Steemit Powering Up Question
Hello all,
I have never seen a post on steemit focused towards discussion, but I was hoping it would be possible anyway! I've developed a few questions now that I've been on steemit for a while now and I was hoping this post would answer some of these questions not just for me, but for others who do not know the intricacies of the STEEM blockchain.
Post your own questions in the comments and I will add them to the question section below
Please let me know if any of the information below is incorrect, and I will update it.
STEEM vs. STEEM Dollars vs. STEEM Power
STEEM
- STEEM is the currency derived from the STEEM blockchain
- STEEM may be bought and sold on exchanges exactly the same as BTC, ETH, DASH, etc...
STEEM Dollars (SBD)
- SBD can also be bought and sold just like any other currency
- However SBD are not a crypto currency, they are a pegged asset of the STEEM crypto currency.
- One STEEM Dollar represents $1 worth of STEEM
- This means if
1 STEEM = $0.87,1 STEEM Dollar = 1.15 STEEM - Note that
1.15 STEEM * $0.87 = $1
- This means if
STEEM Power (SP)
STEEM Power represents your influence
- Affects how much you earn for curation rewards
- Determines how much of the reward pool your vote allocates
- A small amount of interest is accrued with SP but it is not significant
Converting STEEM Power to STEEM is a 13-week process
- This offers a good way of keeping STEEM in the economy rather than simply selling off when prices fluctuate
Questions
STEEM
STEEM Dollars (SBD)
STEEM Power
- If STEEM Power is directly correlated to influence, does this mean I can spend $xxx on STEEM from an exchange, power up all that into STEEM Power, and then become a very powerful user? Does this mean one can simply purchase influence, or is there some mechanism to avoid this?
- What is the algorithm that converts STEEM Power to upvote power?
Big thanks to @justtryme90 for shedding light on a lot of these questions
Converting from steempower back to liquid steem is a 13 week process and says so even in your wallet page. Two years was the original set up but was altered to be more investor friendly.
STEEM Dollars can also be bought and sold just like any other currency on bittrex, poloniex etc..
However SBD are not a crypto currency, they are a pegged asset of the STEEM crypto currency.
Steem dollars do NOT appreciate at 10% per year. The money came from the generation of new steem. SBD is a pegged asset so $1 worth of STEEM is held for every SBD in circulation (a portion of the daily reward pool can be allocated by the witnesses into the creation of SBD interest). Right now SBD appreciation is 0%
One can simply purchase influence. That is the whole point of the system and an attention economy. Why would anyone want to change it? It's what makes this unique.
Steem power effects how much you earn for curation rewards. As well as how much of the reward pool your vote allocates.
A very small amount of interest is accrued with SP but it is not significant. The majority of earned value comes from curation rewards and voting on good content.
Converting steem dollars into steem is just releasing the steem that are held as a part of the peg into your wallet. It is an inherent part of the blockchain and doesn't occur in anyone's wallet specifically (other than your own).
I think this addresses all of your points and questions. Please update the information at the start of your post, such that other users won't be missed by the currently incorrect information you have there.
Thank you very much for sharing your knowledge. I have updated the post with the information you provided.
Regarding purchasing influence, I would have thought this would be viewed as a negative, as if a large entity - say Pepsi - decided to advertise on Steemit, they could simply purchase huge amounts of Steem power. Please correct me if I'm wrong, but the reason this is good is because if a company like Pepsi were to buy a large amount of STEEM, the price would rise. So it is worth others buying able to buy influence because it appreciates your SP as well?