First, Let's clarify a Misconception

Steem Power (SP) is NOT a different currency to STEEM.

Often times I see people stating that Steemit has 3 currencies. That is not true. There are only 2 currencies: STEEM & SBD. SP is actually STEEM.

When you convert STEEM to SP, you are not trading it for a different currency. What you are actually doing is storing STEEM for long time. (This is called Staking) You are essentially putting that STEEM in a vault. SP is actually STEEM.

So Why is it important to have SP?

If you are interested in making earnings, you need SP.

When you own SP you get 4 things:

Daily allotment of votes (most important)
Earn Interest
Daily allotment of bandwidth to use Steemit
Right to vote Steemit witnesses (leadership)

I see plenty of people on steemit with the minimum amount of SP in their account and yet they complain that they don't make any money. Imagine If I loaned you $0.00 and I expected hundreds or even thousands in returns. You would think I was crazy.

Well, you wouldn't expect to invest $0.00 into the stock market or a business and expect to get rich. Would you?

SP is an investment. It should be treated like an investment.

Once you have SP, you can use your daily allotment of votes to judge content. When you do that, you get rewarded in SP, STEEM, and SBD. You can also sell those votes to someone that wants to use them. A good place to find someone to sell your daily allotment of votes is on MinnowBooster. Also, when you have SP in your account, then you get interest. It not a large amount of interest, but it is an added bonus.

SP gives you bandwidth

If you get a new free account, then that account is loaded with a tiny amount of SP and vote delegation. This is essentially Steemit Inc giving you some votes to use as well as some bandwidth.

Here is an account for example that has a very tiny amount of SP in it and some delegation. That is barely enough to prevent that account from going dead. If SP goes too low, then the account will not function because it is not creating bandwidth to work. The SP is not consumed to create bandwidth. Instead, the bandwidth is rewarded for you staking your STEEM in your account.

SP gives you the right to vote for 30 witnesses

When you store your STEEM in SP, you have a right to vote the people keeping the block chain alive. The more SP you have the more weight your vote has. If the witness is doing a poor job at recording your data (comments, votes, and transactions) to the block chain, then you switch your vote to someone else that is doing a better job. Ever wonder why STEEM transactions are Free and Fast? That is because the witnesses processing these transactions don't want to do a bad job and lose these votes.

SP legitimizes you

With the free account preloaded with SP and no investment from account owner, others are going to believe that you are only using Steemit for educational or entertainment purposes. That is perfectly acceptable, but you are not likely going to get voted when people think you are just here to read articles.

Lets do a mental exercise:

Remember when I gave the example of loaning $0.00 and expecting returns? Now just imagine the look on people's faces when they are expected to make payments when the loan amount was $0.00. They would probably look something like this.

Now you have that mental picture

When a person has invested $0.00 in their account and beg for votes or get mad for not making any money, then this is the look they can't see from the other side.