I wouldn't mind some expansion on "where the money comes from" as far as into the rewards pool. Where does it come from in the block production process? etc.
Steem Power is created anew every 3 seconds. It doesn't exist prior to block production. In this regard it is similar to other currencies. For example, all Bitcoin (and Ethereum) is created out from nothing as part of the Bitcoin (Ethereum) mining process.
And USD are created from nothing when, for example, a bank issues a mortgage.
Let's say a bank loans you $100,000 for a mortgage. That transaction adds $100,000 to the money supply. No one's account is debited that $100,000. Poof! It just is. Many people are surprised to learn that that money didn't exist before the bank issued the loan.
Note, however, that the money comes as debt (on which you need to pay interest). Let's say over the lifetime of the mortgage, you end up paying another $90,000 interest. The really interesting thing is that the loan did NOT add the $90,000 in interest to the money supply. Basically, that means you need to get it from somebody else. This single fact builds scarcity into the whole system. It is astonishing how many of our current societal ills stem from the simple fact that all USD (and other fiat currencies) are created with debt. It creates a dynamic that leads to commoditization of capital, hoarding (positive interest rates basically reward people for hoarding money), polarization of wealth, etc. Even without any evil actors, the world monetary system creates scarcity by design. For a brilliant explanation of this dynamic, I'd highly recommend Charles Eisenstein's book: Sacred Economics.
This is a bad news / good news story. The bad news is that the roots of our planetary crises run very deep and ain't gonna be fixed easily. The good news is that the laws of economics aren't like the laws of physics. They are a human creation and therefore humans can change them. This is the deeper story behind cryptocurrencies. They are fostering an extraordinarily creative exploration into alternate concepts of money. What a great time to be alive!
I wouldn't mind some expansion on "where the money comes from" as far as into the rewards pool. Where does it come from in the block production process? etc.
Steem Power is created anew every 3 seconds. It doesn't exist prior to block production. In this regard it is similar to other currencies. For example, all Bitcoin (and Ethereum) is created out from nothing as part of the Bitcoin (Ethereum) mining process.
And USD are created from nothing when, for example, a bank issues a mortgage.
Let's say a bank loans you $100,000 for a mortgage. That transaction adds $100,000 to the money supply. No one's account is debited that $100,000. Poof! It just is. Many people are surprised to learn that that money didn't exist before the bank issued the loan.
Note, however, that the money comes as debt (on which you need to pay interest). Let's say over the lifetime of the mortgage, you end up paying another $90,000 interest. The really interesting thing is that the loan did NOT add the $90,000 in interest to the money supply. Basically, that means you need to get it from somebody else. This single fact builds scarcity into the whole system. It is astonishing how many of our current societal ills stem from the simple fact that all USD (and other fiat currencies) are created with debt. It creates a dynamic that leads to commoditization of capital, hoarding (positive interest rates basically reward people for hoarding money), polarization of wealth, etc. Even without any evil actors, the world monetary system creates scarcity by design. For a brilliant explanation of this dynamic, I'd highly recommend Charles Eisenstein's book: Sacred Economics.
This is a bad news / good news story. The bad news is that the roots of our planetary crises run very deep and ain't gonna be fixed easily. The good news is that the laws of economics aren't like the laws of physics. They are a human creation and therefore humans can change them. This is the deeper story behind cryptocurrencies. They are fostering an extraordinarily creative exploration into alternate concepts of money. What a great time to be alive!