I'm still unsure about who pays for the content. I'll read the whitepaper today, but to me (new user), these posts aren't telling the whole story. Certainly there's a piece missing, but it seems like everyone is making money out of thin air. Where's the catch?
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Everyone IS making money out of thin air. That's the catch. There is no catch. Just like Bitcoin and the US Dollar, Steem springs to life out of thin air.
When 12.5 new Bitcoins are mined every 10 minutes, they just appear out of thin air. That's approximately $8000 of new Bitcoin being created ever 10 minutes or about 1.1 million US dollars every day. The price of Bitcoin doesn't go down every day because of the newly created Bitcoin because people want to buy the newly created coins. There is demand for the new Bitcoins.
The Federal Reserve does essentially the same thing when it creates new US Dollars. Only it's network of miners are the Big Banks who take the Dollars the Fed created out of thin air and loan it out to businesses and consumers who want it to buy goods. They demand the new Dollars to make purchases.
The only real difference between Steem, Bitcoin and the US Dollar is how it's distributed. Since Steem is distributed to people who earn it by by using Steemit. Since Steemit is a sort of feedback loop (the more Steem you have, the more Steem you can earn) demand for Steem is created. And like other currencies or coins, where there is demand, there is value.
This article only confused me more, bud your explanation makes it al understandable:P.
I'm glad you found it helpful and welcome to Steemit!
Can I ask you this: when I upvote someone's post am I giving them some of my Steem or is it being newly created? For instance, I currently have 0 Steem, a small amount of SP, and some SMD. I just upvoted your reply, and the $ didn't move at all. Is this because I have very low SP or because I have no Steem tokens currently?
When you upvote someone's post, or your own post for that matter, you are rewarding them with Steem Power (SP) and Steem Dollars (SBD) that will be newly created at the next scheduled payout. The amount of the reward your upvote is worth is based on the amount of SP you have.
For example, I have about 570 SP and when I upvoted your post just now, your reward jumped to $0.02 because of my SP. As you get more SP, your votes will be worth a bigger reward of newly created SP and SBD for posts you upvote.
@gregory-f: I liked your reply and tried to up-vote you. I have a huge amount of Steem Power and when I upvote people it is usually worth a couple of dollars to them. However, your balance didn't move. Is the reason:
Number 1 is mostly correct. You cannot give a reward to a post or comment that is over 7 days old. Actually the cut off for a reward is 12 hours before the 7 day mark.
Number 2 is a little correct, in that you have a limited amount of rewards available and every full power upvote reduces your voting power by 2%. You also recharge voting power by 2% every 2.4 hours. So if you only give out 10 full power upvotes every day you will stay close to full power.
You can see your voting power level here: https://steemd.com/@swissclive
You've given the best explanation i've read on this post. It's just simple.
Thank you!
Upvoting this because I wonder the same thing. When I upvote someone and say I had a lot of SP (which right now I have a new account) is that money that I am sending from my own account or is that being distributed from newly mined STEEM? Say I had a lot of SP if I upvote the hell out of everything am I essentially spending my SP? Should I be more careful in only upvoting the very best content? TY in advance for whoever can reply.
Upvoting everything is not a good idea. Steemit is designed for 20 upvotes a day. You could give up to 20 votes at full power and every vote over 20 would weaken the reward for all your votes. So voting for only the best content is better.
When you upvote someone's post, you are rewarding them with Steem Power (SP) and Steem Dollars (SBD) that will be newly created at the next scheduled payout. It does not come out of your SP.
gregory finally ,that was the answer i was looking for the whole day. Thanks man 🎉
Glad I could help.
This is very important and should be stickied somewhere.
I am also confused about this.
Sounds kind of like a ponzi to me.
Which one, The Federal Reserve or the US Dollar? Because if they sound like a ponzi, then you must have been listening very closely.
Only since 1914... ;)
But you need lots of electricity to generate BTC.
And it's not same, BTC is limited while $ printing is unlimited.
Limited or unlimited, all money is created out of nothing. Some just takes a little more effort or energy. In the end it is not how money is created that gives it value, it is people who are willing to accept it as payment for goods or as a value transport that give money value.
Almost all . But that could change if we tried a Mutual Credit System such as Local Exchage Trading System.
Nonsense. Money are assets that have REAL value. Like gold or silver. Those have value because of their rarity, the work it took to mine them and the use they have. ONLY Fiat money is created out of nothing. Even bitcoin takes WORK to create, so it can't be created in unlimited amounts like paper currency.
