This article is wonderful. “Shares” of a company have value and can act as currency. Steem is like a “share” of the Steem idea. And the Steem idea has value in the same way as the Facebook idea and the Paypal idea have value.

I want to add that there is an underlying “commodity” for dollars and for Steem. For dollars, it’s not-being-in-jail. For Steem (or other cryptocurrency), it’s CPU cycles.

Dollars have value because of taxes and the State's monopoly on violence. To own real estate, you must pay taxes (and to rent property you must reimburse the owner for their taxes). So, directly or indirectly, everyone must pay taxes to live within the law. And if you don’t live within the law, men with guns take you to jail. The only currency with which to pay taxes is the Almighty Dollar. Thus demand, thus value.

Cryptocurrency doesn’t have that kind of coercive value (which is why libertarians like it, I suppose). And cryptocurrency is not backed up by literal commodity value, as stated in the article. But Steem is backed up by the value of the networked computational power needed to mine the currency and facilitate the transactions. That’s a real, physical resource. Networked computational power can do real things of worth to humans. Networked computational power gets turned into communication, entertainment, and the coordination of physical activities. Shares of that resource are more than just shares of an idea.