STEEMIT 101: REWARD SYSTEM ON STEEMIT

I have come to realize that newbies have more questions to ask when it comes to steemit rewards. I was prompted to do this research after I was bombarded with questions about rewards on steemit by someone I was trying to convince to join the steemit train. I couldn't give satisfying answers to most of his questions so I took it up as a challenge to find more detailed answers which I'm willing to share here to help others.

Some popular questions newbies ask are:
-How do steemit users get rewarded?
-Where does the reward money come from?
-How do I earn on steemit?
-What does Steem Dollar, Steem Power and Steem mean?
-How much money can I get from a post?

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In an attempt to answer these questions, I will strongly advise newbies to so their own research because like I said, it is an attempt and therefore might not be broad or all encompassing. So please DYOR.

STEEMIT CURRENCIES
I'll begin with steemit currencies. When you check your steemit wallet, you'll see that there are three(3) currencies there which are Steem, Steem Power and Steem Dollars.

1. STEEM: It is the cryptocurrency of the steem blockchain. Steem is similar to every other cryptocurrency like Bitcoin, Ethereum and the others. This means it can also be found on exchanges like Bittrex and Poloniex and can be traded just like all others. It can either be powered up or down and can be traded or exchanged for Steem Dollars.

2. STEEM POWER(SP): This can be said to be the weight or influence a steemit user has on steemit. Do not confuse this with the user's reputation.Steem power basically affects the worth or value of a user's upvote. The more steem power a user has, the more value or worth his/her upvote carries. Not only does a steemit user with very high sp give quality upvotes, he/she also earns more from the 25% curation rewards given from a post's payout.
Confusing? I'll suggest you read on.

3. STEEM DOLLAR: Steem dollar with the abbreviation SBD(Steem Backed Dollar) is another steemit currency which can be easily liquidated, that is, it is the steemit currency that can be easily turned to cash. It was originally designed to be equivalent to not more or less than USD 1. But as we have all witnessed for some weeks now, it has risen in price to as high as $17 and has continued to dwindle between $5 and $10. This is due to some factors that we aren't going to be discussing here. SBD can be traded for steem and can also be transferred to other accounts for commercial purposes.

SO WHY DOES STEEMIT BOTHER TO REWARD ITS USERS?

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I also asked myself this question at a point in time after I joined steemit in October. Why would steemit want to give me money? By giving me and other users money, the founders of steemit are also making serious money. How? I'll explain. We'll use me for this illustration/explanation...
So I make this post and I get rewarded after 7 days in SBD and steem power(which also includes steem. Don't forget I said steem is the official currency of the steem blockchain). I get excited and tell others about steemit. They register, create quality contents, get rewarded, get excited too and the cycle goes on making steemit popular. All the while, steem is used as the incentive currency I.e the currency in which the reward is given. This makes the value of steem shoot up and therefore makes millions of dollars for the founders and shareholders of steemit.

Steemit also rewards it's users in order to encourage people who put their brains to good use through creating wonderful and quality contents. Ever heard of bitcoin and proof of work? To mine bitcoin, you have to use a super powerful computer to solve some really complex mathematical problems. This concept is known as proof of work. When work is done correctly, bitcoin is earned. This is the same for steem. Only that here, your brain is used in the 'mining' process and it is therefore known as proof of brain. So, steemit rewards users for their proof of brain. Isn't that wonderful?

Steemit users have two methods in which their proof of brain can be rewarded. I'll just mention them briefly and move on. They are:
1. Author rewards: when others upvote a post or comment published by you, you get author rewards
2. Curation rewards: When you determine a post published by another author to be valuable enough to be upvoted by you, you get a share from the value of the post after payout. How much share you get depends largely on your steem power.

I'm afraid that will be all for this post. We shall continue from here in my next post. (Steemit 102)

Please do upvote, comment if this has been of help to you and resteem so this can be of help to others as well.

Thanks for reading!