Still Confused by Steem, Steem Dollars, and Steem Power? The Power Plant Analogy

last year

pp

Welcome to all of our new users! Like most people who discover Steemit, you’re probably wondering about the currency tokens: STEEM, Steem Dollars, and Steem Power. Why do we need three of them? How are they different? When will I get paid? These questions are understandable, but they focus on the pieces. What we really need is a 200-foot view.

Let’s power up the drone

The basics of Steemit are easy to understand: you make money by posting and voting on good content. But as you get hooked on the great articles and moneymaking potential, you’ll want to understand how it really works. Steemit and the Steem economy are a complex system with lots of moving parts, so you’re in for quite an education.

If you try to understand the each part of Steemit, you’ll get there eventually. But I think there’s an easier way to begin. Turn on that monitor, please, and I’ll take the drone over STEEM CENTRAL, our main power plant. When you see the whole platform functioning, I think you’ll have a better understanding of the parts themselves and the roles they play. It's an imperfect analogy, to be sure, but a helpful one also!

g

What Powers Steemit?

What powers Steemit? The blockchain spins the gears. Witnesses keep it honest. Developers enable the Steemit social media platform and the payment systems with which we interact. Average people like us provide the content that gives the site its chief value. And we curate it, too, deciding which content is rewarded. Everybody tells their friends about it.

Put that together and what does it give you?

Holy guacamole! If a holistic whole is what you want, here is a model for you. We can compare Steemit to a conventional thermal steam electric power plant. Steam power, get it? Wink, wink. Change the ‘a’ to an ‘e’. But before we go there, I need to explain how a normal steam power plant works.

By then, our drone should be in position.

Steam Power Plants

Thermal steam power plants are used to generate power from coal, nuclear, geothermal, solar thermal, waste incineration, and many natural gas sources. Though there are many variations, these plants basically turn heat energy into electricity. This basic model forms the bones for much of the world’s energy generation.

Here is a picture of a geothermal power plant in Iceland, which uses steam to convert heat from the earth into electricity. Don’t worry about pollution; there isn't much of that. It is just releasing extra steam into the air. This is a very renewable and sustainable energy source.

c

Here is a diagram of how the main parts of a steam power plant work:

1

A steam power plant requires water (which can be recycled and reused) and a heat source. The heat could come from geothermal, solar thermal, coal, nuclear, natural gas, or some other source that is hot or can be burned. A pump sends the water to a boiler, which heats it into steam, and then that steam powers a turbine. When the turbine spins, it creates electricity with help from the generator. The generator is connected to an electrical grid, and customers who plug into the grid are able to use that electricity. The steam condensate is then collected an cooled, and that water gets pumped back into the system for reuse.

The Steemit Power Plant

The weather is nice today and they have the top down. Love that retractable roof, Steemians! Did one of the witnesses spring for that? My, it's a sleek machine. STEEM CENTRAL sure looks so light and airy. Such a transparent place.

f

Now the drone is directly overhead. STEEM CENTRAL sits right below us and we’re looking down inside. The inner workings are plainly visible on our monitor. They look something like this:

c

Content provides the value to the Steemit social media platform. It is most similar to the water that circulates through a conventional steam power plant. Vaporized into steam one day, more content appears instantly. Content is ever present, always changing, and capable of reuse and regeneration as content creators contribute fresh ideas with new written blog posts, videos, photographs, art, music, and more.

The Blockchain drives everything, like the great pump at a conventional power plant. Spinning out new blocks, generating new data that grows continually, it verifies and enables transactions and posting information. Content can be posted, more currency can be created, and people can get paid. This beast never sleeps.

Steem Power (SP) operates like a concentrating force. Like a boiler, it superheats the content and creates steam. Oops, I misspelled that; I meant STEEM! When you earn rewards for posting and voting, part of this is paid to you in SP. When you Power Up, you are increasing your SP also. Congratulations, you are becoming a virtual Class A shareholder with your bucketful of shiny tokens. SP gives you stronger voting influence. It also gives you a virtual stake in the future growth of Steemit and the Steem economy, since most of the new currency tokens created are paid out to SP holders. Where does the real muscle come from? From your hard work, of course. Creating and curating content makes it all start to bubble happily.

