What Is Steem, Steem Dollars and Steem Power In Simple Terms?
I received a request through a comment from @omnithumbs on one of my recent posts which says:
A good guide. If you could elaborate on steem power and how it plays a role in steemit too then this could serve as the best go to guide to get started on steemit for new users.
I could've replied to the comment, but then I thought I never touched the subject, thinking it was already widely covered by other Steemians previously.
I still encourage researching on your own, when you have questions that you find intriguing, because you'll find much better answers (an entire web of them) to fill the void.
However, since I haven't previously explained what Steem, SBD and Steem Power mean in a separate post, and some of the excellent materials out there are extensive, I decided to write a shorter version. Some people might not want to read Dostoevsky to find a recipe for borsch.
What Are Steem and Steem Dollars (SBD)?
Steem and SBD (Steem Backed Dollars, or in short Steem Dollars) are the two liquid crypto currencies of the Steem blockchain.
Steem can also be found in a semi-liquid form, if it is transferred to Savings from your Wallet page in steemit, from which it can be withdrawn back to the liquid Steem after a 3-day waiting period.
You can convert Steem to SBD and vice versa using the internal market of steemit (from the dropdown menus on the Steem and Steem Dollars balances).
Steem (and sometimes SBD) can be traded on various crypto exchanges, for other cryptos, like bitcoin, etherium etc., and then exchanged to a fiat currency like USD, Euro, GBP, etc. if someone wants to.
What Is Steem Power?
Let's explain this through a metaphor. If we think of the Steem blockchain as a company, then Steem Power represents your long-term investment in the company. Steem Power translates in the blockchain into a number of VESTS, which would be similar to your stock shares in the company.
Selling "your shares" requires an operation called "power down" (from your wallet page on steemit, dropdown under Steem Power). Powering down lasts 13 weeks until completion, but you can interrupt it at any time. Every week you'd receive 1/13 of your SP back to the liquid Steem. It is highly inadvisable that you remain with less than 20-30 SP if you want to keep an active account, because you'll have bandwidth issues.
You can build up Steem Power (SP) from the rewards you receive from the rewards pool directly as SP, by powering up Steem, or even by buying it for bitcoin or etherium, for example, via Blocktrades.
UPDATE: I've decided to update the post to add an important information that came as an answer to one of the comments, because I know people rarely read the comments too.
Steem Power influences earnings from curation. It also influences your vote worth and the ability to help or to earn through delegation.
[...] the main objective for new members is to power up everything they can to Steem Power, so that they can increase all of the above.
What Is the Difference Between Steem and SBD?
Steem is really the blood stream of the blockchain, and without it, nothing would work. Its price influences the rewards pool, but also the current value of your account. New Steem is created with every block witnesses add to the blockchain.
As I've mentioned above, Steem is also used to power up your Steem Power or to put it in the Savings wallet, none of which you can do with SBD.
SBD is used to pay for various services on the Steem blockchain, and that was its initial purpose. However, sometimes Steem can be used too, but Steem Dollars has a wider acceptance for service payments, or at least I think so.
Steem, as all cryptos, was and is a highly volatile currency. Creators of the blockchain thought Steem would be volatile, while Steem Backed Dollars would be relatively pegged to the value of one US dollar.
At some point the pegging broke and SBD became much more valuable than $1, occasionally even more than Steem. This is viewed with good eyes because the rewards are partly payed in SBD (while SBD price is considered at $1 when rewards are calculated), but at the same time it has a bad effect on the long term stability of the blockchain and at some point its price will be forced, by various means, back into pegging to $1.
A good intro to Steem, SBD, and Steem Power. :D
Does Steem Power influence anything else like earnings? This is what I had initially misunderstood when I started out. I had thought Steem Power increased earnings. From your post it influences the bandwidth mainly which is what I understand after my friend, @kittysilhouette, cleared things up for me.
Maybe personal research is necessary to get a complete picture. However, information is scattered about and hard to process. This is one of the reasons my mom is not getting started with steemit even though she's into reading and writing.
Yes, good question! Steem Power influences earnings from curation. It also influences your vote worth and the ability to help or to earn through delegation.
I didn't go into all the details here, but I've written before in several posts, the main objective for new members is to power up everything they can to Steem Power, so that they can increase all of the above.
If the information can be found in different places it's a good thing, because you can see more opinions or different ways they are presented. Yes, sometimes simpler explanations are needed!
I'm Soo glad @gadrian and @omnithumbs are covering this topic! Steemit is surely quite vast, I'm still in the kiddy pool most of the time. It's nice that we have this discussion going over the different steem assets.
I'm curious, is steem media tokens coming into play yet? Can any steem user get these tokens or they're like erc20 tokens and a risk of being a scam?
Smart media tokens (SMT) are not yet available. They are most interesting in the first phase for developers who choose to integrate them in their apps and create their own tokens. You, then, as a user of the respective app, will be using the special tokens they create on that app (instead of Steem and SBD). These tokens will probably be exchangeable for SBD or Steem.
One advice I would give you @kittysilhouette, if I may, based on what I've seen about your account, is to let your voting power replenish and then keep it above 80%. It matters greatly for your vote worth.
How can I monitor voting power and how long does it take to replenish? Doesn't every vote count?
You can monitor your voting power from here: https://steemd.com/@kittysilhouette
You can upvote 10-11 times at 100% to make sure your voting power will be back to full the next day.
Voting power replenishes 2% every 2.4 hours. In your case you either stop voting for a few days completely, or vote less than 10 times per day for a longer period of time until you go above 80%. I recommend the first one, because it's quicker.
Once your Steem Power increases a bit (enough to split the vote without having a zero worth I think), you can use @busy.org to upvote at less than 100%, and be able to cast more than 10 votes per day.
Ooo steemd is pretty nifty. Thank you @gadrian for sharing your knowledge ^0^ knowing this now certainly changes the game =D
There are plenty of other tools one can use. I put together a list when I was a newbie myself here: https://steemit.com/steemit/@gadrian/what-steemit-tools-i-use
I'm glad I could help! Whenever you have more questions, go ahead, and I'll do my best to answer.
I can also be found on steemit.chat (I think I'll receive an email if someone tries to contact me and I'm offline, I have the same username there). Or Telegram.
Hello gadrian!
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