What is Steem?
Steem is basically a radical cryptocurrency that comes from Steemit, a social media platform built on the top of blockchain technology. Steemit is just like other content-driven social platforms like Reddit and Medium, however, the point that separates Steemit from others it that it rewards its users with cryptocurrency for posting content on the platform.
Publishers both amateur and experienced are provided with an opportunity to earn cryptocurrency just by posting their content whether curated or created on the blockchain based social media platform.
Steemit has three digital tokens, Steem, Steem Power and Steem Dollar, however, Steem is the foundation of the Steemit token trifecta and is accountable for the net value of other two tokens.
Genesis of Steemit and its purpose
Steemit was launched in 2016 and the platform has experienced a frenetic growth since then.
One of the main reasons behind Steemit’s increasing popularity is that the platform has solved the problem content creators had been facing since forever i.e. being unable to monetize effectively.
For decades, content creators had to go through every hardship and use every possible tactic in order to get paid for their content. These tactics, however, got too common and raised the heat of competition which resulted in much lower profit margins. Not only had those techniques affected the profit scale, but also the integrity of a creator’s work. Having no choice left, creators eventually turned towards the free publications sector of the internet.
The net results were drastic, with a broken content economy and heartbroken publishers. The economy is still not repaired much as still, creators have to bow down before consumers who leech on their content and blow it up with advertisements.
However, Steemit came as a ray of sunshine. The saying ‘out of adversity comes strength’ became true for Steemit, as Satoshi Nakamoto created the first blockchain and introduced the first cryptocurrency, Bitcoin. This gave Steemit’s co-founder an astounding idea which he hinted back in 2015 as a Mutual Aid Society (MAS), “a social network of giving you can count on when you need it the most.”
“When you join a MUXER society by helping to support their members you join a community of people who will have your back when you need it the most. It is through mutual sharing of life’s unexpected and undeserved burdens that members of a society gain peace of mind.”
Now, the MSA has evolved into a platform that solves both the problems of the content equation. It offers a third-party free, complete peer-to-peer experience to creators and also incentivizes consumers to reward their chosen publishers.
When a creator posts their content on Steemit, the post goes up for voting on the network. The users then cast their votes and the publisher is rewarded according to the votes. The more ‘upvotes’ a piece of content gets, the more the creator is rewarded in cryptocurrency.
Now that you’ve got the whole idea of Steemit, let’s get back to Steem, the cryptocurrency that is the foundation of Steemit.
How Steem works?
Steemit doesn’t actually shower cryptocurrency at everybody but instead, it rewards following a community-based vision. Active users which include content creators, upvoters and the ones that comment on posts get rewarded only.
Although the entire Steemit ecosystem is built on Steem blockchain, the cryptocurrency can also be used in the open market to buy Steem Power and Steem Dollar.
Steem has no supply limit and has a built-in inflation rate. To encourage participants and discourage ‘bag holders’ new tokens are created every day. Out of which, 15 percent goes to Steem Power holders while the rest of 85 percent to active users. Interestingly, the process corrodes Steem’s value thus enabling users to profit through participation, not speculation.
Steem Dollars (SD) are the individual units that are used to reward users on the Steemit platform. They are Steemit’s own “stablecoins” that are pegged to $1 USD Steem, enabling users to profit regardless of Steem’s value and also developing a balanced ecosystem.
Users having SD have the option to hold it, convert it into Steem, Steem Power and even cash it out.
Steem Power (SP) is simply a measure of how much ‘power’ or influence a user holds. The more SP a user holds the more value of their posts, comments and upvotes.
Users can boost up their influence or “power up” by purchasing SP via Steem or acquiring it by posting upvoted content.
Users can “Power down” by converting SP into Steem, receiving equal distributions of the Steem weekly for 13 weeks.
The Steem blockchain is nothing like other blockchains. Steemit employs its own blockchain utilizing a democratic mechanism.
As noted in Steemit’s blue paper, the platform is built on a delegated proof-of-stake consensus mechanism.
Steemit has a unique DPoS system. 21 witnesses are put forward to verify new blocks on the blockchain, out of which only 19 are selected by the community on the bases of “Witness proposal”.
Additional two blocks are then sealed by a miner or a backup witness, a randomly selected one that couldn’t get elected in the top 19.
Steemit is very vocal about its platform. With its huge user base, the social media platform appears as a threat to many cryptocurrency-related sites. Steemit stays in the blockchain/cryptocurrency niche and therefore any Google search related to the topics shows Steemit results on the very first page.
Other than that, Steemit has a Twitter handle with an army of 93,500 followers.
Team behind Steemit
Steemit is the fruit of excess brainstorming of BitShares founder Dan Larimer and his corporate executive-turned friend, Ned Scott.
Larimer is the CTO and the man needs no introduction. He is the visionary programmer behind BitShares, EOS and Steemit and the unique DPoS system.
While CEO Ned Scott as being a former Business Operations and Financial Analyst at the import-giant Gellert Global Group does a great job in the light of his experience and expertise.
Earlier this year, Steemit announced a partnership with a data monetization platform, DataWallet.
Soon, the DataWallet app will be available to Steemit users that will allow them to monetize the data of their online content.
“The social media monetization model is broken, both in terms of how platform users are rewarded, and how their data is owned and distributed. Steemit is currently working to resolve part one of that equation and Datawallet are tackling the second,” said CEO Ned Scott.
Despite the controlled inflation rate, the Steemit economy is thriving with Steem being the 28th largest cryptocurrency by value and $500,000,000 market cap.
Unlike other cryptocurrencies, Steem shows a rather different movement. The cryptocurrency surged in value in January 2018 while Bitcoin and other cryptocurrency did late 2017.
Where is Steem trading?
The pairs in which Steem is traded include BTC, ETH, KRW, and USD. Most of the trade volume is accounted for by Binance, Poloniex, Bittrex and UpBit.
Well, Steemit with its unique approach has managed to gather a lot of fans in just a short time interval. It’s providing a platform to content creators and has its own digital tokens involved. With Steem’s booming performance it seems like it will soon outstrip the balanced inflation rate.