Where Does The Money Come From? - Ben's Reply
(in reply to the #bitcoinpizza conversation)
Once my friends and family found out about my $10,000 dollar article on steemit, the questions started rolling in.
One of the questions is "Where does the money on steemit come from?"
When a friend or family member ask me where the money comes from, my response is typically started with a variation of this:
The money comes from the value of Steem. Ultimately, that value is from demand which comes from trust, which, (according to my somewhat limited understanding of money) is the same thing the US dollar is backed by, or any dollar for that matter.
The dollar has value, because there is a demand for it. There is a demand for it, because it's trusted. It's trusted because we collectively trust that our centralized authority (the government) has something that substantiates it when in reality, they don't. Gold is a substantial form of trust when everyone agrees that it has value by us putting in demand. We have allowed our government to be the substantiator of our currency and we validate that by continuing to keep it in demand.
Steem, on the other hand, is trustworthy in and of itself. It's controlled by a decentralized authority. Anyone can set up their computer to start processing transactions and contribute to the network. Steem software runs secure and nerdy math problems that validate transactions as legitimate or not.
While I'm not sure if that's the best answer I can give and it's definitely not as creative as @lukestokes answer, it's the one I use currently. Maybe I can borrow Lukes answer to better explain where it comes from. I would love to here suggestions on how I can improve my answer and any critiques. Especially if I'm wrong on the economics behind my answer.
I have had people ask me the same thing when it came to explaining Steemit to friends. After reading your answer I do understand it better and feel like I can better translate where the money comes from to my friends who are interested in Steemit. I also enjoy how you gave another creative answer from another Steemit user. Thank you for sharing this post and giving me a better understanding to where the money comes from.
Thanks for sharing. I'm relieved to know that my response was received as useful.
Whenever I'm asked about crypto, always Bitcoin, the question they usually ask me is: What is backing Bitcoin? And I always tell them that it is backed up by math and that is way better than the state or gold.
I get the same questions. I always chuckle inside because they have no clue as to what USD is backed by, but they will typically agree (at least in my circles), that there is no gold backing our money. My question is always, "what backs gold and why?"
Your response is good, fact is no one here needs to know Exactly How It works, we just need to understand the basics of it, proof that we understand the basics of it is, If we can explain it to someone else and make him or her understand.
yes, someone did once say that people who don't understand bitcoin really at the core don't understand money, it's just that with fiat it was introduced to them and generally accepted by everyone without question, going back to the concept of demand and trust
I'm shocked you had a $10,000+ article. That's easily the highest I've seen. Did it get upvoted significantly right after publishing or was it a slow burn? Congratulations!
From my understanding the creator doesn't receive the money from upvotes that occur more than seven days after posting... which seems like creators might not benefit 100% from evergreen content, especially if it takes a week or so before it "goes viral".
I'll have to read that $10k article now.