What Is Steem?
Many seem to misunderstand what Steem is. This is understandable considering the world of blockchain and cryptocurrency is really confusing.
So what is Steem?
It is a blockchain. What does that mean?
At its core, Steem, like every other blockchain is a distributed ledger. That is it. It is a giant Excel spreadsheet run on computers all over the world. It is nothing more than an accounting function.
Exciting isn't it?
Actually, this is what makes it so powerful. All economies are made up of businesses which utilize a simple concept called double-entry accounting. This is a bookkeeping system where every entry requires a corresponding one. An expense on my books has to show up as revenue elsewhere.
Blockchain takes this one step further by creating triple-entry accounting. Here, both transactions are recorded the same way with one addition. The entries are cryptographically validated by a third party. The blockchain is the third party which uses the blocking process to secure the transactions.
Some want to claim that Steem is social media. This is a bit misleading since most everything on the Internet today is social media. It is true that Steem is an interactive medium where people can create and share information, ideas, or anything else they want. Of course, as you can see, this encompasses most websites out there. Amazon is social media as is Linked In, ESPN, and most anything else with a comment section.
Over the next half decade, as we see our digital worlds expand, this will only grow. The Internet will be something that we interact with providing all kinds if information throughout the day.
Steem is actually a platform that allows people to build businesses. The blockchain is coded with a rewarded system that can be implemented into these businesses to provide incentive to the users. When one does something on Steem, he or she can be potentially rewarded for that activity.
This is a very important concept. Steem has some unique features that separates it from most other blockchains. Every blockchain is a ledger while all public ones can allow people to build upon it. Steem is one that adds this reward system that enables one provide value to others through an upvote.
Another feature that cannot be overlooked is the ability to delegate STEEM in the form of Steem Power. This allows for one to enhance another person's account (power) while still holding the tokens.
Smart Media Tokens were meant to duplicate this process for any token created on Steem. Unfortunately, nobody is aware of when this will come in being.
Yesterday, I wrote a post about an announcement that I think is one of the most important for Steem in quite sometime. Steem-Engine is going to solve this problem by introducing the SCOT. The Smart Contract Organizational Token is based upon the SMT White Paper and the code already placed in Github. It is in testing right now and should go live in May. Considering the track record of this team, I feel they will most likely hit that timeline.
This will differ from SMTs in that it is a layer 2 solution. This means it is not part of the blockchain coding. There are a number of advantages to that, one being speed. Nothing that takes place at this layer will affect the base coding. When putting SMTs in the blockchain, the entire coding system has to change to make sure the present features are not affected. This slows things down.
Having this layer is very important because it gives businesses the ability to provide extra incentives to their users. This is going to enhance their branding because they have a way to monetize activity on their sites while enhancing the name recognition. The potential to create greater loyalty is provided through the monetization process.
Ultimately, if the blockchain excels are attracting businesses, STEEM will be the secondary token. The user focus will be on the specific application used and the token associated with that one. There will be many, if not most, instances where the user might not even be aware of the blockchain he or she is on. In fact, there will come a time when an application works on different blockchains with the separator being which log in someone uses. An interface like Busy.org, for example, could be on Steem and another blockchain. If I log in under my Steem account, then those posts are directed to the Steem blockchain while one signing on under, say, EOS, would post there. Of course, when on the Busy.org interface, both posts would be seen exactly the same.
Mystery comes in using big words that carry little meaning to people. We live in a world where certain people make a lot of money because they use terminology nobody else understands. The legal profession is like this. When you strip down what Steem is, it is a rather simple concept. Ultimately, it is what is built upon this blockchain that carries the power. With the development of more applications, the number of potential people who will be attracted to this ecosystem grows.
Fun times are ahead.
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