RE: Is Steemit a Ponzi Scheme?

You are viewing a single comment's thread from:

Is Steemit a Ponzi Scheme?

in steem •  7 years ago 

I found the reason - to keep ability to vote and write comments:

If the user does not earn or buy enough Steem Power, then their Steem Power will gradually decrease (as a fraction of all the Steem Power existing within the system) and eventually (even if it takes waiting until market saturation of the platform) they will no longer be able to use the platform (as in post, comment, vote, transfer money, or anything other than only read the content on the platform). So to continue using the platform, they must maintain a sufficient fraction of their Steem Power holdings. Fortunately using the platform at its most basic level without terribly restrictive bandwidth quota limits does not require the user to hold a very large amount of Steem Power in dollar terms. Nevertheless, they do need to continue to maintain at least that minimum amount of Steem Power to be able to reasonably use the system, which means that if the user cannot earn (e.g. through content and curation rewards) that minimum amount to counteract the less than 5% per year effective tax on their Steem Power and thus maintain economic status quo, they will need to buy more STEEM (and power up) every year. This effectively amounts to a subscription fee to use the platform. And that is the reason why the platform could theoretically continue to operate indefinitely even after reaching market saturation. Now whether it actually does so or not depends on many factors, but I think the most critical of those factors is whether people would be willing to pay that effective subscription fee (in the form of a less than 5% wealth tax on their Steem Power) to continue using the platform.
https://steemit.com/steem/@arhag/where-does-the-money-come-from-a-look-into-the-economics-of-steem

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!
Sort Order:  

It's a trade-off between using another site like Reddit and seeing Ads OR using this site and buying Steem Power.