I received a request through a comment from @omnithumbs on one of my recent posts which says:

A good guide. If you could elaborate on steem power and how it plays a role in steemit too then this could serve as the best go to guide to get started on steemit for new users.

I could've replied to the comment, but then I thought I never touched the subject, thinking it was already widely covered by other Steemians previously.

I still encourage researching on your own, when you have questions that you find intriguing, because you'll find much better answers (an entire web of them) to fill the void.

However, since I haven't previously explained what Steem, SBD and Steem Power mean in a separate post, and some of the excellent materials out there are extensive, I decided to write a shorter version. Some people might not want to read Dostoevsky to find a recipe for borsch.

What Are Steem and Steem Dollars (SBD)?

Steem and SBD (Steem Backed Dollars, or in short Steem Dollars) are the two liquid crypto currencies of the Steem blockchain.

Steem can also be found in a semi-liquid form, if it is transferred to Savings from your Wallet page in steemit, from which it can be withdrawn back to the liquid Steem after a 3-day waiting period.

You can convert Steem to SBD and vice versa using the internal market of steemit (from the dropdown menus on the Steem and Steem Dollars balances).

Steem (and sometimes SBD) can be traded on various crypto exchanges, for other cryptos, like bitcoin, etherium etc., and then exchanged to a fiat currency like USD, Euro, GBP, etc. if someone wants to.

What Is Steem Power?

Let's explain this through a metaphor. If we think of the Steem blockchain as a company, then Steem Power represents your long-term investment in the company. Steem Power translates in the blockchain into a number of VESTS, which would be similar to your stock shares in the company.

Selling "your shares" requires an operation called "power down" (from your wallet page on steemit, dropdown under Steem Power). Powering down lasts 13 weeks until completion, but you can interrupt it at any time. Every week you'd receive 1/13 of your SP back to the liquid Steem. It is highly inadvisable that you remain with less than 20-30 SP if you want to keep an active account, because you'll have bandwidth issues.

You can build up Steem Power (SP) from the rewards you receive from the rewards pool directly as SP, by powering up Steem, or even by buying it for bitcoin or etherium, for example, via Blocktrades.

UPDATE: I've decided to update the post to add an important information that came as an answer to one of the comments, because I know people rarely read the comments too.

Steem Power influences earnings from curation. It also influences your vote worth and the ability to help or to earn through delegation.

[...] the main objective for new members is to power up everything they can to Steem Power, so that they can increase all of the above.

What Is the Difference Between Steem and SBD?

Steem is really the blood stream of the blockchain, and without it, nothing would work. Its price influences the rewards pool, but also the current value of your account. New Steem is created with every block witnesses add to the blockchain.

As I've mentioned above, Steem is also used to power up your Steem Power or to put it in the Savings wallet, none of which you can do with SBD.

SBD is used to pay for various services on the Steem blockchain, and that was its initial purpose. However, sometimes Steem can be used too, but Steem Dollars has a wider acceptance for service payments, or at least I think so.

Steem, as all cryptos, was and is a highly volatile currency. Creators of the blockchain thought Steem would be volatile, while Steem Backed Dollars would be relatively pegged to the value of one US dollar.

At some point the pegging broke and SBD became much more valuable than $1, occasionally even more than Steem. This is viewed with good eyes because the rewards are partly payed in SBD (while SBD price is considered at $1 when rewards are calculated), but at the same time it has a bad effect on the long term stability of the blockchain and at some point its price will be forced, by various means, back into pegging to $1.