Content providers are signing up to Steemit in droves. Steemit is the new blockchain-based social platform where writers can make money without intermediaries. Indeed, writers, bloggers, and all sorts of good content providers can start making money right away. Steemit users can make money even before they post their first article, image, or comment.
Joining Steemit
Attracted by Steemit growth, a couple of days ago, I signed up for Steemit with the purpose of exploring and learning about this amazing new platform. This article outlines what I have learned so far. Signing up is free. You are only required to have a Facebook or Reddit account. Soon after signing up, I checked my Steemit wallet and, to my surprise, I saw that my Steem Power had already amounted to 3.15 Steems. That is, just for signing up, Steemit awarded me some units of value. As of this writing, 3.15 Steems are convertible into bitcoins that are equivalent to $4.65 USD. Then, because of my expectations for Steemit’s continued growth and, I admit, for speculative purposes, I bought 7.11 Steems, equivalent to 0.017229 bitcoins (or $10 USD).
How to Make Money with Steemit
Steemit offers users several ways to make money. Specifically, Steemit rewards contributors when they post content, such as articles and images. In addition, readers can make money by commenting, voting, and curating content.
Users can also earn money by mining, trading, and holding the Steem cryptocurrency. However, the primary way to earn bitcoins is to receive rewards from Steemit each time your content gets upvoted, and each time you upvote other writers' good content.
Commenters also get paid. Indeed, the more you interact with Steemit, the more money you make. Moreover, Steemit rewards its users with distributions of its market capitalization of Steems. That is why in July 2016, Steemit rewarded its users with $1.3 million USD, which represented about 10 percent of its market capitalization. Steemit has been live for just a few months.
The platform’s Beta version was launched in May 2016, and it became fully functional in July. Since then, the platform has experienced massive growth.
Bitcoin, Fiat, Steems, Steem Dollars, and Steem Power
Interacting with the platform is easy. However, users must understand the following digital currency units: Bitcoins, Steems, Steems Dollars, and Steem Power. A very simplified explanation is as follows:
Bitcoin is the most popular and accepted cryptocurrency in the world. As of this writing, the value of one bitcoin equals $580. You need bitcoins to buy Steem. You can also use Ethereum, which is another cryptocurrency.
Steem is Steemit’s own cryptocurrency. Its value depends on the law of supply and demand, therefore its price is volatile. As of this writing, one Steem equals $1.70 USD. Steem was not designed to perform financial transactions. However, you can exchange Steems for bitcoins. Then, you can convert these bitcoins into the fiat currency of your choice.
Fiat money comprises dollars, euros, pesos, pounds, and all government, or central bank created currencies. According to Investopedia, “Fiat money is currency that a government has declared to be legal tender, but it is not backed by a physical commodity. The value of fiat money is derived from the relationship between supply and demand rather than the value of the material that the money is made of.”
Using Steems, you can buy Steem Dollars, and Steam Power. The Steem Dollar serves as the “fiat” currency within the Steemit ecosystem. It is the primary medium by which Steemit users exchange value between one and another. It is pegged to the U.S. dollar for stability purposes. Therefore, 10 Steem Dollars will always be equal to $10 USD. You cannot exchange Steem Dollars for fiat currency directly. Steem Dollars are just a promise, and an IOU, that you will receive Steems, which you can exchange for bitcoins. By holding Steem Dollars, you gain interest. At present, the interest rate is 10 percent annually.
Steem Power gives you influence (power). The more Steem Power you have, the more influential is your vote. You are expected to consider Steem Power a long-term investment instrument. Like the Steem Dollar, Steam Power is a promise. For every unit of Steam Power you are awarded, you will receive one Steem when you decide to cash out. However, you cannot cash out your Steem Power immediately. The process of cashing out takes 104 weeks. So, it is a really long-term investment. It was designed like this to incentivize you to maintain your loyal attachment to the platform and strive for its betterment. You also receive interest for holding Steem Power. The interest for Steem Power is nine times higher than the interest paid for Steem Dollars.
Granted, Steemit is in its infancy, which entails having up and downs. There are still many areas of concern. Security is one major concern as the July 2016 cyber-attack highlighted.
Steemit represents a huge and much needed paradigm shift. Using blockchain technology to decentralize and democratize communications and facilitate the free, uncensored flow of ideas, brings dramatic change all around. Hopefully, good, engaging content will flow into Steemit to ensure its continuous growth.
Images courtesy of Pixabay.