RE: Is Steemit a Ponzi Scheme? by cyrano.witness

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Viewing a response to: @gavvet/is-steemit-a-ponzi-scheme

· @cyrano.witness ·
Steem may not be a Ponzi in the strict sense, however...

Steem distributes wealth without acquiring any. I really don't see how this can work out in the long run. When on July 4th 2 million SBDs have been distributed and everybody tries to cash out the whole scheme will simply collapse. In order to pay out the rewards, there must be demand for STEEM, and there's really no reason to buy any. The only reason I can image is to increase your voting power, and voting power is mostly good for generating income. And that's a point where we're suddenly VERY close to a Ponzi.
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vote details (7)
@bergy ·
This, exactly.
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@dzid26 ·
So the reason to purchase steem is to have voting power and and if you are a creator you bet against other creators that you will get more than you put in. 

Are there any other reasons? Maybe future reasons ? Why would anyone buy steem other than speculative investment.
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@dzid26 ·
I found the reason - to keep ability to vote and write comments:

If the user does not earn or buy enough Steem Power, then their Steem Power will gradually decrease (as a fraction of all the Steem Power existing within the system) and eventually (even if it takes waiting until market saturation of the platform) they will no longer be able to use the platform (as in post, comment, vote, transfer money, or anything other than only read the content on the platform). So to continue using the platform, they must maintain a sufficient fraction of their Steem Power holdings. Fortunately using the platform at its most basic level without terribly restrictive bandwidth quota limits does not require the user to hold a very large amount of Steem Power in dollar terms. Nevertheless, they do need to continue to maintain at least that minimum amount of Steem Power to be able to reasonably use the system, which means that if the user cannot earn (e.g. through content and curation rewards) that minimum amount to counteract the less than 5% per year effective tax on their Steem Power and thus maintain economic status quo, they will need to buy more STEEM (and power up) every year. This effectively amounts to a subscription fee to use the platform. And that is the reason why the platform could theoretically continue to operate indefinitely even after reaching market saturation. Now whether it actually does so or not depends on many factors, but I think the most critical of those factors is whether people would be willing to pay that effective subscription fee (in the form of a less than 5% wealth tax on their Steem Power) to continue using the platform.
https://steemit.com/steem/@arhag/where-does-the-money-come-from-a-look-into-the-economics-of-steem
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vote details (1)
@tryingnew · (edited)
It's a trade-off between using another site like Reddit and seeing Ads OR using this site and buying Steem Power.
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