt to pick at it, but what I am trying to get across is how I would explain it to a 12 year old.

Here goes.....

Think of STEEMIT as a small group of people each buying and selling bits and pieces with tokens called STEEM.

Now let's say some Investors want to buy these tokens called STEEM and begin to try and pour money into the pockets of the group, but at the same time the people with the STEEM tokens don't want to sell them.

When more money comes in than goes out, the chances are the price will go up.

At the same time should more money go out than come in, then the chances are that it will go down.

Think of it this way.

Let's say today the price of the STEEM token is say $1.00.

Now every day for the next year (356 days) New Investors want to buy these STEEM tokens and are pumping new money in at a rate of say $1m A DAY.

On other words for the next 365 days there is $365m of FRESH money wanting to BUY the STEEM tokens.

Now let's say at the same time that this FRESH money that wants to buy STEEM there is NOT ONE SINGLE PERSON who wants to either power down or sell their STEEM tokens.

What would the price be in a year?

It certainly WON'T BE $1.00..!!

On other words MORE money is wanting to PURCHASE the tokens than to SELL them.

As for the rewards that are being placed on each Blog, that it is simple.

It's a share of the difference +/- in the rise/fall of the value of STEEM.

Think of it as a BIG HOSE PIPE (Fresh Money) filling a tank with holes at the bottom which are the pay-outs/draw-outs.

If you plug the pay-outs/draw-outs and the HOSE PIPE keeps filling up, what would happen to the tank..??

I hope this helps.

As this was the MOST popular question that I was asked while I was out on the street talking to people, in the next few weeks I will work on a new flyer that will include a very simple picture of this.

In the meantime this is one of many slides I have published in the past and hopefully it will help explain the above a little more.

Once again, thanks for reading.

Stephen