What is steem?

Steem is a cryptocurrency used to power the platform Steemit - an incentivized blockchain social media platform. Users create and curate content on Steemit just like other social news platforms (e.g. Reddit, Hacker News) and get rewarded in Steem for their work.

How does Steemit network work?

Steemit is similar to other digital currencies like Bitcoin which can be traded, bought and sold on the open market exchange just like all of the other digital currencies exchange.

With other cryptocurrency like Bitcoin, the actual currency units that are created each day are distributed to the people who run a special Bitcoin software program in their computers that perform a process called Bitcoin Mining. The amount of computing power you have dictates how much money you get.

Steemit allows for currency mining as well, but it’s not the primary way to earn money. Every day, new Steemit currency units that are created by the network and distributed to the people who engage with the site. The more you engage, the more you get.

If you create content you will rewarded for your content. People who upvote content are rewarded for helping to curate the best content available on the site. Commenter who adds to your content will also get paid.

The 3 Steemit Currency Units:

One big difference between Steem and other digital currencies is that there are three different kinds of Steemit currency units.

There is Steem, Steem Power, and Steem Dollars.

Steem:

Steem are the units that are bought and sold for actual money on the open markets. You can trade them as you would bitcoins or a company’s stock.

But you don’t want to hold on to these for too long because more Steem Units are created every single day. If you hold onto Steem Units for a long time, they will become diluted and lose value.

Steem Power:

Owning Steem Power Units is essentially like making a long term investment in the currency because you can’t sell Steem Power Units for 2 years. But there are a lot of good reasons to have Steem Power.

By keeping your currency as Steem Power Units, you will be able to make considerably more money in the long run because you essentially have ownership in the network. As the network grows, so will your piece of the pie.

And you’ll be heavily rewarded along the way. The way things are set up now, 90% of the new Steem Currency that is generated every single day is distributed to the people who already hold Steem Power Units in the form of additional Steem Power Units. (The other 10% goes to content creators and curators).

Half of the pay you receive for your content will be in Steem Power Units.

Also, the more Steem Power Units you have, the more your curation vote will count. You will have more influence on the site and you will also get paid more for upvoting other people’s work. (When you upvote someone’s work, they will get paid more as well.)

Steem Power Units also play one final and very important role. They prevent massive price swings and volatility on the open markets. Because everyone is locked in for 2 years, we can’t all sell our currency all at once if the market starts to dip, which would crash the price were it to happen.

Steem Dollars:

Steem Dollars are the third and final form of the currency and never get diluted or lose their value. They are designed to be a stable currency that you can sell at any time. When you create popular content, 50% of your pay will be in Steem Dollars.

And you’ll be rewarded for holding Steem dollars too. It’s not nearly as much as the rewards for holding Steem Power. But because it still keeps the currency in the network, holding Steem Dollars pays 10% interest.

How do Steemit pay for blog content?

Steemit pays both the content creators when their work gets upvoted, as well as the people who curate the best content on the site by upvoting other work.

Steemit made a possible platform to build on top of a new kind of digital currency. This made blogging simple and inspiring people to independent on their own to manage their extra expenditure.

Thank You!

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