I don't remember exactly what hard fork number it was, but I think after hard fork 17, you can't mine STEEM anymore. All of the mining at this moment is done through witnessing, a proof of stake method. To keep it simple, this list shows the people who are generating new STEEM.
https://steemit.com/~witnesses
If you understand the difference between Ethereum and its tokens, STEEM and STEEM tokens are exactly the same. STEEM is a blockchain which gives you STEEM as payment if you help maintaining it (ie. witnessing). People then can create their own token that will also use STEEM blockchain. STEEM tokens do not have to have anything related to STEEM aside from the fact that they use STEEM blockchain to keep track of transactions. As a final difference, you can think of STEEM as the blockchain currency and STEEM token is a user-created currency. I can create my own token called "Phok" and it would be on a STEEM blockchain and only people who read my post will receive Phok as a reward.
SBD pegged to the dollar is NOT maintained. As you can see on any exchange listing, SBD was 12 USD and slowly dropping.
I cannot say for sure the main reason they need SBD when they already have STEEM. One of the main things earlier is that they see SBD as an internal currency between Steemit users. STEEM is meant for cashing out or buying in which means it's very volatile. In addition, post rewards are split between STEEM and SBD, so having a USD pegged reduced wild swing for reward estimation. SBD is also intended to be a safety net against price manipulation since it's "supposedly" pegged to fiat, so less likely to be pumped and dumped.
“SBD pegged to the dollar is NOT maintained. As you can see on any exchange listing, SBD was 12 USD and slowly dropping.” is the FAQ out of date on this then?
I don't think you can say it's out of date because it is intentionally to be pegged to the dollar. Its purpose is still just that. This is just natural market reaction because market sees value in SBD as it can generate more money through upvote bots. There's no way in hell STEEM devs can prevent this from happening.
But yea, a more recent update on how the state of STEEM/SBD would be nice.
I interpreted "pegged to the US$" to mean the rate would be maintained within a range. It seems as you say, value is determined by the market and nobody is intentionally trying to keep it in a range; like for example the HK$.
Thanks for the clarification.
Are you saying Witnesses are mining the Tokens that fund the reward pool?
Yes, indirectly. So whenever a new block is generated on a STEEM blockchain, some amount of STEEM is added to the reward pool. The way I understand it is like this:
The witnesses keep the blockchain updated by producing new blocks, and every time a block is created, new STEEM goes into the reward pool. So for reward pool, STEEM automatically gets added.
I'm trying to be clear as your question could be interpreted as reward pool taking witnesses' tokens. We don't take witnesses' reward, witnesses get paid for producing new blocks, new blocks automatically create new STEEM to fund reward pool. Reward pool then distributes STEEM to author/curator.
So if you get elected as a Witness you need to be able to stand up a server platform to host a node to maintain a block chain and price feed?
I'm still a little confused about the difference between 'creating a new block' and computing a cryptographic token (STEEM).
But thanks for being so patient and offering an explanation. I'm sure it'll make more sense with time.
Yes, I think that's how to be a witness.
So I can only explain it the way I understand it, if you can see it differently and it makes sense, then that's good, too. In general, you can say that "creating a new block" and "computing a cryptographic token" are the same since in the end, you get token as compensation.
However, in more detail, miner/witness are NOT token creator. The blockchain creates tokens automatically to pay miner/witness to keep the blockchain up-to-date. The energy from hardware/computer/server goes into solving transaction hash so that the entire network is aware of what is happening.
I see it like this: you and I are running a store called "SteemChain" and our job is to keep track of how many STEEM goes in and out of "SteemChain" a day. As long as we can agree on the final amount at the end of the day, the store uses that as their transaction history. The store then pays us in STEEM for our work and allocates a new amount of STEEM for the next day. All of our effort goes into keeping track of STEEM transaction. We're not actively printing new STEEM. Only the store can actually create new STEEM.