Someone recently asked the question, is SteemIt a pyramid scheme, and where does the money come from? Here is a brief outline of my current thinking on the matter.
First of all I share a healthy degree of skepticism about SteemIt and sympathize with the question, even though I've chosen to participate in the platform. Maintaining a bit of healthy skepticism is not a bad thing and for me a part of being open to the possibility that I might not be 100% correct in the views that I hold at any given moment, and strive to remain vigilant about that.
Currently my view is that Steem Dollars are created out of nothing, and then used as currency within the SteemIt ecosystem, where they are moved around between participants for creating and curating content. If users wish they can exchange their Steem Dollars on the open market for another crypto-currency such as Bitcoin, and subsequently to USD or other fiat currency.
It should not be lost on anyone however, that fiat currency is also created out of nothing. So in effect SteemIt users are simply exchanging digital paper notes for real world paper notes that are backed by the same fundamentals (or lack thereof). I've read numerous criticisms and critiques about SteemIt, which on one hand I've found to contain some enlightening insights, but I have yet to read a single one that criticizes SteemIt as a ponzi scheme without simultaneously either failing to recognize or failing to acknowledge that the entire world economy is a ponzi scheme of near infinite magnitude. That to me seems bordering on disingenuous. In essence, by earning and exchanging Steem Dollars for fiat dollars, SteemIt users are simply trading one ponzi for another.
Now, it can easily be argued that, "well, if the fiat ponzi is inherently wrong, then it is no less wrong to participate in a crypto ponzi".
However that argument seems to me to cut both ways, for the same lack of ability to widen one's scope to include the larger economic context. That is to say, if people try to take a moral stance that one should abandon the idea of writing for Steem Dollars in favor of writing (or performing literally any other type of labor) in exchange for fiat dollars, then that to me seems to make their argument fall flat.
If such is the argument, then why could one not take the position that it is at least somewhat better to participate in earning Steem Dollars, a fraction of which needn't be stolen from you to support organized murder, than it would be to earn fiat dollars where the same may not be said.
Perhaps a good way to frame the real question, in terms that are endearing to SteemIt's 'marine' vernacular, is to ask whether so long as we are all fish swimming in a world economy where all water has been created out of nothing, is it wrong to suck currency from the Ponzi Ocean into a Ponzi Pond?
In the end, I don't feel that either fiat paper currency or SteemIt's digital paper currency is really long-term sustainable, if for nothing other than the simple reason that both are centrally planned. But on the other hand, from a practical perspective (which is I must admit is a utilitarian one), unless one is prepared at this very moment to abandon living in the modern world which so unequivocally revolves around the exchange of paper currency in one form or another, then there seems to be little alternative so long as one wishes to keep a roof over their head.
Even Bitcoin, as wonderful as it is, is still valued by people in terms of fiat currency (i.e. 1 bitcoin = $X USD), and that I will suggest is because at this point bitcoin still can't buy you a loaf of bread at the corner market.
Someday I am confident that will change, and many more people will come to embrace decentralized currency. But decentralizing currency will not do it alone, for there must along with it be a decentralized economy that is capable of operating completely 'de-coupled' from the current fiat economy. Otherwise it will be destined to remain just a surrogate and not a real solution from the roots up.
This is my current perspective on the matter, which is certainly open to change, the more I read and the more I interact with other intelligent people on the subject, and am able to ponder the many implications. I welcome you to comment below and let me know your thoughts.
Bear in mind that I am not here saying that we should give ultimate weight and sanction to utilitarian arguments, such as the one above. In fact, utility is generally destructive of human relationship because it signifies a 'means to and end' whereas the means and the end should be aligned and consistent with one another. That is the foundation upon which a real moral philosophy is based. At the same time, I'm not so sure what the result of an argument that purports to say, "SteemIt is a pyramid scheme, so don't quit your day job (which oh by the way, also pays you out of a pyramid scheme)", is supposed to be.
Speech plus action creates property, per Hoppe.
Thanks for the comment @chuckhartman, but you'll have to elaborate for me. I know of Hoppe but haven't read him yet.