Steem’s main platform, called Steemit, is a social media network built on top of the Steem blockchain. Steemit is similar to popular content-driven social networks like Reddit and Medium, but it rewards users with cryptocurrency for their participation. Here’s how it works:
Fundamentally, the more value a particular piece of content provides to a greater number of people, the more the individuals responsible for creating and curating that content can earn.
Users cast votes, creating a hierarchy of content. The more upvotes a post gets, the more it will earn. The platform also allows for downvotes, giving participants more flexibility when it comes to rating content.
Steemit is meritocratic, meaning users that hold more currency can cast votes with greater influence.
How is Steem different from bitcoin?
Both Steem and bitcoin were designed with a particular function in mind. Bitcoin was created to serve as a digital, peer-to-peer currency. Steem is, at its core, a social media platform. Many social media platforms use voting systems, such as upvotes, shares, or “likes,” to prioritise content. Steem incorporates these concepts into a unique, blockchain-based platform that pays users in STEEM for their contributions to the network. While STEEM and bitcoin are both cryptocurrencies, STEEM’s usage is specific to social networks.
Steem has three cryptocurrencies
There are three digital tokens that make up the Steemit ecosystem: STEEM, Steem Power (SP) and Steem Dollars.
STEEM. STEEM is the foundational cryptocurrency of the Steemit network. STEEM can be exchanged for bitcoin or other cryptocurrencies via several prominent exchanges. In order to cast votes, however, you need to turn your STEEM into Steem Power (SP). This process is known as “powering up.” You can also convert STEEM into Steem Dollars.
Steem Power (SP). When you turn STEEM into SP, you are investing it in the network as equity. One unit of STEEM, vested as SP, equates to one vote. Those with the most SP to contribute have the greatest influence over which content is elevated to the top. Upvotes and downvotes, or “flags,” from users holding large amounts of SP are worth more than users with less SP. Additionally, around 90% of new STEEM that is created goes to users who hold a lot of SP, which creates an incentive for participants to invest their earnings back into the network. Rate limits are in place on converting SP back into STEEM, known as “powering down.”
Steem Dollars. Steem Dollars, valued at 1:1 with the US dollar, are a unit used to represent a short-term debt. Holding Steem Dollars is described in Steem’s whitepaper as a way of lending the community the value of one US dollar, which is designed to foster growth.
How to get STEEM
There are two ways to get STEEM: buy it or earn it. You can buy STEEM on several popular cryptocurrency exchanges, including Poloniex, Bittrex and ShapeShift. Buying STEEM is probably the fastest way to acquire this currency. Earning STEEM is done by engaging with the Steemit community, posting content, commenting, sharing and networking. The more valuable contributions you make, the more STEEM you should earn.
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