Steem Dollars are the price-stable currency tokens that represent about $1 each in value. You will get paid partly in Steem Dollars (SD or SBD). There are so many possibilities with SD. You can spend these in the virtual economy which is soon to come, you can hold them and accumulate a 10% return, or you can sell or transfer them into Steem, Bitcoin, or other currencies. Like the turbine that’s spun by steam power in a conventional steam power plant, SD bridge the raw power of Steemit with the real world applications of a price stable currency.

STEEM is the liquid currency, much as electricity is the final product from a conventional steam power plant. You can transfer it, spend it, or Power Up into SP. Passing through this generator is the final step before the product of all your hard work is realized. Through bridges, gateways, merchants, and exchanges, your STEEM plugs right into the online economy. When the market cap of STEEM goes up, you are paid more for bringing your STEEM to the market, just as if wholesale electricity rates had gone up and a conventional power plant operator cashed in by selling it back to the customers on the grid.

World Domination

The drone is out of power now. We’re grounding the sucker. Fortunately, we have an appointment with the man himself, the evil genius in charge of the Steemit Power Plant. Let’s see what he can add to our understanding of how Steemit works.

b

What’s that? He says he has no time to speak at the moment. He’ll make one statement and that’s all the time he can give us. Let the great man make his statement:

“This Power Plant facility is a most impressive creation. And yet, my Power Plant is only the beginning. If you thought I would stop here, you were wrong. (evil laughter ensues) I will not rest until we have achieved total world domination. Onward and Upward, Steemians!

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!
Sort Order:  trending

I just signed up after some urging by my subscriber base on youtube. I am glad to be here and am excited to see what I can bring to the table.

·

Awesome! Welcome aboard. Please join Steemit.chat and contact me there; I'll be glad to help get you started and make sure you get some votes, etc.

·
·

how to convert steem power into steem ?

·
·
·

When logged into your account, you will see some drop-down arrows next to your balances. Next to the Steem balance, there should be an option to power down. It takes 13 weeks for the full amount, a one week wait for the first part of that.

·
·
·
·
·
·
·
·
·

I´m still not sure about it, however, I have learnt quite a bit. Thank you very much.

·
·
·
·

Do you mean it takes 13 weeks for the full amount to be transferred to Steam dollars?
Is that to prevent people from all 'withdrawing' their money right away?

·
·
·
·

Is it 13 for a certain amount or is it for amount? For instance if I make $100 do get ALL of it or do I get to only have a small percentage of it and the rest I get after 13 weeks. Seems like a long time to something you've earned. I don't know if this is worth it if that case.

·
·
·
·
·

Your Steem Power is locked up, but can be powered down in 13 equal installments over that many weeks.

·
·
·
·
·
·

Thanks for your reply and please do help out a newbie if you can and up vote.

·
·

donkey can you help me get some votes and give some advice and tips?

·

Good to see you here juniusmaltby.... i watch your videos on youtube.... keep up the good work!

·

Steem is very much in need of quality material. I am a part time travel blogger and I'm very much resisting any urge to post memes that appear to get attention, however detract from the blog and the purpose of my writing. good luck with your following here, too on Steem it.

Cheers,
Nick

Great explanation of steem power, dollars and how it works like a steam powerplant. I have a better understanding of how you simplified it for a new user to steem my self. Great post!

I have never experienced something like Steemit, this is too cool.

Do I spend SD when I up vote others?

Please follow my account, I post daily! :)

·

It does not cost you anything to vote. You are spending part of the daily reward pool, but your own money remains in your wallet. The more Steem Power you have, the more value you can allocate with those votes.

·
·

Understand, thank you very much for the information!

·
·

Thanks - I was confused before. But I think I understand now. If my wallet says I have the equivalent of $100,000 does that mean I can transfer to Bitcoin and eventually US dollars? I need a good Steementor!

·
·

Thanks for the information! So does that mean that the more Steem power you have te more steem dollars your upvote is worth? And does your Steem Power go down if you upvote?

Informative post. Though it would have been nice to give a little bit more info on Steam Power...the vesting period...how you can convert it to other currencies. Whether the vesting period starts when you power down or not and so on.

Thank you @donkeypong for taking the time to write such an informative post that helps newer people to the community like myself understand a little more about how things work. Following you and upvoting you. (and looks like I'm comment #200 here so obviously the community really appreciates your work). Thanks again!

