What is Steem?
When I first signed up for Steem I logged in and was absolutely clueless as to what I was supposed to do from there. Therefore, I decided to compile some of the basics that I have come to understand from the platform. I hope this guide will help those who are in the same position that I was in at the start.
So what is Steemit?
Steemit is essentially a social media platform in which the users are compensated for creating and curating content. So these rewards given in a store of value called Steem. This can be bought or rewarded for contributions on the social media platform.
What do you do with this Steem?
There are three ways to hold the accrued value through the platform and those are Steem, Steem Power, and Steem Dollars.
So Steem is the basic form of currency that is rewarded and can be bought. The major exchanges on which Steem can be bought is are Bittrex and Openledger.
When you own Steem you can then convert it into Steem Power where those funds cannot be taken out for quite some time. So this route is more of a long term hedge on the success of the platform as a whole. However this comes with some perks where Steemit rewards its holders by distributing Steem Power as new Steem is created therefore giving somewhat of an interest rate to its holders. The Steem Power is also important when receiving rewards because the more power you have, the more influence your votes and posts have.
Steem Dollars are a stable store of value that is equivalent to about a US dollar. This doesn’t reap the rewards of those holding in Steem Power but has far more liquidity.
What do you do with these?
So Steem is constantly being created in fact every year the amount of Steem is doubled. So why would you want to hold on to Steem? You really don’t want to hold on to Steem for any amount of time because with the supply doubling each year there will inevitably be a decrease in value barring a major spike in use. So when you have Steem you pretty much want to put it into Steem Power, or if you don’t want to make that two-year commitment you put it in Steem Dollars in order hold its value. So to sum that up the only reason to have Steem is to convert it to USD or to buy either Steem Power or Steem Dollars. The Steem Power gives you a return on your holding but can not be taken out for two years. Meanwhile, Steem Dollars are more stable and for people that don’t want to commit to the two year hold.
What makes this work?
Steem can easily be bought and traded as a cryptocurrency for ease of use. Meanwhile holding on to the currency is mutually beneficial due to rewards in the form Steem Power being distributed to holders while also keeping the value of Steem at a sufficient price level for a guaranteed period of time. The community is also constantly active because of the incentives for people to chime in and share ideas.
I struggled with the concepts of Steem when I first started and had to research it for myself. I hope this quick beginner’s guide can help others avoid the difficulty of understanding how the system works.
oh and make up videos
Hey, thanks for sharing this!! It really helped me to understand better how all of this works!! xD
Hi, Great article. I'm a week in on STEEMIT, and still getting to grips.
The whole crypto currency thing is new to me, but I'm not afraid to check out new stuff, so here I am. Followed an upvoted. Keep up the good articles.
Thanks for this. It helped to simplify the subject. I am very much a newbie, without much time to do the research myself.
Thanks for clearing up the differences between the 3.
hmm.. im still not sure how I can actually earn steem dollars and steem power as a newbie. it seems like the rich get richer wile the poor get poorer.. is there any way to actually make good money without spending your own money and buy steem power?
I've been posting articles in Steem, but I don't really get what is happening with the platform or the various STEEM currencies, or how to find anything interesting to follow. Seems like it would benefit from some more in depth information and tutorials, but I appreciate your article, it answered a few questions for me.
Im in the same place as you. Its hard understanding the steem, steem dollar, steem power trifecta.
I made 91 cent on my first blog post and 5 cents on my video. I guess ill wait and see in a week what that actually means in term of the currencies.
I guess its a try out for yourself kinda thing to understand it.
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