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RE: Could someone explain Steem to me like I am a three year old?
Steem power and influence are the same thing here. You can 'power up' your steem directly into steem power (which is instant), and convert your steem dollars into steem to use for powering up (once you click 'convert', it takes a week before the conversion is complete). Note that this will make these (re-invested) funds unavailable for withdraw.
And then what's the long term benefit in this?
It increases your reputation on Steemit, which makes your votes more powerful (including votes for yourself every time you post - so it makes your posts more visible and likely to earn more money).
Steem power is also a long term investment that is kind of like an equity position. It accrues interest rapidly (this is offset by value dilution due to the steem equivalent of inflation). It can't be taken out at a faster rate than 1% over the course of two years, so it really is a long term investment. If Steemit and the Steem token are successful, Steem Power may be worth quite a bit of money in the future. If they are unsuccessful, it will not be worth so much.