Greetings friends and followers
One thing that took me a long time to understand was the difference between Steem, Steem Power and Steem Dollars and what each of their function is.
I hope to clarify this question for the many many other steemates who are in the same place I was.
Steem
Steem is the fundamental unit of account on the Steem blockchain. All other tokens derive their value from the value of STEEM. Steem can be powered up into Steem Power which brings benefits to the user. You may also transfer Steem at any time. We want this to go up up up! Here's the current value:
Steem Power
Steem Power is the method of storing Steem over a long term. This power can be converted to Steem by "powering down". At this time, the power down phase breaks the saving up into 13 equal chunks and converts one chunk into Steem each week. This process can be stopped at any time.
This brilliant addition does a number of thing. It encourages people to save up, and in turn increases the value over time. It acts as a safeguard from theft. If someone manages to steal your account, they can't take this away immediately. The fact that this supply cannot be dumped immediately also brings security and avoids massive drops price drops. It also give incentives to your voting actions!
The benefit of storing steem power is an increased weight for your vote, and greater curation rewards as a result. With great power comes great responsibility.
Steem Dollars(SBD)
Steem Dollars are intended to be stable currency, valued close to $1USD. It is the currency you receive if you choose to accept the 50%/50% author rewards option. The other half is sent directly to Steem Power. You may transfer your Steem Dollars at any time or convert them directly into Steem. Here's their current value:
As you can see, SBD are very high right now! That mean's you'll the a lot value when transferring on the external market. There's no benefit to holding onto these right now. The price will go down (as close to $1USD as possible). When SBD drop below $1, you will receive a interest to encourage holding. This will in turn cause the SBD to go up above $1 again.
I suspect this feature is also intended to give you an accurate understanding of real world value that each post offers.
If you have any questions, feel free to ask. I am still new too, but I'll do my best. Please let me know of any mistakes.
I hope I have helped you understand how these currencies work together and create an amazing environment for growth.
Of course it wouldn't be possible without all of your help. Keep it up!
Thank you very much for this post it is very helpful. I just created my account yesterday and I'm trying to wrap my head around the ecosystem. I learn from repetition and I need to keep hearing this type of info over and over.
You will get it! Only took me a week to get to this point xD
thanks
Anytime.
First thing my friends ask me about Steem is " Where the money come from?" — for example, someone should buy Steem in the first place to give it value. I know the economics of Steem is complicated, is it possible to explain it in a simple way?
That will be a whole other post my friend :-) Keep an eye out for it tomorrow or the next day.
Very nice explained this confusing topic.
Thanks, glad it helped you.
Thanks for the clarification, helpful little article.
Glad it helped. I will occasionally share info like this as I learn my way :-)
I just made my first transfer from steem to steam power this morning and just got another payout and it seemed higher. Still not quite sure what I am doing haha but learning.
Awesome! Keep up the good work. I'm still barely a week old as well :-D
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sweet, my first achievement