Steemit

How does steemit work
** The purpose of this article is to explain how the Steemit platform works and its 3 currencies: steem, steem power, steem dollars.

As I explained in this article, the Bitcoin protocol initiated a new era by giving entrepreneurs the opportunity to invent a specific monetary system for their service. The social network Steemit backed by the digital currency Steem is the perfect example. We will see in this article how this social network uses steem currency to create a profitable economic activity for all of its users. Here is an introduction to the views of two prominent investors:

"Embedded in the Steemit white paper are racing in monetary policy, game theory, venture finance & currency design." - Naval Ravikant (source)
"This is the Decentralized Autonomous Organization model that many blockchain entrepreneurs are following today. I think Steem is a really interesting experiment that can turn into a really nice business. The Steem founders are experimenting in multiple dimensions at the same time. They are using blockchain technology vs some centralized system to build all of this. That's interesting. They could finance this business via their users vs VC or something else. That's interesting. And their users can participate in the value creation, if this turns out to be valuable. And that is interesting. I am rooting for Steem. "- Fred Wilson (source)

Steemit's mission
Steemit is a social network halfway between Reddit and Medium that aims to reward users who post and like content. Steemit's model competes frontally with almost all social networks (Reddit, Medium, Facebook, Instagram, Tumblr ...) whose use generates no revenue for their users.

The basic operation is very simple: You post content, people upvotent if they like. The more they upvot your content the more you earn money. Those who will be the first to identify posts that will be successful (by voting) will also make money.

Social Engineering: This encourages users to post quality content. At least content that the heterogeneous community Steem is likely to appreciate. Unlike Reddit, Steemit does not look like a kicker. Troller not bringing money, it's a behavior that tends to be extremely marginal on Steemit.

The architecture of this project
Little reminder. Generally the blockchain of a cryptocurrency is associated with an interface that is called a wallet. Wallets allow you to make transactions (send and receive money). When you send a transaction order, this order is received by the network computers (miners) which then process your request by entering your transaction in the blockchain.

In the case of Steem, the interface with the blockchain is the Steemit platform. On Steemit, in addition to orders to buy, sell and transfer crypto-currencies (indeed, there is not one but three currencies in the Steemit ecosystem), the publication of articles, comments and upvotes also send transaction orders to the blockchain miners.

Content storage. The textual content is stored directly in the markdown blockchain. Images of their size are stored on steemimg.com. In the near future, all content will be fully distributed without the use of servers (source).

The currencies of the Steemit ecosystem
To operate the social network Steemit is based on 3 currencies.

Steem (STEEM)
Steem Power (SP) or Vesting Steem (VESTS)
Steem Dollars (SBD)
Let's look at the particularities of these 3 currencies and how they interact with each other.

Steem (STEEM)
Mining. The steem is a currency based on the same general principles as bitcoin (public and decentralized blockchain). The miners that build the transaction blocks are called the 'witnesses' (source). The blocktime is 3 seconds. Even if the algorithm used is the proof of work, the construction of the blocks works in a different way than Bitcoin (for more information)

Distribution. Unlike other cryptocurrencies, the new mined stees are not distributed entirely to the miners (this aspect will be more detailed a little further in the article).

Acquisition of steems. You have three ways to buy steems:

by the mining
by purchasing from dedicated trading platforms [1]
by posting and likening content on the Steemit platform
Inflation of about 100% per year. At first glance, such inflation makes its price even more volatile than that of bitcoin or other currencies. One could even say that its value should only decline. But to think that, it would not be teni