Demystifying STEEM is a series of posts targeted to new Steemians and for people outside of the STEEM blockchain.
The purpose is to try and break down the many complexities of the STEEM blockchain, its acronyms and the current facts and falsehoods associated with it.
I say ‘current’ because within 6 months some of the things I say may well no longer be relevant. It is an evolving experiment, and little remains static.
It's little wonder that the retention rate is abysmal given the huge learning curve a new person needs to endure. Without some guidance, most give up quite soon deeming it bewildering and over-complicated.
Most people are initially attracted to STEEM for the money. Despite what everyone says about, ‘I’m not in this for the money’, most of us really are or we would not be here.
Now I'm going to get the smart-arse twat who pipes up, 'I'm not', so I would say to them, ‘Why don’t you go post your content on Facebook, Reddit or Medium then?’
So why bother, the money is bad.., you just said it!
Well, that's easy to answer. Because everywhere else gives you 'NOTHING', that's why.
I have said it many times and I'll say it again. 'DON'T DO IT FOR THE MONEY.'
I don't much like the word 'money' as the technical term is 'rewards'. By posting or curating using SteemPeak you can gain rewards in the form of STEEM, STEEM Power, and STEEM Dollars.
- Posting means creating some kind of blog content yourself.
- Curating means voting up or down the content of other Steemians.
STEEM is the BASE Cryptocurrency and is considered a liquid asset. Liquid meaning you can trade it for BitCoin. In turn, BitCoin can be traded for Pounds, Dollars or Euros.
STEEM Power (or SP) is converted STEEM that increases your Voting Power (VP). The more VP you have the greater your vote weight or influence is.
1 STEEM = 1 STEEM Power.
STEEM Power is not liquid but can be powered down over 13 weeks, which is 1/13th per week. Powering down means it becomes STEEM again and trade worthy.
STEEM Dollars (SBD) is yet another cryptocurrency you can earn as author rewards. 1 SBD is supposed to equal 1 US Dollar, but this is rarely the case as it fluctuates in value.
Author Reward: A varying amount of STEEM, SP and sometimes SBD you can gain for creating a post. Author rewards are sometimes a combination of STEEM and SP and at other times, SP and SBD.
Curation Reward: A varying amount of SP you can gain for voting someone else’s content.
Author rewards are sent to your STEEM wallet 7 days after your post was created.
Your cut of Curation rewards is sent to to your STEEM wallet when the author rewards are paid for that 'someone else's' post or content.
Until day 7, any pending reward is just that. It’s not yours until it has been delivered to your wallet.
Where does the money come from?
It doesn’t come out of thin air, or does it?..., yes it does.
Like our banks who print money every day (yes they do!), STEEM produces more STEEM every day which is called the 'reward pool'.
STEEM is inflationary, just like Sterling, Euros or the US Dollar.
It's filled every day and emptied by the days' end. You can get a cut of this STEEM, depending on certain factors.
- Your write blog posts or articles
- You curate
- You are a witness
I’ll leave the last one alone for the moment as your brain may be bursting as you read this (if you are new or not even here yet).
- 'Your write blog posts or articles'
Simple, write something, add some pictures and in 7 days you will get 50% of the displayed pending reward.
50%, WTF... I thought I got the full amount?
Well, that brings me to point number two.
- 'You curate'
Curate means to vote. You see, those people who have been giving you votes (that is using their STEEM power stake), want something in return.
The other 50% is split amongst the voters.
Simply put, the bigger their vote; the bigger their cut.
It's not as simple as this, but hopefully, this makes sense.
You can vote on other people's blogs or articles and get a split portion of this ‘other’ 50% too.
Here comes the catch. The more STEEM you have powered up, the bigger your cut.
As a newbie, you will have just 15 STEEM Power (SP). It’s probably not enough to get even the smallest slice of curation and that 15 STEEM is not exactly yours.
‘it’s a loan, that will last until you have 15 STEEM Power of your own’
To get in on this, you need to buy STEEM and power it up. It’s like holding shares and getting a dividend, only daily.
But you're new, and you don't want to buy STEEM or invest anything.
That's OK because it's not necessary to buy any, but it will accelerate your growth tremendously if you do.
The Importance of Voting
Vote often, but not too often as you only have so much Voting Power (VP). Voting Power regenerates over time, and simply put you have TEN 100% votes you can use every day.
24 hours later the VP expended on those TEN votes is back in your Voting Pool. Confused?, I am not surprised.
I use the excellent Steemworld to monitor my VP. Use it in a browser session and you will find it an imperative tool though some use other means to monitor their VP.
To try and put things simply the 100% you see will become 80% if I cast TEN 100% votes on other people's content. That's 2% used per full vote.
Within 24 hours it will read 100% once again. It is wise never to leave your VP at 100% as you are then not fully utilising it.
Why is it important NEVER to have your VP at 100%?
It won’t get beyond 100%, there is no 200% VP!
As I mentioned above you can gain curation rewards for voting on other people's content. The higher your VP is, the greater the weight your vote is, the greater your curation reward will be when the post pays out.
You can vote all day if you like and your VP will never reach 0%, but the weight will be so diluted it will no longer be worth using for voting purposes (if you have little SP).
STEEM Power and its Significance
STEEM Power gives you a larger vote weight which in turn gives you more influence and greater curation rewards.
As a new user, you will gain little or zero curation rewards, this is due to you having low STEEM Power.
You may think that your vote is worthless due to this fact, but I would implore you to still use your voting power no matter how small your VP may be.
Don’t be tempted to use the vote slider if you have little SP. Cast 100% votes and you may gain a small curation reward.
This will restrict how many votes you can use per day, but take my advice and ALWAYS use 100% votes until you have a decent amount of VP.
Don’t vote comments, vote on posts. With a small amount of VP comment voting will yield you nothing, unless you’re casting it for reasons other than monitory ones.
Claim your rewards. If you don't they will sit around unclaimed and your stake size will remain the same. Make use of the SP, STEEM and SBD's you gain as rewards.
As a newbie, your rewards will mostly be made up of Author rewards.
As a large STEEM Power holder, your rewards will be mostly made up of Curation rewards.
You don’t need to buy into STEEM to gain rewards. I did, but I see it as a long-term investment with a daily dividend.
Just like owning shares in a blue-chip stock I own part of all this and reap my daily dividend, but unlike stocks, mine is delivered in SP (Steem Power) via curation rewards.
If you found this article so invigorating that you are now a positively googly-eyed, drooling lunatic with dripping saliva or even if you liked it just a bit, then please upvote, comment, resteem, engage me or all of these things.