I do not know yet whether Steem is a great idea, or a utopian fantasy, or an elaborate scam. I'm hoping it's a great idea.
But when I see Darryl called "shrill" and "pretentious" and "hair-splitting" for expecting real answers instead of cotton candy fluff, I have to lean hard toward it being one of the latter two.
The key question, as phrased by Daniel Imbellino at Medium:
"How does a platform that has no source of revenue of other than investors afford to pay out millions of dollars to its members when there’s no money coming in?"
Until I see a convincing answer to that question, I hope people -- including Darryl -- keep asking it or variants of it.
Apply the same logic to Bitcoin. Answer your own question then get back to us.
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Lots of people keep asking that same question yet it seems very few want to apply that logic. I tend to believe that this platform is starting to cause fear among the bitcoin evangelists. Bitcoin does not have to be the only revolutionary digital coin to come out of a revolutionary technology. In fact it will be replaced some day in the future by something better, faster, and easier to use.
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Well, I'm not a Bitcoin evangelist by any stretch of the imagination, and I firmly agree with you that Bitcoin does not have to be the only revolutionary digital coin to come out of the block chain idea.
I'm about as wary of Steem right now as I was of Bitcoin, say, five years ago.
As far as the question is concerned:
Bitcoin has value because its users have decided it has value.
Ditto Steem.
Move back on the tree a little bit to the origination ideas, though.
The investors in Steem are handing over a cryptocurrency redeemable in another cryptocurrency which people already believe has value. And what the investors are buying with what they hand over is the content on this site. Yet they do not seem to be monetizing that content in any way.
To put it a different way, at first blush Steem appears to be operating on an Underpants Gnomes profit plan.
I'm willing to believe that that's not the case ... if someone wants to provide a reason to believe that other than "I'm going to darkly hint that you're a frightened Bitcoin evangelist if you don't."
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Bit coin doesn't promise to pay out anything to users. If you send someone 1 bitcoin for goods or services, they get 1 bitcoin. Yes there is an emission schedule for miners to bootstrap currency distribution, but its well-understood.
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And that is all Steem does. There is an emission schedule for miners (blocks) and in time it will be well understood.
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It works the same way Bitcoin pays miners to secure the network --- seignorage of tokens combined with their market value, which is based on speculation
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Not exactly. The Bitcoin protocol allows a miner to create a coinbase reward for solving a block. That takes a lot of work, hence proof of work. When I upvote someone and hence, give them steem power, I did no work what so ever. I think THAT is the different twist that has people concerned. I literally give value out of thin air, no work required.
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For someone to write or up-vote a post there IS work required. Subjective work (e.g. content curation, AKA up-voting, and creativity) is work too. Steem supports rewards for subjective and objective work, and from a blockchain perspective, the token supply operations are analogous.
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I still use this explanation and it seems to work really well on newcomers that already know a little about bitcoin. It's super short and easy to understand. It's just prize money in a blogging competition instead of in a math problem-solving competition.
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The Bitcoin blockchain gives coins to those that calculated a hash. The Steem blockchain gives coins to those that wrote an article. Both is work.
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