Steem is the currency that fuels Steemit. It is the unit of measure of value on Steemit. It is dynamic in nature and has the ability to transform into several other currency units, including Bitcoins.
Steemit Currency Units
Steemit essentially provides three currency units:
This is acquired and traded in the free market, like all tokens. Steemit creates Steem daily, hoarding Steem could thus lead to dilution.
This is compared to a ‘share’ in the platform. Upon obtaining Steem power units, one waits 13 weeks to be able to resell them. This is a precautionary measure, as ‘investors’ cannot unexpectedly discharge and create a bubble in the market, resulting in its flopping. Holders of this currency are also entitled to ownership rights in the system. Growth in the system automatically mirrors into a growth in their units.
They are deemed to be the most stable seeing as they’re attached to the US Dollar. They were developed to ensure users did not suffer loss owing to the dynamical nature of Steem prices. Creators and curators of content on Steemit are rewarded using this unit. A Steem dollar parallels the volume of Steem that is correspondent to 1USD.
The Steemit Platform
One can acquire Steem dollars and Steem power by posting, commenting or curating content on the site. Steem has an inherent increase rate of 100% annually. It is also unique in that it does not have a coin limit.
Steemit creates new tokens daily, 15% of which are distributed in a proportionate manner to Steem power bearers. 85% is then used to pay content creators, voters and commenters. ‘Curator’ is the name used to refer to voters on Steemit. They gauge content based depending on traits such as relevance and facts, before voting. Just like Reddit, there exist no standard rules on the site and regulation is left in the hands of the Steemit society itself by means of its collective voting power.
Steem can be bought from a couple of coin exchanges. Currently, Bittrex holds approximately 73% of the cumulative Steem/BTC volume traded in the crypto market. This makes it the most popular site to acquire the cryptocurrency.
Ned Scott and Dan Larimer are the brains behind this project. It was presented in a white paper in March 2016. The concept being the creation of a collective content site, such as Reddit, where content and data was stored in a digital ledger. The idea behind this being to ensure the system remunerates all those who actively comment or post on the site. The site took a shot at ensuring good cyber etiquette by setting up a repute system through which participants records are used to influence their reputations.
How Steemit Makes Money
The site can be compared to a public company granting new shares to amass money for working capital. The explanation is that the site is constantly developing new currency units that are then granted to its participants. Tokens are then sold in the market.
Some people are of the opinion that granting of new units is a form of tax on the system’s participants. A consequent decline that results from granting of new units results in a minor fall in the currency, but at the same time remunerating operational users. The cost of Steem is essentially always going to go down, to permit content creators and curators to discharge successfully. This may however not always be the case. Should the Steemit site continue expanding significantly, the price should increase respectively.
It can be said with certainty that the cost of Steem is reliant on demand and supply waves of the free market.
Steemit grew tremendously in 2017, barely one and a half years since its inception. However, it is still a far cry from achieving its full potential. For instance, it presently boasts a mean of 27,000 monthly users, despite Reddit having around 542 million monthly users. It therefore still has a long way to go to achieve its ultimate goal.