Capitalistic economy versus a gift economy.
There are many challenges for new Steemit members and one of them is understanding the Steemit economy, which is a gift economy versus a capitalistic economy. I have nothing against capitalism, it is the economic principle which built our current economy, I use it for contrast here only to clarify how Steemit economy is different. It’s important to understand this so you adjust both your expectations and most importantly to maximize your benefit in the Steemit economy.
In a capitalistic economy you trade goods or services for money. You build a business network by advertising the best price, best products and quickest shipping time. In the Steemit economy you build your network by interacting with people socially and by making gifts to people in the form of upvoting their posts. These upvotes are gifts, which have monetary value. The amount of monetary value each upvote is worth depends mainly on how much Steem power we have and how many upvotes we make per day.
Upvote Origin
It’s very important to understand that upvotes don’t come from your wallet and that they don’t diminish your earnings on the platform. When you upvote someone’s post - that value is not being withdrawn from your personal account. You’re not giving anyone anything from your personal savings or STEEM Power. Instead, you’re vote is actually coming from the daily rewards pool. The Steem blockchain produces new Steem every day and this new Steem is called the daily rewards pool.
Upvoting Posts or giving Gifts
Steemit blog posts may contain pictures, drawings or written works. When you want to express your appreciation in Steemit you give an upvote. In the Steemit economy we all can give a certain number and size upvote to other people’s posts, which are like gift’s. The truly amazing thing is that upvotes result in monetary rewards “Steem” fit the post author and ALSO monetary rewards called curation rewards for the person who upvotes a post. Currently upvote values are split 50/50 between post author and curation rewards. This means if your upvote is worth $1.00 the authors reward is roughly one half dollar and your reward is roughly one half dollar. also result in Steemit economy giving us a gift called a curation award. These gifts also have monetary value. So when we give a gift we also get a gift from Steemit.
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Upvoting replies or giving additional gifts.
Social interactions on Steemit can also be rewarded with upvotes or gifts. When you like a post you upvote it you have the option of interacting with the creator of the post by selecting reply and writing a few or many words to the post creator. You can also ask questions in this reply or request new information from the creator about the post. The creator of the post gets a monetary reward from your upvote. They can read your reply and reply to you with a Thank You and They can upvote your reply, which means they give you a gift which has monetary value. They can also write a reply to you providing additional information about the topic from the post. You then get that reply and you can upvote it giving them another gift for the additional information. You can write each other until the conversation is over and if you want you can upvote every reply. The main point is that in the Steemit economy our normal social interactions like expressing appreciation for pretty pictures or well written explanations is accompanied by a gift called an upvote which has value.
Upvotes are renewable
The added bonus is these gifts are renewable. Every 24 hours we get ten new 100% votes as long as we didn’t use more then ten votes in the previous 24 hours. But even if we did use more then ten votes we still have new upvotes every day, but they are worth less money. My paragraph explains my understanding of voting power.
Upvote Power
In order to understand how the gift economy we need to understand voting power. We all have ten votes per day at 100%, but making a vote reduces your voting power by about 2%. So while the power of your first vote is 100 percent the next votes are reduced by approximately 2% each vote, so in reality they are worth less then 100%. The math is like this: the first vote is 100%, the second is 98%, the third is 96%, etc until your at 80% and then it takes 24 hours to regenerate your voting power back to 100%. So ten votes, 2% drop in voting power with each vote and 24 hours to regenerate your voting power to a true 100%.
Steempower determines the size of your vote or gift
On the Steemit Platform the size of your investment in a semi-liquid form of Steem called Steem Power determines how much influence or power you have on the Steem platform. On the Steemit Platform Power means money, which tells you how much your upvotes are worth in Steem. So the more Steem Power you have, the more Steem your vote is worth.
There are many challenges for new Steemit members and one of them is understanding the Steemit gift economy. It is important to understand this economy to maximize your return on your investment and maximize your positive effect on others. I hope this post helps you understand and you will benefit in the Steemit economy.
Stay thirsty for knowledge,
✍🏼 by Shortsegments
References:
Marie Goodwin
https://www.shareable.net/blog/how-to-run-a-business-in-the-gift-economySteem Blockchain Daily Reward Image by @sndbox
https://steemit.com/toolkit/@sndbox/what-is-a-steemit-upvote-an-illustrated-guide
Stay thirsty for knowledge my friends.
✍️ written by Shortsegments
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Shortsegments is a blogger or writer on the Steemit platform, where writers, photographers and video bloggers, along with other content producers get paid for posting their content. Steemit is a decentralized social media platform on a blockchain called Steem. A very important difference between Steemit and centralized platforms like Facebook, Instagram or YouTube, is that there isn’t a central authority or owner to take your account away from you and your account can’t be deleted. You are the owner of your account. Find out more at this Link
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