I've been using Steemit for a few weeks now, and there was one thing I struggled with from the outstep,
How does Steem have any monetary value?
This however, all made sense to me (after using the platform and accruing Steem Power for a few weeks) when my up votes started allocating $0.01 of Steem Dollars to all content I upvoted. Steem's value is in the POWER it gives the holders to reward content and writers they like, and incentivise them to continue to provide this content.
This power is democratic too. The more Steem you have, the more power you have on the platform. You can accrue in various way;
- You can buy Steem, this isn't democratic, however the fact that the inflation rate is so high, purchasers of Steem get penalised one way or another if they don't contribute to the Platform. Even Steem Power carries a inflation rate of 10%p.a. (Steam itself carries a 100% inflation rate p.a), but also locks that user in for 104 weeks whilst they cannot realise the investment.
- You can be a content creator. The better you are, the more your liked, the more reward you get. High incentives to create great content and give users what they want.
- Engage with the content creators, you can earn $Steem if your contribution is deemed useful from the community, thus incentivising further engagement.
- Pick great content before everyone else, you get rewarded with $Steem
Generally social media and content delivery as it should be. Where there is big reward, content creators will come, if your contribution is deemed unnecessary, you will receive no $Steem and be encourage to adapt to what the community wants.
The other interesting thing is that, the more Steem you have, the more reputation (power) you have, and thus you can help content creators get more views with your up vote than they might do with someone with less Steem. This means that, the more seem you have, the more Power you have to make or break content creators income. This incentives community members to hoard Steem. Power is valuable, and could become ever more so valuable as the Steemit community grows.
Large amounts of Steem can influence community members to read a certain content creator, or read a certain subject more than others. It's no surprise that the most popular tags are 'steem' and 'introduce yourself'. This is where the value is for content creators, and this is where the large Steem holders are spending most of their time. Could we see a future where corporate entities purchase large amounts of Steem in order to reward customers, or for subliminal brand advertising? Luckily the inflation rate means there is an ongoing cost to such activity that will only benefit Steemit. That is where the value for Steem is, the ability to influence a content network into a direction you prefer, the more Steem you have, the more influence, the more POWER.