I've got some questions and seriously could use some answers if anyone has any. Please and thank you friends~
I realize that this isn't quite a story that I'm telling here, but I figure if the comments exist I may as well make use of them. So I gather that Steemit is some kind of weird social media site that allegedly pays out if you produce high quality content which gets upvoted. So does the company behind it actually pay you at any point?
The Steemos or STEEM Power or whatever the name of the cryptocurrency actually is has a given dollar value on the wallet page. Who sets that price? Is that actually the amount of money you get from it when you cash out? Does anyone mind if I call them Steemos anyway?
I would really enjoy getting a few bucks for just my usual social media usage, but the whole thing kinda feels a little like the sort of thing that some just out of college CS guys would create with the purpose of building an ecosystem, then immediately sell out to Yahoo or Microsoft or something. Do you guys have any thoughts on why that wouldn't be the case?
Thanks for putting up with me! You all rock and I appreciate any answers you have, or even if you can tell me there's a lack of information on parts of it, it'd be so helpful.
You can think of Steemit as one front-end for the blockchain Steem.
To make my life easy, I think of Steem as a 'decentralized reddit' where 'karma points' are transferable and posts (and even comments, like this one) are permanently encoded into the blockchain, a la the interface that Steemit is providing.
I could (conceivably and have done so) write this comment via the cli_wallet, but this process is too cumbersome for the non-techie and, as such, an interface to the blockchain API, via Steemit or any other front-end to the blockchain, is necessary.
So within this conceptual space wherein we think of Steemot as the frontend for the Steem Blockchain, how exactly does the mining work? Is it that providing relatively valuable content (as determined by upvotes) is the mining? I've been going through the whitepaper and trying to figure out how any of this would actually work. Thanks so much for the help by the way!
As I understand it, it is the votes themselves that are the 'mining' part of the equation, as you vote (mine) you acquire Steem Power, some of which you leave behind on the post, some of which you take with you to spread on other posts..... I think.
CG
I think mining is still mining and when you vote, the steem you acquire is distributed to you by the network, steem that has already been mined.
You think wrong. While CPU-mining is still possible, the major part of new steem is created through voting
There are 21 blocks that are signed in a round with 3 seconds per block. 19 out of those 21 blocks are signed by the voted witnesses. 1 other block comes from a randomly selected witness. The final block is the proof of work block coming from a miner. The mining is done to cryptographically secure the database, i.e. posts, comments, votes, etc. on the blockchain.
From what I understand, the blockchain produces 2 additional STEEM every block for content creators and curators (upvoters) with the rewards distributed as per the algorithm described in the whitepaper.
Content creation and upvoting distributes STEEM to those who mainly create quality content and then followed by those who upvote the content the earliest.
This is my attempt to explain it to uninitiated:
Bitcoin pays miners with a reward when they solve a cryptographic puzzle. (Objective proof of work)
Steemit gives a reward every 24h on the best content based on votes. (Subjective proof of work)
Rewards starts on July 4th. Until then it accumulates for that Big Day.
The price of STEEM is determined on the market against other cryptocurrencies like bitcoin is. A Steem Dollars(SD) is always worth $1 of STEEM and will start trading on July 4th. Since it has a stable value it will be valuable for traders.
To protect your Steem from the inflation(the reward) and gain more voting power(and curation rewards), you can power up your Steem and then have STEEM POWER.
STEEMPOWER(SP) can be converted back into STEEM in 104 equal weekly payments.
Reward from content creation: 50% SD and 50% SP.
Reward from curation: 100% SP
Reward from mining: 100% SP
There isn't a company behind it so there won't be a flotation.
Instead it is backed by a cryptocurrency, based on bitcoin, but instead of the coins going to miners it is distributed to writers.
Think of Steem as a pump that does not create any new value but constantly re-distributes the existing value (or shares) according to the perceived value of input created by the users (or shareholders).
Your first impression might be that such economic model cannot be sustainable, but deeper analysis indicates that it is sustainable as long as Steem ecosystem expands at a rate faster than 10% a year. The case of Bitcoin (or Ethereum) shows that 10% growth rate is realistic, even in the long run.
Here you'll find a good insight:
https://steemit.com/steem/@gavvet/is-steemit-a-ponzi-scheme
That was very interesting, thanks for the read!