I’ve been researching everything I can about how SteemIt works over the past few days. I’ve read the whitepaper. I’ve watched YouTube videos. I've read many posts on SteemIt about SteemIt. Here’s my understanding of it so far. My goal here is to be able to give enough information in a short conversation so new users can get started in SteemIt, understand what they’re looking at, and be able to post, comment, and start earning STEEM's. I'm not trying to give a comprehensive explanation on how it all works, as I don’t fully understand it yet, either.
- SteemIt seems to be most like Reddit, Medium, or Wordpress. It seems best suited for medium to long blog posts like those platforms.
- What’s different about SteemIt is you get paid to post, comment, up vote/like. First question is where does the money comes from? If they’re familiar with Bitcoin, they can understand it’s newly generated money created by the software to reward users for contributing with posts, comments, up votes/likes, etc. the same way miners are rewarded with newly generated Bitcoins. If they aren’t familiar with Bitcoins, they may have a hard time understanding how it’s possible to get paid when there isn’t someone paying them.
- I'll show them one of my previous posts that earned me ~US$200. "Is this $200 in US Dollars?" No, it’s $200, split 50/50 between STEEM Dollars (SBD), and STEEM Power. The SBD, I can sell right away for Bitcoins, which I can then sell for USD, at Coinbase, etc. It’s suppose to be 1:1 to the USD worth in BTC or STEEM, but for reason’s I still don’t understand yet, an SBD is trading 30%+ more than a USD at the moment. The other part is in STEEM Power that vests over 2 years, in 104 increments, on a weekly basis.
- Next question is what is the difference between STEEM, STEEM Power, and STEEM Dollar?
- STEEM is the basic unit of value in SteemIt. It is what’s generated to reward users for participating. It’s like Bitcoin in that it can be transferred, sold, and traded. It’s like stock in a company. It'll go up and down depending on supply and demand like a stock or Bitcoin.
- STEEM Power is STEEM, but locked to your account and takes 2 years to fully vest in weekly increments. What you get for STEEM Power is influence. Your votes carry more weight than someone with less STEEM Power. It’s like employee stock options that vests over time. Think of STEEM Power as voting shares, STEEM as non voting shares that can be sold. In order to get more votes, you have to agree to lock up your STEEM by converting them to STEEM Power, and it’ll take 2 years to unlock all your STEEM Power back to STEEM to sell them.
- STEEM Dollar is suppose to be pegged to USD and pays you interest. It’s like a bank deposit. It's designed to hold its value and pay you interest, but your upside is capped. You can sell them right away for Bitcoins.
- You can invest in SteemIt by buying STEEM or STEEM Dollars with Bitcoins, or you can earn them by posting.
The goal is a brief conversation (<10 minutes) with someone unfamiliar with SteemIt, using terms and analogies most people can understand. I think it's enough to get them started and posting. What do you guys think?