Steemit

Steemit uses an algorithm to determine the value of each user’s contribution: the more a user contributes to the platform, the more his or her influence grows.

Users can be curators, contributors or both, and can write about most any topic, from mainstream to niche subjects. Like Reddit, content on Steemit is organized into sub-groups and topics.

The social network runs on top of a decentralized network called Steem. Like Bitcoin, Steem is a blockchain with transferable tokens. In the case of Steem, there are two tokens: the Steem token and the Steem Dollar.

The Steem Dollar is an asset intended to be pegged to the US dollar which can be used for payments for goods and services. Like Steem tokens, Steem Dollars can be traded at cryptocurrency exchanges.

Steem can also be converted into Steem Power, which locks up its value for a two-year period. During that period, Steem Powers in one’s account grow through a process referred to as staking, a method for validating and confirming data on the Steem blockchain.

The Steem token is the network’s base token used to reward users who upload articles, images and commentary, as well as those who source and upvote popular content. Steem is traded on multiple cryptocurrency exchanges and markets, and its value determines the value of posting rewards on Steemit. Its value also backs the value of Steem Dollars.

Despite a price surge during Steemit’s first three months of existence, a hack in July 2016 raised questions about security. At the same time, the craze surrounding the new social network draw attention from the cryptocurrency community.

Some members of the community voiced their concerns publically and pointed out the “ponzi scheme aspects” of Steemit, among other issues. The negative publicity pushed the price of Steem down by 98%+ from 4 USD/STEEM in mid-July 2016 to 0.07 USD/STEEM as of mid-March 2017.