·
·
·
·
·
·

you guys ever figured out how to explain STEEM a little easier? it's been a month and figured you might know by now

·
·
·
·

I got more confused.

·

I upvoted your reply to give you Steem Power! or Steem dollars, or maybe both, I'm not too sure ahah

·

They dont want us understanding it they just want us using it.. lol

·

SUMMARY: I understand @donkeypong to be saying, you get paid in SBD and can recieve 10% annual interest on it. You can buy products in the STEEM Market Place with SBD or pay to promote your content in the promotion section. If you want to receive money for your SBD, or invest in the STEEM crypto currency that is traded on the exchanges, you must convert it to STEEM. If you want to Power Up, since it's the only way to receive 90% interest or value on the SBD you have to first convert the SBD into STEEM and then convert it into STEEM Power by powering up. You can also withdraw SBD as real hard cash you can touch, by converting SBD into STEEM and then withdrawing it to poloniex where you convert it to bitcoin and then withdraw to Payza or Paypal, or your bank etc...

I am 99% certain this is what he was trying to say.

NOW HERE IS MY QUESTION.

  1. AFTER 7 DAYS, DO WE NO LONGER ACCRUE EARNINGS ON OUR CONTENT?

  2. DOES THE SAME APPLY TO THIS COMMENT IF I POSTED IT JUST NOW BUT THIS POST WAS POSTED 11 MONTHS AGO?

If it's true, that you no longer receive money on content more than 7 days old, then that will be the tragic flaw of Steemit, or the entry point for a competitor.

People will not produce long lasting high quality evergreen content, but quick timely content they know can run good for 7 days.

I hope that is not the case, but even if it is, it just means Steemit is more supplement and less disrupt.

Please reply if you know the answers to my questions.
@thelordesfinest @knircky @botomatic @drpeanus @stealthtrader @atomica @owdy @gregor-f @beastmastermason @doggguy @beadunks @vilivolcini @skapaneas @easteagle13 @bergy @monty-kirkman @paulmlomonaco @splatterhaus @leprechaun @darknet @johnmelendez @djleo @donkeypong @freedomrings @hitmeasap @bravenewcoin

·
·

Did you ever find out if you don't accrue on content after 7 days? I agree with you 100%, I was hoping to put some solid research in some articles but if I knew I'd only have 7 days to yield anything that would never be the case! Quick hits only!

·
·
·

Yeah um...wow...um WOW. THIS NEW FORK THEY JUST IMPLEMENTED IS AMAZING. My upvotes jumped 10x and in some cases 40x, from 0.01 to 0.10, AND ON THIS PARTICULAR UPVOTE IT SEEMS, when I added my vote to yours it jumped to 0.45 so that is a major plus. Regarding the 7 days, you don't earn after 7 days. I am sure of that. They stopped the 30 day rule.

Get busy upvoting or get busy dying.

·
·

I brlieve this is hoe it goes. I feel it is acceptable to repeat content.

·

Ohh yeah! This post is kinda confusing :p

·

While analogies make things clearer to you this one for sure has confused me more.

·

The way that I understand it, Steem Power is used to give people an incentive to keep creating and curating quality content. The more Power you have, the easier it is to have your content seen and distributed. An analogy, if this were twitter--SP is more like the number of followers you have. So by building power, you have a higher stake in the gaining of future currency that is released.

Hello I just found this article today and it's very informative; thanks so much for the amount of work you put into writing this and please keep sharing great content.

Grate article, I enjoy reading the blog. :-)

thanks you broke it down smother than a babys bottom

brilliant overview @donkeypong !

I'm still unsure about who pays for the content. I'll read the whitepaper today, but to me (new user), these posts aren't telling the whole story. Certainly there's a piece missing, but it seems like everyone is making money out of thin air. Where's the catch?

·

Everyone IS making money out of thin air. That's the catch. There is no catch. Just like Bitcoin and the US Dollar, Steem springs to life out of thin air.

When 12.5 new Bitcoins are mined every 10 minutes, they just appear out of thin air. That's approximately $8000 of new Bitcoin being created ever 10 minutes or about 1.1 million US dollars every day. The price of Bitcoin doesn't go down every day because of the newly created Bitcoin because people want to buy the newly created coins. There is demand for the new Bitcoins.

