Thanks for a simple explanation. It helped me to understand the platform. I have one more question though. Please clear my doubt about purchase.

Where does the Steem come from if someone purchases the Steem using BTC? There is a definite amount of Steem generated everyday, you said. And this amount depends upon inflation. But inflation is nothing but the loss of purchasing power of a currency with time, but if Steem price keeps rising then there would be no inflation.
For example it Steem reaches at $4, its purchase power is almost tripled from now, then it is not inflation right? Then won't these new tokens be generated? If someone wants to buy Steem from where would he/she buy? I guess the exchanges must be keeping the reserves of Steem.. hmm?