All stocks are Ponzi schemes. Yes sure you are calling a company valuable thus raising it's stock price but, until the next sucker comes along who's willing to pay that price.. it means nothing. So ultimately all stocks are a Ponzi scheme.
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Nope a stock is not a ponzu scheme and steem is not either.
I am sick of people that cannot understand how things calling them Ponzi schemes, so they can sound smarter than they are.
Ponzi scheme: middle man takes person B's money and gives it to person A and calls it "earnings." Stock market: middle man takes person B's money and gives it to person A and calls it "earnings." Please explain the difference to me. No hatred here...I wanna learn.
I think you are right in a way. If we are not strict with the definition of a Ponzi scheme, a lot of things can be classified as Ponzi.
People who call Steem a Ponzi are in fact implying that stocks and other crypto-currencies (including Bitcoin) are also Ponzi. Which obviously does not make sense.
When you buy a stock in company (or a Bitcoin token), you do it because you assume that in the future there will be someone else who will buy it from you at a higher price. So yes, the financial outcome of your current investment depends on someone else making a new investment in the future. If we treat this as a valid symptom of a Ponzi scheme (which is wrong!) then yes, most financial instruments (Steem included) are Ponzi schemes.
Agreed. Or if we were in a brokerage industry and didn't want to get into legal trouble we'd simply point out they are 'speculative investments'. Same difference.
@gmalhotra " Where does the money come from? Obviously from STEEM and Steem Power holders"
please again give little more attention to the above sentence which @clayop written in his post and most easy sentence at the end in conclusion is that Steemit platform that rewards content creators and curators through redistribution.
So in Steemit you only get your earning through contents rewards,curation rewards in distribution and redistribution.
I think @gmalhotra has a good point which I explain in my reply to him/her. No need to bash people for asking legitimate questions.
In a Ponzi, person B still has a claim on the money, despite it having been fraudulently distributed to A.
When company earns profits from customers (B) and then gives those profits to shareholders (A), B no longer has any claim on the money.
That is the difference.
Now it is possible that some companies are indeed Ponzies, where earnings are nonexistent or overstated, and money from other investors is misrepresented as earnings, but that is not the general case.
Look no further then into your back pocket and pull out one of them crisp bills And ..Voila the great note of the Federal Reserve. The biggest Ponzi scheme ever. So big even Charls Ponzi him self would be in shock that they pull the wool over the publics eyes on this one. It makes me laugh when people say steemit is a scheme, yet they rely on the fiat currencies of central bankers.
I say if it's got trust it has purchasing power.
absolutely @knircky say right, the people who think or comments that stock or cryptocurrency like bitcoin or Steem is ponzi actually jealous or the people of third party like ponzi,scam and hyip schemes.
Definitely am not jealous. I wrote this: https://steemit.com/ponzi/@gmalhotra/ponzi-vs-stocks-vs-bitcoin-vs-steem-my-opinions
Its a full explanation of my views... If you care to read it. Just trying to create a healthy dialogue... No jealousy :)
@knircky Thank you i'm tired of the nonsense too
A stock has real value due to the earnings of the company. As a stock holder you hold a real part of the company. You share in its profits through dividend or stock equity growth. In no way is this a ponzi scheme.
I agree that when a stock pays dividends it's not a ponzi scheme because you are getting a cut from the companies profits. But for"non-dividend" in the so called "growth stocks" the money comes from other people. Yes there might be a product that company is making but ultimately the "growth stock" is growing because someone other than the company is willing to give you money for it because they expect someone else to come along and pay them more ie ponzi.
I have had this conversation with a lot of "financial people" who always seem to get annoyed and state..."but the stock is growing because the company is doing well." I would buy that idea only if the price of a stock was directly tied to its companies profits. Yes for the most part this happens but enough times in history (Enron?) this has not been the case.
This "money being handed down... In the hopes of ever increasing 'value'" is the same thing that happens with every cryptocurrency (bitcoin, litecoin, ethereum etc.) before steem. I think people musunderstood my point...I am in no way talking about steemit. Here the investors money is used to turn writers/curators/users into investors themselves. It's an amazing take on the entire situation. But one that without new "real money" (read fiat) will continue to lose value.
I guess my point was just create a dialog around ponzi vs "growth non-dividend stocks"/bitcoin vs steemit
In no way did I mean to offend anyone.
Full disclosure I own "positions" on bitcoin, ethereum, lisk, dash and a few others...So I have definitely bought into the scheme!
But there are some people who simply hate capital market and do not distinguish.
It is an attitude, nothing reasonable and it can not be changed.
And, i just got a negative vote for my opinions... Ridiculous
And then you got an up vote.
Companies usually have a business model. They produce something that a target market will pay for.
Steem's only source of money flow is the investors themselves, and the invested money is distributed between content creators (and other rewrad earners) cashing out, the founders and early birds cashing out, and yet the investors expect to get at least as much money out of it as they invested (otherwise, what's the point of investing?).
So more money is flowing out of the system than into the system, unless they balance this by constantly increasing the number of new investors.
Unless of course, investors are not in it for the returns. They accept that their investment will be distributed and they will actually lose money. But in this case, steem is either an over-complicated tipping platform (assuming investors are generous like that), or a glorified advertising platform (assuming investors are not just tipping out of generosity).
Steem has a business model. Just like Bitcoin.
What business model? Bitcoin does not produce anything. It is free, so it does not have earnings. It is a currency, or a open source bookkeeping platform. Steem can be a currency, too, but I suspect the high built-in inflation rate will hobble it as such.
That said, I think Steem works just fine for content curation. The model is quite ingenious, and could eat reddit's and hopefully even facebook's lunch. Just don't expect them to convert into hard cash forever.
Bitcoin is not free. Don't forget the fee.
That's the economic innovation that crypto-currencies have introduced: you don't need to have a profitable (in accounting terms) business model to be able to survive. You stay sustainable by expanding contentiously.
This very feature makes people think it's a Ponzi, but it's not. The key difference preventing crypto-currencies from being a Ponzi is the fact that the outcome of their existence is perceived as valuable - you can't say this regarding a regular Ponzi.
The point is, Bitcoin (or Ethereum or any other major crypto-platform) faces exactly the same problem as Steem: they need to contentiously expand to remain sustainable. Having transaction fees solves nothing and it just a hindrance for the user.
@orly has it nailed, I think. Steem can only have value if people buy it. It cannot have value from being handed out for posting, curating, mining, etc. In the long run (other than speculation), the only reason people would buy Steem is so they can distribute them amongst content creators. This amounts to paid speech, aka advertising.
Upvoted solely because I disagree with whoever flagged your post and wanted to balance that. I don't agree with it or think it adds much value.
If anyone cares: https://steemit.com/ponzi/@gmalhotra/ponzi-vs-stocks-vs-bitcoin-vs-steem-my-opinions
I wrote that as a full explanation of my views.