The Federal Reserve does essentially the same thing when it creates new US Dollars. Only it's network of miners are the Big Banks who take the Dollars the Fed created out of thin air and loan it out to businesses and consumers who want it to buy goods. They demand the new Dollars to make purchases.

The only real difference between Steem, Bitcoin and the US Dollar is how it's distributed. Since Steem is distributed to people who earn it by by using Steemit. Since Steemit is a sort of feedback loop (the more Steem you have, the more Steem you can earn) demand for Steem is created. And like other currencies or coins, where there is demand, there is value.

·
·

Can I ask you this: when I upvote someone's post am I giving them some of my Steem or is it being newly created? For instance, I currently have 0 Steem, a small amount of SP, and some SMD. I just upvoted your reply, and the $ didn't move at all. Is this because I have very low SP or because I have no Steem tokens currently?

·
·
·

When you upvote someone's post, or your own post for that matter, you are rewarding them with Steem Power (SP) and Steem Dollars (SBD) that will be newly created at the next scheduled payout. The amount of the reward your upvote is worth is based on the amount of SP you have.

For example, I have about 570 SP and when I upvoted your post just now, your reward jumped to $0.02 because of my SP. As you get more SP, your votes will be worth a bigger reward of newly created SP and SBD for posts you upvote.

·
·
·
·

@gregory-f: I liked your reply and tried to up-vote you. I have a huge amount of Steem Power and when I upvote people it is usually worth a couple of dollars to them. However, your balance didn't move. Is the reason:

  1. Because I can't reward posts older than 5 days? or,
  2. I already used my voting power for today?
·
·
·
·
·

Number 1 is mostly correct. You cannot give a reward to a post or comment that is over 7 days old. Actually the cut off for a reward is 12 hours before the 7 day mark.

Number 2 is a little correct, in that you have a limited amount of rewards available and every full power upvote reduces your voting power by 2%. You also recharge voting power by 2% every 2.4 hours. So if you only give out 10 full power upvotes every day you will stay close to full power.

You can see your voting power level here: https://steemd.com/@swissclive

·
·
·
·

You've given the best explanation i've read on this post. It's just simple.

·
·
·
·
·

Thank you!

·
·
·

Upvoting this because I wonder the same thing. When I upvote someone and say I had a lot of SP (which right now I have a new account) is that money that I am sending from my own account or is that being distributed from newly mined STEEM? Say I had a lot of SP if I upvote the hell out of everything am I essentially spending my SP? Should I be more careful in only upvoting the very best content? TY in advance for whoever can reply.

·
·
·
·

Upvoting everything is not a good idea. Steemit is designed for 20 upvotes a day. You could give up to 20 votes at full power and every vote over 20 would weaken the reward for all your votes. So voting for only the best content is better.

When you upvote someone's post, you are rewarding them with Steem Power (SP) and Steem Dollars (SBD) that will be newly created at the next scheduled payout. It does not come out of your SP.

·
·
·
·
·

gregory finally ,that was the answer i was looking for the whole day. Thanks man 🎉

·
·
·
·
·
·

Glad I could help.

·
·
·
·
·

This is very important and should be stickied somewhere.

·
·
·

I am also confused about this.

·
·

But you need lots of electricity to generate BTC.

And it's not same, BTC is limited while $ printing is unlimited.

·
·
·

Limited or unlimited, all money is created out of nothing. Some just takes a little more effort or energy. In the end it is not how money is created that gives it value, it is people who are willing to accept it as payment for goods or as a value transport that give money value.

·
·
·
·

Almost all . But that could change if we tried a Mutual Credit System such as Local Exchage Trading System.

·
·
·

I do pay for my electric bills too but I don't like mining with a cpu
instead mining with my brain seems much more productive...and efficient.

steem it just use the ledger to confirm transactions and not to generate value.. is the short answer to your question.

·
·

Sounds kind of like a ponzi to me.

·
·
·

Which one, The Federal Reserve or the US Dollar? Because if they sound like a ponzi, then you must have been listening very closely.

