The Complete Guide on Steem Coin

The cryptocurrency market has grown tremendously during the past few years and currently stands at a market capitalization of $365 billion. As the market grew, many altcoins gained popularity — the Steem is one of them.

However, what makes the Steem cryptocurrency so popular? In this guide, I’ll provide you with a complete overview of Steem. That being said, you'll be able to answer this question with confidence. What is more, I'll introduce you to Steem's purpose, its team, history, and, of course, functionality.

Moreover, I'll also cover various cryptocurrencies associated with Steemit, i.e. Steem coin, Steem Dollars, and Steem Power.

Before rushing further, you should be aware of the fact that not all crypto exchange platforms and wallets are to be trusted. Choose such reliable cryptocurrency exchanges as Binance and secure wallets, such as Ledger Nano S and Trezor, to store your Steem coins safel

Steem Basics
Steem coin is the cryptocurrency of Steemit — a blockchain-based social media platform founded in 2014 by Dan Larimer (the CEO of BitShares).

Steemit is similar to Reddit, where users can create and publish their content online and get rewarded for it. However, there is one major difference.

Unlike any other social network, Steemit is based on the blockchain that allows it to be run in a decentralized manner. This means there is no censorship, no central authority, no downtime, no data vulnerability, and no data abuse. It solves a seemingly endless list of problems seen in centralized social platforms (i.e. Facebook, Twitter, etc.

Moreover, it also rewards its users with cryptocurrencies! So, instead of posting to social media, such as Facebook that cash in on ad revenue, you can post to social media and even get paid for it.

The Steemit blockchain actually has three different cryptocurrencies on its blockchain!

Let me explain the function of each one of them.

Steem
Steem coin is a fundamental cryptocurrency of the Steemit network, and the other two cryptocurrencies (Steem Dollars and Steem Power) are dependent on it.

Since Steem was released in 2016, the supply of Steem has automatically increased by 100% each year. This is what it’ll continue to do indefinitely.

Needless to say, Steem is different from other cryptocurrencies since it doesn’t only rely on mining to create new coins.

The Steemit network creates new Steem coins on an everyday basis.

75% of the new coins are divided between the authors and curators
15% of the coins are awarded to the holders of Steem Power
Only 10% of Steem block rewards are awarded to miners
Since more and more Steem is created every day, it is not recommended to hold it for long a long time. Instead, it should be converted to Steem Dollars, Steem Power or some other cryptocurrency like Bitcoin or Litecoin.

Steem Dollars, another cryptocurrency of the Steem blockchain, is considered to be more stable. It is intended to be valued 1:1 with the US dollar, which means that 1 SBD should be equal to the amount of Steem that can be bought with 1 USD.

It held the $1 value rather well until around November 2017 when it rocketed in price to around $13 by the end of 2017. It has since corrected itself, though, and is currently floating around the $1,07 mark.

As Steem Dollars are intended to be stable, 50% of the payment to creators and curators on Steemit is processed in SBD to protect them against the fluctuations of the Steem cryptocurrency. Steem Dollars can also be traded on several exchanges and it has a current market capitalization of $0.6 billion.

You can cash out your SBD by converting it to Steem or Bitcoin, and then converting it to fiat currency. You can also exchange SBD for Steem Power, another Steem currency which I will cover next.

Helpful tip: A key benefit to Steem Dollars is that, by holding them, you earn a 10% annual interest.

Steem Power (SP)
Steem Power (SP), the third crypto on the Steemit network, is a token that symbolizes how much of an influence you have on the Steemit platform. The more SP you have, the power you have.

So, holding Steemit Power gives weight to your voting in a 1:1 ratio. For example, if a post receives a vote from a user who holds 200 SP then it is 20 times more influential than a vote from someone who holds 10 SP.

It is a very important aspect of the Steemit platform because compensation is directly related to it. A post or comment will receive more compensation when upvoted by some with more power (SPs).

As a matter of fact, you cannot vote at all if you don’t have any Steem Power. Here are a few other interesting aspects about SP:

Steem Power is considered a long-term investment. In fact, you can’t actually sell it until you’ve been holding it for at least 13 weeks.
50% of payments sent to contributors are made in SP.
Unlike the other two cryptocurrencies on Steemit, SP cannot be traded on exchanges.
You can “power up” by increasing your SP holding or “power down” by cashing it out (exchanging it for Steem coin).
Well, that’s it for Steem crypto — those are the 3 cryptocurrencies on the Steemit network! Now, let’s move on to see how Steemit, the social-media platform, actually works.

Steemit Community and Curation
Steemit is trying to change the way social media platforms work. Unlike platforms like Facebook where users are not compensated for the content they create, Steemit rewards the platform’s contributors/creators directly with its Steem coin.

In addition to creators, curators are also a very important part of the Steemit community. Users who upvote and help evaluate the quality of content are called “curators” on Steemit.

In fact, curators are also rewarded on Steemit as they help to maintain the quality of the content! Pretty neat, right?

That’s what Steemit and decentralization are all about — the power is in the community’s hands.

Like Reddit, Steemit relies on its community to self-enforce the guidelines for user behavior. As of now, the guidelines are not as mature as that of Reddit, but they are a work in progress. They are ongoingly developing a community moderation guide called Steemetiquette.

A few important points that are emphasized by Steemetiquette are:

Citing sources and giving credit is encouraged.
There is a lot of emphasis on rewarding the original creator so original content is preferred when it comes to giving out rewards.
Avoid rewarding undesirable and spammy content.
The idea is to create a genuinely decentralized platform where users themselves decide which content is valuable, how good behavior should be incentivized, and how to create and maintain a positive community.

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