Once upon a time, in a virtual digital reality far away, there came to life, the blockchain.

This post is a special request done for @karenb54 in a reply at a post about Bitcoin, Graphene and the future. And I have done these kind of requests before on the Steem on Graphene blockchain. It is intended for the new to the blockchain fellow Steemers, whom I hope to be at service for with this post. So here goes nothing... Bare with me on this one, okay?

And here we are, down the first rabithole, allready...

Once upon a time there was a blockchain

A blockchain is in effect a very large database. But, one that is mathematical interwoven through the complex calculations of cryptography. In such a way that you are not able to pull one out, put another one in, without messing up in such away that everybody can prove it was fixed. All the data is put in so called 'blocks' and then there is a difficult calculation done to prove that this is a unique block of information. And also, very important, that it is locked into all the previous blocks before. Mathematics will prove this, without any doubt. Humans could not calculate these complex crypographic numbers, but as it happens, we have computers for that.

The computers that hash the data are being called 'miners'. Because they dig for the right figure, and when they do, they hit the jackpot. Because they get rewarded with so called 'coins'. And these are just zeros and ones inside a computer memory. When a computer claims to have found the right puzzle solution it will send this over the internet to all the other connected computers. They are decentralized connected in a so called peer-to-peer network. Now, the cool part is that all the other computers just need a counter value from the solving computer to see it is true. Otherwise they would have to do all those time and energy consuming calculations over again. So, if it is the right code, then all the other computers state this over the network and a new block of data is accepted into the chain.

While the finder of the code gets the reward, and hey presto! There is the valuta, or coins that come into excistence inside a blockchain network. (Now I over simplified this, but hopefully you are still with me here on this one.)

But on Steem(It) it works just a little bit different

There are many types of Blockchaines, all with their own unique set of features. Bitcoin is a well known one and the first that many people started to use. Steem(It) uses a different type of blockchain technology, known as Graphene. And in effect it just means that this interwoven chain of datablocks uses a different way of putting information into a block and securing it with complex mathematics, known as cryptography. The marvelous Graphene technology can handle a lot of information at the same time at very high speed. Steem, build upon this, has it's own type of data that creates so called 'transactions' that need to be calculated into a locked chain of information.

And here we have SteemIt coming into the picture, just creating the transactions that will be put into a block, that will be calculated and secured into the whole chain of data. These transactions are not only payments, but also, maybe you allready guesed it: posts, replies and then some more things like selling and buying on the Steem market. That is in effect Social Media on a blockchain. And because it needs to be locked in the chain by complex calculation puzzles, cryptography, it generates value when it is being solved.

Again, this is simplefied for sake of the explanation, please remember that.

All that Steem calculated into excistance gets put into a vault, ready to be given away

There is a lot of activity at SteemIt dot com, which is, in effect, good for the amount of STEEM created. Fresh, new and original content is important, because that generates new STEEM {STM}. Now, how this is divided depends upon the community. This is done by voting. But not one Steemer, one vote, but by the Power that Steemer has. The more Steem Power, visible in your wallet, the stronger voting power. Many votes count too, but just a bit. So that is why many Steemers love to get votes from the so called 'Whales'. The ones with a lot of Steem Power, think hundreds of thousands to millions.

Most of them did not earn that by posting, but by buying Steem and doing a so called 'Power Up'. That is when somebody moves their Steem (The actuall coin) into Steem Power. And that is actually an investment, because you can Power Down again But it will take 104 weeks in total of equally divided amounts of Steem to get this investment out. That could be quite nice, a payment every week, if you'd had the Steem Power to do so. Steem Power is also known as VESTS, so the link to an investment makes a kind of sence.

But the payments, how about that then, with them Steem Backed Dollar {SBD} and so on?

The votes you get for a post, or a reply, come with a potential value attached to it. Now this value fluctuates due to the market price of Steem, keep that in mind, because STEEM {STM}, as a coin can be exchanged. Some like posting, some liek reading and voting, others like trading and so it goes. But this effects the price of Steem and so the value behind the '$' sign. Please be aware that this is a potential value. It is not the absolute value that you will receive. But when is that? Well, normally a round is 12 hours. And after that there are some calculations done first.

A part is used to support the network. Because the blockchain needs to get going, data needs to be added, complex cryptographic calculations need to be made. Over and over again. And this backbone gets a part of the potential payout. And what is left will be payed to the one that made the post. There too is a clever bit, that is important to understand. Because half what is left after the network support is deducted will be payed to you in Steem Backed Dollar. This you can get out right away, if you want to. The other half is calculated against the current market price of Steem and is put into your own Steem Power investment vault. Increasing your voting power.

You could exchange your Steem Backed Dollar by means of Blocktrades for Bitcoin and than trade it for fiat money. But you can also keep it and get interest on it. Also your Steem Power will grow like magic, even if you went away for a while. But many do use the Steem Backed Dollar {SBD} right away.

Just some small tips to round things off for the time being

It is possible to go even further down the rabbit hole. But in how far do you know where our fiat money comes from, if I told you it was generated out of thin air, would you stop using it? What I mean by this is that the Steem on Graphene blockchain is a very smart thing, the developers could be considered magicians. And some basics are handy to know when you are an active member at SteemIT dot com. Things like I did my best to explain to you in this post. And I hope it worked for you.

Most of the time I advise fellow Steemers to post the way they are. Stay close to your true self. And I know there are those "Do this and succes is guaranteed", well I think that is just well, eurm, you know. Some things do help though. Put an image in for instance. And I do upvote a lot of replies, just like the like button in Facebook. But voting around a lot might bring your value that you give by that down.Also effecting your reputation, as many things are connected in effect to each other in the realm of Steem on Graphene and thus on SteemIt dot com.

Do hope it helped a bit and if you have questions feel free to ask. Also, if you want to add some, or know more about reputation, be free to add it in a reply.

Steem on!