Steem's not a scheme
Some people try to tell me that Steem is a Ponzi or Pyramid scheme.
I tell everyone that will listen to use Steem as a network and currency. Most people I talk to have never heard of Steem and barely know what Bitcoin is.
Those who have heard of Steem either love it or think it's a scheme.
Let's define these schemes first.
A Ponzi-scheme:
A fraudulent investment operation where the operator generates returns for older investors through revenue paid by new investors, rather than from legitimate business activities or profit of financial trading.
https://en.wikipedia.org/wiki/Ponzi_scheme
A Pyramid-scheme
A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products or services.
https://en.wikipedia.org/wiki/Pyramid_scheme
Steem is not a Ponzi-scheme.
With Steem an investor is anyone that has a Steem account or anyone holding Steem.
Steem becomes more valuable with demand. If more people want Steem the value goes up.
Demand is really the only thing that gives Steem value.
This demand/value is due to the fact that Steem provides an open platform that many people consider a good option for blogging, social networking and financial transactions.
Essentially every Steem holder is a stockholder of the Steem company except for the fact that Steem is a network and not a conventional company.
Steem is not a Pyramid-scheme
While it is true that older Steem holders benefit from new users, Steem holders are in no way required to recruit new users in order to earn on their investment.
An early Steem investor will earn money because his Steem becomes more valuable with every new user regardless of wether or not the investor is the one who did any recruiting.
Just as with stocks, the value rises with demand and early investors gain large returns.
Other thoughts
In my opinion Steem is a solid currency and network that I have long term faith in.
Unlike Bitcoin, where those with the most expensive equipment are paid to run the network Steem uses what is called "witnesses" to run the network.
Witnesses are people running a server that hosts and creates the blockchain. The blockchain is the database of the Steem network.
The witnesses with the most valuable votes are the ones that end up getting paid for their service of running a "witness node". This gives Steem users more control over who runs their network and how the rules of the network will change.
I am a decentralized networking enthusiast running a relatively new Steem witness node.
Vote @camb for witness so that I can contribute my resources to securing the Steem network for us all.
I would agree its not a pyramid or ponzi, but I think its more closely related to a Multi-Level Marketing Scheme.
It has many levels, and you are encouraged to do different things at diffierent levels.
Newbies/Minnows = Comment and grow an audience.
Dolphins/Orcas = Write content.
Whales = Curate and get rewards based on the content of others.
Each level essentially benefits off the work of those below it. You can't just come in as a minnow and start writing great blog content, it'll rarely get discovered or encouraged. You have to play the game to some degree, which makes Steemit less powerful than it could be.
You're right that new authors will find it difficult to be discovered. This problem is the same on any other social media platform I have found. I wouldn't call it a MLM more of a social attention issue.
It's not impossible to be discovered quickly however and quality content will gain more followers than the less useful posts.
Most Steem users join to use and create a network that is more fair and open than the advertising based networks we have become accustomed to lately. Together we can form a strong network.
What suggestions do you have?
Made an entire post dedicated to improving the discovery features of Steemit.
Steemit incentivizes quick, ethereal content because it vanishes so quickly. The only content that lingers on the Trending page tends to come from the early investors with high reputations.
Overall, if steemit wants to open up the long tail of content creation, the content it celebrates cannot be throwaway popcorn posts, Steemit bragging, follower celebrations, and whales being whales.
Those are both good articles.
The discovery issues can be fixed with the UI I hope.
Regarding "popcorn posts" I would like to see more long term or repeating curation cycles so authors are less enticed to post clickbait and can focus more time on creating better content.
From what I can see so far, I agree that it is a good thing and will have staying power. Like with anything new and unknown I do worry a bit.
Of course we worry. Share your thoughts. Steem has a very solid community that I like more every day.
https://steemit.com/steem/@camb/keep-hodling
A gambling man who co-founded Apple left for $800 and today, that stock would be worth $22 billion.
To be honest, I am still not sure what to think about STEEM/Steemit and wether or not it's a ponzi or not. But so far in my 1-2 months of using it, it seems to be working and I'm actually enjoying it. So as long as that's the case, I'll stay here.. and I guess that's true for more people as well. So I guess that's where the value comes from: because we're here and not elsewhere.
It's our posts and votes that give Steem value. Snapface and Instabook profit too much from our content.
I'm glad you're here!
I saved this for future reference. I would love to write a post featuring this viewpoint and link back to it.
I look forward to reading your post. Please share it here too.
The more I look at Steemit. The more it looks like a Scam. You can't say it is a Ponzi or Pyramid because it is both and more it is also a Shell Game and Gambling site all wraped in a business model half built half on the LARP model and half gambling model. I am working on an article to explain. Stay tuned for that.
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