​From where does the money come?

2016-09-01 02:52

The currency of Steemit.com is Steem. The value of Steem comes from liquidity providers, investors, and traders on exchanges. The network continually creates new Steem, and some of the newly-created currency gets transferred to users who add value to Steemit.

Steemit is a decentralized, incentivized content and curation ecosystem based on token seignorage with set and specific rules. The "money" at its core is like game tokens, distributed to creators and curators as rewards for successfully playing the game. What makes the system robust, is that the tokens, traded on markets, have a real-time value. The markets allow Steem Tokens to demonstrate their subjective value. This way, when one has One Steem Token, that person can know what the value of their token is worth to other people. It's similar to how someone playing a video game could obtain a rare item by playing the game. If they have the scarce item, then they could potentially sell it on video game item markets. Think of Steem as a game system for content, where the rewards people earn are video game tokens that have real market value and are readily tradable for Bitcoin and USD.

Further background for understanding is that Steemit is a website much like Reddit. However, it is different in that it pulls its information from a blockchain and cryptocurrency database called Steem rather than a centralized, private database. In this way, Steemit is also analogous to other blockchain-based businesses such as Blockchain.info, which pulls its data from the Bitcoin network. Regarding its difference from Steemit, Steem is a cryptocurrency and the blockchain database that rewards posters and voters for bringing new information to the community. It is an independent entity from Steemit. The Steem networks' awards paid to bloggers and curators is mining seignorage, and it works the same way miners are paid to secure the Bitcoin network. Rewards paid to bloggers do not come from Steemit Inc nor investment in Steemit Inc. There has been more than $3 million dollars worth of Steem tokens paid by the Steem blockchain to these creators and curators. Steemit does not and will not ever compensate the contributors of the Steem network for curating and creating content. Steemit is not a middleman to any of the blockchain processes, and the technology remains completely open source and transparent for anyone to audit and verify (Many software engineers are currently leveraging the open-source code to build their applications on Steem. There are more than sixty so far.).
Claims that there is somehow a scam or that money is from coming from new investment in Steemit are categorically false. Rather, the natural inclination of the platform Steem is to continue building and improving an incredibly exciting social media network that is decentralizing the value of the web and genuinely betters the lives of thousands of people around the world.

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