Delegation on the steem blockchain means offering a portion of your Steam Power (of your VESTS to be more precise) to another user X for a while. You will no longer have the day-to-day benefits of the Steam Power you delegated. These are transferred to user X, who will have a higher voting power, more bandwidth, a larger slice of the rewards pool for his or her curation. You however, retain ownership of the delegated SP, meaning you can undelegate it in part or entirely any time you wish.
What are the main reasons people delegate SP on steam?
- to help projects they believe in or friends who launch a new project
- for profit
- to share it with someone of trust to boost his or her voting power while you are on vacation
- to help newbies resolve bandwidth issues
You can also have a combination of the above. What do I mean by that? If you give away for free a delegation to someone who needs it and who will stay on the platform and grow, it is likely s(he) will keep a bond to you. On the other hand, you can also support projects you like and get a profit too.
How to delegate?
You can delegate using SteemConnect, but also using other tools. You will need you Active Key for that, the username of the person you want to delegate to and the amount of SP you want to delegate. Check your wallet and make sure you have that amount in your control (not delegated!), and also don't go below 30 SP after delegation, you will have issues with the bandwidth and a voting power worth almost nothing at these Steem prices.
Also be aware that what you are delegating are VESTS, not SP. You can see the differences if you check the explanations below.
You can use this link, and change the info to suite your situation:
The number of VESTS above corresponds to 50 SP at the rate of 490.121 for steem_per_mvests (1 mvest = 1,000,000 VESTS). You can find that value and calculate for any amount of steem you want using the steemd.com site (first value on the right column).
How to change the amount you delegated?
Using the same process as above, except you will enter the updated amount. No need to cancel the delegation and delegate the new amount! In fact, you should check below about the cool-down period for undelegation.
How to undelegate?
Same as above, except, you set the amount to zero.
What is the cool-down period for undelegation?
When you undelegate (or when you delegate less than it was delegated initially), there is a cool-down period of 7 days for the amount undelegated.
What does that mean exactly? That for 7 days, the undelegated SP (or VESTS to be more precise) do not produce effects for the delegatee (the account you delegated to), but you cannot make use of it either.
Do never delegate to Y thinking "I'll undelegate after that from X and I'll have enough SP". You won't! Not, for 7 days any way!
Conclusion
Delegation is a very helpful process on the steem blockchain, using which ties can be built, communities grown, and why not, profits made. Very interesting and I don't think I've heard of a similar concept on a different blockchain. Have you?