I do pay for my electric bills too but I don't like mining with a cpu
instead mining with my brain seems much more productive...and efficient.
steem it just use the ledger to confirm transactions and not to generate value.. is the short answer to your question.
Who pays? The Steemit system "pays". With what? With crypto currencies called "Steem", "Steem Power" and "Steem Dollars". If no one in the world cares about those cryptocurrencies then, its like receiving emails from a stranger that have no monetary value. But wait! Steem is now accepted by other people to trade with their BITCOINS...and Bitcoin on the other hand is now accepted by many people in exchange fo their FIAT monies like USD and EURO and many other products and services too. While "we" exchange our time, intellect, effort and other incidental things too,- for STEEM. So it's not really MONEY OUT OF THIN AIR. Its a system of exchange.
You too, can learn more and earn more, if you trade cryptocurrencies. if you would like you can even join us in our project.
-east
Steem is here to stay
I just invested in steem, may steem power be with you all :)
Steemit is showing how the future will possibly migrate to a 'different way of valuing something'. Essentially, money or currency as we know it (as a form of value-transfer) will no longer be the only form to 'recognise' value and then 'transfer' that value.
The blogging or written-word community has always had value, but fiat currency has been 'imperfect' as a medium to recognise that value and then transfer it. Steemit is a system that has been designed or tweaked to specifically capture the value from this type of community and then provides a pathway to ultimately transform it to bitcoin or fiat to use within a wider economic sense. BTC, fiat, DASH etc are what I call "Generalised Currency" where Steem is a specific one. An analogy would be the 'shopping car' versus 'the bus'. The shopping car is ideal to go shopping in, it's small, easy to park and very cheap to run but it holds at maximum 4 people. The bus on the other hand is the opposite of the car but it holds 100 people. They are both both modes of transport to move people around to meet their specific objectives i.e. those on a bus are dropped off at close to their approximate destination. Those in the car have a specific destination and can get much closer to their objective. We have lived in a world where only buses were available to transfer-value and 100% controlled by others (Governments & banks). That situation is now changing.
The value from products/projects like steemit come directly from those who use it (not governments or banks). Its value starts off at '0' but if it fulfills a need then value is afforded to it by that community alone. So basically, a whole lot of steem was thrown into a big pot and everyone was told to transfer it to others content (not theirs). At the same time a channel was opened up to traders to trade this steem money on exchanges if they thought it had value. So far they think it does because people are willing to give them bitcoin for it.
This is an approximation of what’s going on here. The future is going to be filled by thousands of these types of community valued products. This will not threaten the current financial system as some would have you believe. It will compliment it.
I think you are right, now that Steemit has shown that these communities have value and don't need some big corporation (which all started out as the same as Steemit was 4 months ago) to give it value and take all the proceeds for itself, we will see a lot more startups. If you look at the Steemit road map, there are already plans or visions to create many of these startups under Steem.
I'm brand new here; (as in yesterday) and am completely unsure of everything, but it seems to me that Steem arrives it's value out of the community of ideas, much the way the $ gets it's value from the faith in our form of government. The better your idea, or expression of it are, the more value it incurs ( think the U S government v. Zimbabwe, which issued a 10 trillion dollar note worth almost nothing).The more productive you are the more you should earn, as should be the case in any economy.
Thanks a lot for your info, i am new on this and yes it is a great time to live in! Good day people!
Still completely confused..... I converted 15 Steem Dollars into Steem and it did absolutely nothing... I have no Steem.
I looked at the history of splatterhaus' wallet and it shows a record of him receiving 15 Steem dollars but no record of them being converted or transfered to Steem. Yet his wallet reads 0 Steem dollars.
The dialog for converting to Steem says it will take a week. According to the history it has only been five days.
I don't know how I missed the 7 day wait thing... that's awesome, thanks for pointing that out Leprechaun!!
It has now been a week and I still don't see anything... am I jumping the gun and should just wait longer or.....?
Did you get it?
I think what you are questioning is, "how come I can trade my Steem for BTC?"
Well, because, much like the USD, people are willing to accept it as a means of exchange, there is a belief system.
Soon as that belief system no longer exists, there is no value in Steem. Much like the USD. The USD is only 'worth' the paper it is printed on. The belief system behind the face of that dollar bill, is what makes the note valuable. The belief and trust, that you can transfer it in exchange for another commodity, or service.
At least, this is how I see things. :)
Kind regards,
Optimistic