How to Build a Steem Economy

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How to build a Steem economy(?).

This is as much a question as it is a loose plan that could some day, potentially, become a How To guide.

Here in Niigata, Japan, a small community of Steemians is beginning to form and come together. Naturally, we would like to see our community grow, and we would like to see the success of Steemit grow as well. Taking the Think Globally, Act Locally approach, I have been putting some time into thinking about how to actually develop a functioning Steem economy in the city where we live.

What better recruitment tool could we possibly build for the whole Steem Blockchain than an actual functioning economy where we can take interested (and often skeptical) friends to local establishments and buy them actual goods and services with our Steem Backed Dollars?

Wouldn’t that be great?

However, the question arises, without a quick and easy way to turn Steem and Steem Backed Dollars into fiat currency, how can we go about establishing an actual economy where our Steem and SBD have REAL day-to-day utility?

Here are some ideas that vary in practicality, and possibly legality as well, which I hope to pursue and possibly implement in Niigata with the help of other SteemCityNiigata members.

1. Trade and Barter

This is by far the most obvious and risk free of the ideas that will follow. It is straightforward and easy to imagine.

Steemians living in the same geographic region will most likely have a varied set of skills, equipment, and knowledge that can be turned into goods and services to be bought and sold. By developing a community forum or group (like @SteemCityNiigata), or by setting up and attending local meet-ups, members could easily advertise their skills and enter into trade and barter agreements that are negotiated in either Steem or SBD. (I recommend using SBD because it has maintained its peg fairly well for the past six months.)

For example, if you wanted your house painted, and the painter you wanted to contract had a Steemit account, you could pay him/her in SBD. If you needed an advertisement written for your small business or wanted to have family portraits taken, you could contract Steemians living in your own geographic community to do the work for you in exchange for SBD. Or, if a Steemian you know happens to be a farmer, you could trade SBD for actual food (which is something I hope to be able to do next spring and summer when vegetables start ripening again).

2. Act as a Guarantor

This could quickly become complicated, and invites a certain amount of risk, but it could also be a good way to convince businesses in your area to accept SBD for their goods and services.

Imagine this, a customer walks into a restaurant, buys a drink and a light meal, and transfers 15 SBD to the bar’s Steemit account. At the end of the week or month, the bar’s owner calls you and asks for $15.00. You go to the restaurant, give the owner of the restaurant $15.00, and in return, he transfers 15 SBD to your Steemit Account.

Obviously, the establishment you recruit doesn’t have to be a restaurant. It could be a bar, a coffee shop, a boutique, or even a bookstore. It could be anything really. The kind of establishment that participates doesn’t particularly matter (Although it might be best if it were an establishment that many people could access and easily use, like a restaurant, bar, or coffee shop). What matters is that SBD transactions are backed by a fiat currency of some kind and that real world goods and services are being traded for SBD.

For anyone acting as a guarantor, this could become an expensive venture to back. Instead of needing $15.00 on hand each month, you might need to have $1,500, or depending on the size of the community you live in, you might even need $15,000. It is hard to say how much money this would require up front, but the possible benefits of being an SBD guarantor, in regard to creating a functioning Steem economy, I think, are obvious. Business owners will be much more willing to consider accepting SBD for their goods and services when the SBD is backed by a fiat currency and the supply and access to that currency is guaranteed.

As business owners become more familiar with Steem and the process of converting SBD into the fiat or crypto-currency of their choice, who knows, maybe they won’t need anyone to act as a guarantor anymore. Maybe they will become their own guarantor and will spread the word about Steemit to other business owners.

3. Free Money for New Members

This is another approach that involves some investment and risk, and it is an idea that goes hand-in-hand with being a guarantor.

Imagine this, someone in your community has stepped up to the plate and has taken on the role of being a guarantor. Not only that, but this person has recruited four or five businesses to accept SBD as a form of payment. The Steem economy in your community is ready to start rocking. The only problem is that there aren’t enough Steemians in your community to get the ball rolling. Or maybe, there are enough Steemians to get things started, but none of them have enough SBD to buy things. It’s possible that there are ten new Steemians in your community, all of whom are excited about Steemit and want to participate in the Steem economy, but haven’t been able to earn enough SBD to buy much more than a cup of coffee every week or two.

To give people (both customers and business owners) a chance to see and feel the effects of a real Steem economy, why not give them some SBD to spend. How much and under what conditions would be up to you, of course, but here are four possible ways I can envision this happening.

1. You personally transfer a certain amount of SBD, say 10 SBD, to new Steemians in your geographic region with a welcome note and some correspondence asking them to use their SBD at specific businesses.

2. You form a community Steemit account (like @SteemCityNiigata) and use a certain percentage of the account’s posting rewards to fund a program that would give new members a signup bonus, which you would hope they would spend at participating business (businesses that you, or another member of the group account, have become an SBD guarantor for).

3. You, through your individual account or your community’s account, host exclusive (community members only) games and contests to distribute SBD to winners in your community, some of whom may not be established yet and may not be in a position to readily contribute to your community’s Steem economy.

4. You, or your community group, delegate Steem Power to new members so that they can earn curation rewards and build their Steem Power, which can be converted to SBD, more quickly than they would otherwise be able to.

4. BitCoin ATM

Lastly, since exiting with Steem and SBD to fiat generally means entering the BitCoin market, wouldn’t it be nice to have a BitCoin ATM near you?

For us, here in Niigata, having a BitCoin ATM in the middle of the city would be a dream come true. It would mean having immediate access to funds that are often either locked away or tied up in pending transactions. It would also mean that we would easily be able to demonstrate the real world value of crypto-currencies and Steem to interested and often skeptical parties. It would make building a Steem economy that much easier.

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How to build a Steem economy(?).

As I said in the earlier, this is as much a question as it is a loose plan.

In its question form, it is a question that I actively put to you: How would you go about building a Steem economy in the geographic region that you live in?

As a loose plan, it is something that I would love to get your advice on. What suggestions do you have for starting a Steem economy? And also, what critiques do you have of the ideas stated above.

Additionally, if anyone has experience buying and operating a BitCoin ATM, I would love to hear from you.

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As always, thanks for reading.
@boxcarblue