·
·
·
·
·

Who pays? The Steemit system "pays". With what? With crypto currencies called "Steem", "Steem Power" and "Steem Dollars". If no one in the world cares about those cryptocurrencies then, its like receiving emails from a stranger that have no monetary value. But wait! Steem is now accepted by other people to trade with their BITCOINS...and Bitcoin on the other hand is now accepted by many people in exchange fo their FIAT monies like USD and EURO and many other products and services too. While "we" exchange our time, intellect, effort and other incidental things too,- for STEEM. So it's not really MONEY OUT OF THIN AIR. Its a system of exchange.

You too, can learn more and earn more, if you trade cryptocurrencies. if you would like you can even join us in our project.
-east

·
·
·
·
·

I just invested in steem, may steem power be with you all :)

·

Steemit is showing how the future will possibly migrate to a 'different way of valuing something'. Essentially, money or currency as we know it (as a form of value-transfer) will no longer be the only form to 'recognise' value and then 'transfer' that value.

The blogging or written-word community has always had value, but fiat currency has been 'imperfect' as a medium to recognise that value and then transfer it. Steemit is a system that has been designed or tweaked to specifically capture the value from this type of community and then provides a pathway to ultimately transform it to bitcoin or fiat to use within a wider economic sense. BTC, fiat, DASH etc are what I call "Generalised Currency" where Steem is a specific one. An analogy would be the 'shopping car' versus 'the bus'. The shopping car is ideal to go shopping in, it's small, easy to park and very cheap to run but it holds at maximum 4 people. The bus on the other hand is the opposite of the car but it holds 100 people. They are both both modes of transport to move people around to meet their specific objectives i.e. those on a bus are dropped off at close to their approximate destination. Those in the car have a specific destination and can get much closer to their objective. We have lived in a world where only buses were available to transfer-value and 100% controlled by others (Governments & banks). That situation is now changing.

The value from products/projects like steemit come directly from those who use it (not governments or banks). Its value starts off at '0' but if it fulfills a need then value is afforded to it by that community alone. So basically, a whole lot of steem was thrown into a big pot and everyone was told to transfer it to others content (not theirs). At the same time a channel was opened up to traders to trade this steem money on exchanges if they thought it had value. So far they think it does because people are willing to give them bitcoin for it.

This is an approximation of what’s going on here. The future is going to be filled by thousands of these types of community valued products. This will not threaten the current financial system as some would have you believe. It will compliment it.

·
·

I think you are right, now that Steemit has shown that these communities have value and don't need some big corporation (which all started out as the same as Steemit was 4 months ago) to give it value and take all the proceeds for itself, we will see a lot more startups. If you look at the Steemit road map, there are already plans or visions to create many of these startups under Steem.

·
·

I'm brand new here; (as in yesterday) and am completely unsure of everything, but it seems to me that Steem arrives it's value out of the community of ideas, much the way the $ gets it's value from the faith in our form of government. The better your idea, or expression of it are, the more value it incurs ( think the U S government v. Zimbabwe, which issued a 10 trillion dollar note worth almost nothing).The more productive you are the more you should earn, as should be the case in any economy.

·
·

Thanks a lot for your info, i am new on this and yes it is a great time to live in! Good day people!

·

Still completely confused..... I converted 15 Steem Dollars into Steem and it did absolutely nothing... I have no Steem.

·
·

I looked at the history of splatterhaus' wallet and it shows a record of him receiving 15 Steem dollars but no record of them being converted or transfered to Steem. Yet his wallet reads 0 Steem dollars.

The dialog for converting to Steem says it will take a week. According to the history it has only been five days.

·
·
·

I don't know how I missed the 7 day wait thing... that's awesome, thanks for pointing that out Leprechaun!!

·
·
·

It has now been a week and I still don't see anything... am I jumping the gun and should just wait longer or.....?

·
·
·
·

Did you get it?

·

I think what you are questioning is, "how come I can trade my Steem for BTC?"

Well, because, much like the USD, people are willing to accept it as a means of exchange, there is a belief system.

Soon as that belief system no longer exists, there is no value in Steem. Much like the USD. The USD is only 'worth' the paper it is printed on. The belief system behind the face of that dollar bill, is what makes the note valuable. The belief and trust, that you can transfer it in exchange for another commodity, or service.

At least, this is how I see things. :)

Kind regards,
Optimistic

Thanks for explaining this in a simple way for all of us who are new here! I was quite confused at what the best thing to do with my steem dollars. 😊

"If you can't explain it simply, you don't understand it well enough."

