Steems
In SteemIt Network, Steems are the basic units of cryptocurrency that have a value in the open market. Steems can fluctuate a lot in value as they are available in the open market. According to the rising or falling demand, their value can go up and down drastically and they are highly volatile.
That's where the Steem Dollars and Steem Power come to rescue as they are not volatile like Steems. Steems are designed for speculation. You can convert your Steems into Steem Dollars or Steem Power.
Steem Dollars
Steem dollars are the currency of the SteemIt ecosystem. It is the medium through which people can exchange value with each other. To convert Steem Dollars into a fiat currency, you will have to convert Steem dollars into Steem first.
Its value has been stabilized by pegging it to the US Dollars. Steem Dollars' value is equal to the US Dollars, i.e. 1 Steem Dollar = 1 USD. SteemIt network promises to pay you 1 USD for each Steem Dollar irrespective of the value of Steems.
The quantity of Steem doubles every year and ten percent of new Steems that come into existence goes into paying the interest to the people holding Steem Dollars.
Steem Power
Steem power is a long-term investment. It's a promise that for every unit of Steem power you will get a unit of Steem if you opt to cash out. It is referred as powering down.
You cannot withdraw all the funds from Steem Power whenever you want. When you start the process of powering down, an equal proportion of your Steem power is cashed out each week into Steems for 104 weeks. So, you will need 104 weeks to cash out all of your Steem power into Steem.
However, Steem power attracts greater interest on your investment. 90% of newly generated steem goes to the people holding Steem power.
Steem power gives you greater influence over the network. Your votes hold a greater weight if you hold Steem power.