Who is paying me, and you, for this?

As a lot of you might have already done, the very first thing I did, after joining Steemit was, asking myself, where does the money come from? Who pays me for what I contribute?

I had already read an article that quoted some expert declaring this as a 100% Ponzi scheme, just before creating my Steemit account. But what have I got to lose, even if it is, or it ends up as, a Ponzi scheme? In the worst case scenario I might get some first hand experience on a Ponzi scheme. And.. I got in.

By the last two days, I found it nice to use, though everyone in here seemed too nice with each other, especially if compared with those on Reddit. Then going through the posts, I found one or two theories on where exactly, the money comes from. The first one was that the money comes from the value of the content being created. But if the content, of whatever value it be, was free to access for every one, the price is practically zero or in other words nobody is paying for it. Think about Wikipedia.

Another theory was based on reputation. But I found little value on that either. I might be wrong but still I doubted, how much would people pay for building their reputation and would that payment be enough to maintain the effort of the content creators and curators for a social network of this magnitude, if it is to scale up, as expected.

It looked like the public speaking club that I once happened to have a sneak peek in to. This club offered me a chance to build my reputation as a public speaker ( I wasn't a public speaker at that time neither did I want to), if I pay them a significant amount of money. They used this money, to rent a reputed convention centre to organise an event in which the members would speak in front of an invited audience and advertised it, with brief but highly blown up descriptions for each speaker.

I didn't pay but I couldn't avoid being among the audience. This program was a terrible experience for the audience. They didn't attend the second session, neither did they allow anyone else they knew, attend any sessions scheduled for the rest of the day.

The reason: These speakers tried to buy the reputation, because they could not build it at any naturally occurring and non-paid chances they had. And that was because they were not naturally great or even good public speakers.

The lesson: The moment you buy reputation, you are lying about your talent. The audience or readers would sniff it out, and run away as soon as possible.

But there were one or two good speakers, and they regretted secretly for joining this program, which in fact gave them a bad reputation or at the least no improvement in reputation and loss of money. If this is the case with Steemit, it definitely is going to spiral down, after the initial climb, and those who called it a Ponzi might stand vindicated.

Then I started looking at it another way. Where does Steem get its value? If I had some spare Steem, who would I approach to sell it? Who would find it useful? Who needs it? How would I market it? What can Steem do what other coins or currencies cannot do?

There came the answer, the voting power on content, that might catch the attention of a large community, that is something only steem can buy. Who wants that voting power? Who wants to influence a large community? corporates, governments, political parties, ideological groups, small businesses, bloggers/writers with a cause, celebrities, fake news creators and who doesn't want to choose what other people are going to read? These are the people who are going to pay and that is where the money is coming from. This is the money that goes into traditional media houses as well as the current social networks ( not to mention the Russian link ;-) ).

Now that doesn't sound like a Ponzi scheme. There are people who would pay to get the attention of a community. But does the current value of Steem come from these people? Not necessarily. It might be coming from the speculation on how big the community can grow, and how much others would pay for influencing the community. Or it might even be running through the initial cycles of a reputation-building club.

The contributers and curators are being paid now for building a community of this speculated magnitude. Each person buying Steem is investing on this speculated dream. That means the value lies in the community being built and not in the content. But by the time the real money comes in, the community must be matured enough to handle paid news, fake news, propaganda, subliminal ads and much more, or else it may look like a social network full of sponsored content. I hope we as a community will be able to achieve that level of maturity.