  • Albert Einstein

Great analogy!

Very informative! Thank you!

Such a great post. Thank you! I was wondering what to send people to explain how this economy works. You nailed it!

Great creativity in this post, thanks for the info :)

i hope i can understand for the description. but its a good share for us, newbie, which already join with steemit.

thank you very much, and well done. i like it.

Thanks for making this this its really helpful with explaining how Steemit works!

That is a great well thought out analogy of how steemit works.

first pic is funny hahaha

This greatly simplies the overall functionality. I'll be sharing this article with the friends of mine that I'm introducing to Steem.

This is great! I'm going to post it on our internal team Slack at #bravenewcoin. Keep Up the good work.

Regards,

Ricardo Goncalves (BNC Steemit Community Manager)
sig_bravenewcoin_smlsig_twitter sig_linkedin sig_facebook sig_reddit sig_steemit

Nicely put and thank you! Very helpful

Simpsons and geothermal steam turbine power plant. Nice combo bro !

Thanks for vivid explanation.

  1. What I am interested what happens with steem platform when fiat currency is used to buy steem? What happens with fiat currency? Who benefits from it?
    As far i understand market price of steem goes up, and we as shareholders have potential to bennefit from it. But how does it affect us when big media corporations or social netwotks come in with their money, except we again profit form market price rising. They with big steempower can present their content and push it onto us. In this early stage, those who accumulate lot of steem have nice prospects when price is rising.
  2. How does say in example it benneftis steem and community if big corporation enters this network? How is then steempower distributed and who rules the steem i that scenario?
  3. Is steem in that case more powerfull and we are we as normal shareholders like sheep on field being led by corporations?
·
  ·  last year

I think what Steem needs is a system that gives more preference to our "friends". Otherwise we basically have a reddit that is, in a sense, less organic as you can pay your way to get to the top.

This is a nice explanation especially I'm new here on Steem. More Steem Power!!!

I don't understand why the introduction of yet another coin was needed.

Its very complicated and I'm still learning. I think I get it. But why be evil? (innocent eyes beg question)

Thanks! Great explanation

That starts to break it down nicely, breaking down the blockchain!

Fantastic

Thank's you for great explanation! I have already read several articles about it but this one is the best😃.

Outstanding post for we the rookies! Congrats!

Cute :)

I was quite confused until I read your article, well put and finely articulated! Thanks!

I'm definitely following you now. Great explanations for us noobs :) much appreciated!

hey @donkeypong your images are missing, I saw them the other day but they are gone now...not sure if it is just my PC, can anyone see them? I only see text?

How do you power up your steem into steem power?Thanks for the great post

  ·  last year

Thank your for the info.

Finally got the workaround with steem power. Thank you!

I will be buying some right away now that i understood the concept.
Iam excited to see where steem will go and am happy to be a part of it.

Love it how you give us a example.....and thanks for sharing.

Thank you. Your post has helped me.

interesting but hard to understand ))

I converted Steam Dollars into Steem about 10 days ago and still nothing.... I have no Steem. Where did the Steem Dollars go and why is there no history on the transaction? Why is there no Help button or support, because it's in Beta??

Mind checking out my Steem Power tutorial to see if it's up to snuff or needs improvement? https://steemit.com/steem/@imjefe/adding-steem-power-in-less-than-5-minutes

I got confused as I am new to this. thanx for the post!

Its all a bit of blur at the minute there's so much information but not finding what I need at the minute, I'm looking for how to load a picture. Thanks for the information above, I think I will need to read it a couple more times to let it sink in

Thanks for great post.

I was taught that if you can't explain something succinctly then you probably don't understand it or you are hiding something. This post is VERY confusing. It reads like a typical scam.

Nice explanation. I have also written a post explaining how Steemit is the evolution of capitalism

https://steemit.com/steemit/@kyriacos/steemit-as-the-evolution-of-capitalism

Really love the analogy. Its a great way to explain to someone unfamiliar with the concept and currency changes.

thank you for this informative post!

I'm still unsure what the hell is going on but this article has been the best at explaining it to me.

....i'm seriously not even reading this.

