Below is how I've explained the cryptocurrency aspect to my online friends. I've had really good luck with getting them to join, since they trust me when I tell them I've withdrawn the money and spent it. What's been hard is getting them to stay if their first post or two doesn't make any money. Here's the explanation I've used:

"Its really complicated to explain where the money comes from. The site is the basis for the creation of an internet cryptocurrency like Bitcoin. Cryptocurrencies are created based on "proof of work," unlike regular money, which is created based on debt. I don't fully understand all the geeky details, but I believe it works because people like to buy in to new cryptocurrencies, since Bitcoin was so successful and went up in value.

So basically, the site creates the cryptocurrency (called Steem) in response to the creation of online content (proof of work ). The value of the content is decided by people liking it enough to upvote it. And when someone cashes out the Steem they've made, speculators buy it with real dollars. They want to invest in it, in hopes it will double dozens of times over like Bitcoin did. Which it certainly could. The important part, I think, is that it's legal, and it's being used to benefit people. Cryptocurrencies were created to give people options for trading with others and also to have debt free money. Many people believe that the way regular money is created and distributed is unethical, and thus cryptocurrencies were born."

Everyone seems satisfied with this. However, I really like the simpler "Facebook" argument that was posted in one of the comments above. I may start using that instead. :-)