Yet Another Look at Steem Economics - The Easy Way

Okay, there is already a ton of posts about this topic but it still seems difficult to explain with simple arguments how Steem can be sustainable, especially to outsiders. This post is here to change that, so here we go:

I'll make it really simple, I promise.

1. Speculation

Speculation with Steem means not only speculating that the price will rise. Buying Steem gives you a chance to speculate on yourself as an author or curator. Okay, we all knew that already, what about sustainability?

2. Can Steem generate revenue? Does it sell a product? - Yes it does!

Without a way to generate income while paying out participants, Steem would clearly be unsustainable. (And no, Bitcoin miners generating money out of thin air is not an argument. Bitcoin has in contrast to Steem a finite supply and moreover miners can be paid by transaction fees in the long run. Besides, Bitcoin is probably not the best argument to convince outsiders anyway.)

So what service does Steem provide? Simply put: EXPOSURE. On the one hand exposure to the attention of a huge community, on the other hand exposure to quality content and intersting authors.

2.1. Exposure to a large community

This can be interesting for economical (think advertisements) political or maybe even personal reasons. I expect that buying votes will become common practice and I personally believe it to be not harmful. Because of that reason you can expect a continued capital influx even if no new users are joining Steem - and that's why it is not a Ponzi scheme.

You can think of it like traditional television. Content creators get paid, consumers get free content and advertisers get their message out there. But it's on the blockchain now and anyone can participate in any of the three roles.

2.2. Exposure to quality content and its creators

Sure you can view all of Steem's content for free, but if you want to interact with the community or show your favourite content creator your support you have to buy Steem - join the VIP club, so to speak.

Please keep in mind that this post does by no means consider all economic aspects of Steem. It is just meant to show some quick arguments to convince even outsiders that Steem is not a magic money making machine (aka a Ponzi scheme).

Thanks for reading and Steem on :)