Thanks for the information and analogy. This really helped me to better understand steem and the steemit platform. Thanks

·

I'm glad you found it helpful. Thanks for the feedback. Be careful with these older posts, since many of the rules on Steemit have changed since then. This particular post is fairly accurate still except for the much lower inflation we have now.

I am still confused also. What is the power up or down doing and when should it be done? Is there a page that has like a tutorial for us who are not tech types?
I do hope to one day understand this type of currency. Thank you all for being willing to help.

·

You can power up if you want more voting power in your account. Otherwise, it's fine to keep it in Steem. The inflation rate is much less than when this article was written. If you need help, you can form an account on steemit.chat and contact me there.

·
·

Thank you. As others have said, Time to read the white paper.

Guys all currency whether a country coin or a virtual coin is only valuable because people have came to a consensus that the particular coin being used represents a value or exchange of goods. In other words it has value because me and you agree to make it so. Fiat currencies like the dollar are based on the fractional system which means that they don't need to back up the coin with any real assets like gold, they literally keep making the money out of thin air and inflation. Back in the day people used to trade with salt and gold and that was the consented currency. Today we have crypto-currencies which have value because people like you and I give it a value and accept it in exchange for goods and services, this is not true for all crypto-coins some of them have failed because no one wanted them.

·

Good analogy

had to read this twice to understand and still not there. I value the weight of the author on this article but it leaves to many gaps to understand the focus on his interpretation.

brilliant and sarcastic way to explain it. never say impossible to a dreamer :)

do they have an actual power plant?

This was entertaining and informative, thank you. Resteemed.

·

Thanks. It's an old article, given the development that has taken place in the months since, but mostly it is still accurate, aside from the inflation aspect. Inflation is much lower than it was at that time.

Nice story, thank you very much for this explanation. This is truly great information! :)

Great analogy. I read the Whitepaper and was able to understand it, but this makes a real world scenario easy to understand as well.

Thank you so much for the explanation.

Great post. I am also new and had a killer week. Currently in the process of shifting all my work over to steemit.

I have a question.

Does SD always aquate to 1 STEEM or $1 USD? For example: If you are holding 100SD and the price of STEEM goes to $3 are your SD worth $300 USD or $100 USD or 33.3333 STEEM?

·

That's great! Really enjoying your photography work so far. Please contact me on Steemit.chat and we can discuss further.

·
·

I havent used the chat yet. Is it the same login details as my steem account?

·
·
·

It's different. Just go to Steemit.chat and it should let you sign up & pick your own password, etc.

·
·
·
·
·

@donkeypong should respond here and not in chat because I want to know too

love your analogy and thank you for taking the time to create - Im still not sure whether to invest in steem or steem power though??

·

Steem Power if you want some voting influence and/or are interested in earning rewards from curating other posts. Otherwise, holding Steem is fine. Please contact me on Steemit.chat if you have more questions.

I'm from a science background so I had fun reading through the entire content...very well put and nicely explained...really helpful for newbies like me on steemit...I'm still waiting for my first credit even though its gonna be few cents but I guess I will be able to understand it better once I have coins to play around and see the best suitable way to hold and invest.

I still don't comprehend fully, but I'm getting closer, so thanks.

·

I've been able to understand more thanks to the discussion here.

Thank you for this very informative post.

you can hold them and accumulate a 10% return paid every month

This sounds way too good to be true. Is this correct? If so, why wouldn't everyone do this? How can 10% monthly returns be sustainable?

·

Thanks for your comment. People are paid monthly, from what I understand. But I have removed the monthly reference so as not to cause any confusion.

·
·

Is this based on the average SD holding amount for the month or some other metric? Also, it seems like my SP goes up slightly without reason. Could you explain how that works? I'm also curious of some various strategies for long term holders, middle of the roaders (hold some, spend some), and regular profit making investors. Has such a guide been made yet? Would be great to also have each strategy evaluated based on a rising STEEM price, a falling price and a flat price. Heh, now I'm thinking about the details for miner rewards, witness rewards, market maker rewards... Lions and tigers and bears oh my! I need to read the white paper again.

·

10% yearly, paid monthly I imagine, although i'm not sure muself, I thought it was continuous

·

The returns will be sustainable as long as steemit is growing at that rate or higher.

I do know steem power is so you get more money from your posts and you get it by upvoting other people's post, but do I have to power down to get the affects?

