What is Steem (STEEM)?
Steemit, STEEM and social crypto explained
What you need to know about Steem (STEEM), a social-media network powered by the blockchain.
Steem represents a fusion of ideas, drawing from both social media and cryptocurrencies to create a new kind of platform. Anybody can create, share or upvote content on the Steem network, earning cryptocurrency tokens based on performance within the community.
What is Steem?
|Icon||Symbol||Launched||Algorithm type||Max. supply|
|STEEM||March 2016||SHA-256||No max|
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.
Can Steem be profitable?
There are many opportunities to earn rewards by participating in the Steem network. Rewarding individuals for creating and curating content that provides value to the community is at the core of Steem. That being said, new users should have realistic expectations: it’s rare for an individual to have a first post go viral and earn a huge reward.
Because Steemit uses a voting system to prioritise quality content, there is a strong incentive for participants to deliver. Accumulating Steem Power (SP) is another way to grow your influence and earnings on the Steem network. The more you invest in the platform, the more influence your upvotes have, which in turn gives you further opportunity to earn rewards.
What to keep an eye out for
- Currently, Steemit is the primary application for Steem, although other social networks may integrate the Steem blockchain into new or existing platforms.
- Because users with lots of SP cast votes with more weight, getting flagged by one of these users can have a severe impact.
- The supply of STEEM increases by 100% every year, making it a highly inflationary currency.
What’s next for Steem?
- The developers behind the Steem blockchain recognise that Steemit is one of many potential applications that could benefit from the underlying software. The 2017 roadmap for Steem emphasises extending this technology to third-party developers. Adding microservices and public service endpoints will make the Steem blockchain easier for developers to work with.
- Steem is working on mobile apps for iOS and Android.
- Free drag-and-drop image hosting is being integrated into the Steemit platform.
- Several steps are being taken to improve user experience, including an updated user interface (UI), rebranding of Steemit and simplification of the signup process.
Frequently asked questions
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