·

To get Steem Power, you can either earn it from activity on the site or you can deposit Steem and power it up. When you first get started, there is only a small amount in your account, so it does have a large effect on rewards. If you keep working hard and accumulating more through posting, commenting, and voting, it will grow over time.

·
·

Thanks for the explanation.

Wow that clears it up for me thanks so much!

Hi there im still confused by one thing:
Is there a negative affect of upvoting?
Or in other words: Why would i not want to upvote every article and comment?(just throrethical, not that upvoting bad content would be a good thing).

Thank you very much for this post. This is the clearest explaination to me personally thus far that I've heard.

Could you talk a bit about strategy in terms of these 3 different options. Do we let it all sit in STEEM power? Is that more beneficial? Do we put it in our "savings" is that how we earn interest? What is your strategy for which of these 3 storage options for lack of a better word. HOpefully I'm understanding the concept

Ok, I'm still about a month new. Thanks for explaining. I see I have a lot more to learn. I'll be making comments and blogs in the meantime.

·

That's the best way to start out and get to know people. Hopefully, as you start posting and commenting, you'll pick up some followers and some votes also.

Awesome post. Thank you!

I guess it's called get rich or die tryin... And I really mean it lol

While I am still confused, I can at least say I was entertained by your writing style

great way how you compare the steemit and steam engine! upvoted and followed for more such content! ;)

This was huge for me to understand - thanks for an outstanding educational post. 06/20/17 - and still on point.

Very helpfull thanks

Great way to explain it!

This helped me! thanks!

Read again... Thanks. This really helps.

It was a nice read, but as a newcomer, I still don't understand the complete process. Maybe I shouldn't be too lazy and start reading the white paper :-)

Great post! Finally kinda know what the difference between these 3 things are. Upvoted!

good analogy for teaching newby like me ,thanks sir

Thanks for the great info. Can you also what the ratio is for Steem power to Steem when powering down? From my understanding when you power down it takes X number of weeks but I haven't seen if the Steem Power to Steem ratio is 1 to 1 or something different. I am no wear close to being ready to power down but still trying to learn as much as I can on the workings of system. Thank you for educating us.

This is very helpful my good man! I posted about how Steemit could potentially wipe out world hunger and poverty. Yep, it could if you add up the numbers! What do you think? https://steemit.com/cryptocurrency/@mikebike/does-steemit-have-the-power-to-eradicate-world-hunger-and-poverty

Cheers!

Mike.

·

Thx...this help alot

How am I missing your posts lately? I keep finding them a day later :P

Maybe we need some alerts for people we follow? Just a thought.

Oh, and great post once again!

@donkeypong, thank you for the simple explanation, the steem generation plant and the open top car. I think now I understand the jargon a bit better. The question always asked is how steem is generated? As I read in the comments below, does it spring out of thin air?. I hear the jargon mining and creating blocks. OK in steemit we have witness instead of mining as in BTC. I understand author content create value and value is money that comes to the reward pool to be distributed. More content, more value, more steem generated. And witness are the account keepers to see that it is done in ethical way and they get rewarded for the witness service.
As we don't see steem like we see a Fiat currency like $ or £ , it is difficult to comphrahend the invisible.somewhere I am missing the dots. I will keep in touch with this post to see if more clarity emerges in coming days.
But thanks again for your steem factory generation analogy and the pretty drawing. You sure know how to put it across to a newbie like me.

This article was amasing. You are good man! Keep writting!

Great article! So if you get more steem power, you're upvote is worth more steem dollars?

I don't Understand!

Muy buena explicacion. Dejo mi voto!

https://steemit.com/@jhelbich

great explanation and analogy to a steam power plant. Definitely helps to clarify all those questions for a newbie Steemian.

One question in order to invest in Steem Power, what is Better to by Steem Dollas or Steem? I really do not get it. THANKS

Excellent explanation, just what I needed! I'm so happy to be a part of this community!

A very enriching article that helps us better understand the operation of Steemit. Steam or Steem is pretty confusing ;-)
Good continuation +++

This is totally confusing. How about a simple answer the question? WTF is Steem vs Steem Power vs Steem dollars. Now I have to go to youtube and find the answer

So I maybe over simplifying, but steem power is just basically a stock of the Steemit company?