Steemit Newbie FAQ - Rewards: Were Does The Money Come From?

in #steemit7 years ago (edited)

Sine the last post about basic features of the Steemit platform was so well received, I decided to continue. Today, we're going to talk about another topic which is extremely popular: how (and why) do you get paid?

For What Am I Getting Paid In The Steemit Platform?

You can get paid for writing articles, comments and for upvoting (curating) other articles or comments.

If I Write Something And Nobody Votes It, Am I Still Getting Paid?

Nope. It means nobody found your content worthy of attention. You get rewards only when somebody upvotes your content.

In What Currency Am I Getting Paid? I See A "$" Sign Near My Rewards Number

You're getting paid in a combination of 2 currencies and 2 types of storage. Let me explain:

the currencies are:

-- STEEM, which is a currency produced by the Steem blockchain, the same way the Bitcoin blockchain produces Bitcoin
-- Steem Backed Dollars (SBD), which is a smart contract on the Steem blockchain, intended at creating a peg between the USD and the Steem. In other words, SBD is "1USD worth of STEEM". That means one SBD should always worth one US Dollar. Lately, the peg was broken, because SBD is in high demand, so right now one SBD trades at around $2.

the storages are:

-- liquid currencies: your Steem and SBD balances are liquid, meaning you can transfer and transact them immediately
-- vested currencies, namely Steem Power. Think of Steem Power like some sort of a deposit which blocks your Steem in a special account, from which you can take it back only by powering down (see below).

You see the "$" sign because the conversion is done automatically by the platform.

What Is Powering Down?

Powering down is a process of withdrawing your Steem Power from the vesting storage to your liquid storage, in 13 equal weekly payments. So if you have 13,000 Steem Power and start powering down, you will get, each week, into your Steem wallet, 1000 Steem, for 13 weeks in a row.

Why Is It This Steem Power Good For?

Steem Power influences the power of votes in the Steem Platform. When you vote an article or a comment, you take a specific part of the reward pool and allocate it to that content, based on how much Steem Power you have.

Is That All?

Nope, when you vote, you're also eligible for a curation reward. The rewards a post receives are split into author rewards (going to the author of the post) and curation rewards (going to the voters and distributed based on the amount of Steem Power they have at the moment of voting).

How New Steem Is Generated?

By inflation. Just like any other token minted by a blockchain, Steem has a fixed inflation rate which "prints" (or generates) new coins every day. This inflation is the reward pool.

How Is The Reward Pool Organized? Everything Is For Writers?

Nope. Only 75% is for writers (and curators). 15% is distributed to witnesses, for maintaining the network, and 10% is allocated as interest for the Steem Power holders.

How Big Is The Reward Pool?

Roughly, every day around 43,000 Steem are allocated to the authors. When Steem was trading at $0.16, that meant a total of $6,880 / day. Now, when Steem trades at $2.3, that means $98,900 (almost $100k / day).

How Long Does It Take To Cash Out For A Post?

Around 7 days. During this time window, your post is "open" meaning it can accumulate or lose rewards based on the upvotes/ downvotes it receives.

Are the Rewards Displayed Guaranteed?

Since during the 7 days window everybody can upvote / downvote your post, nothing is set in stone. No reward is guaranteed until the blockchain actually is disbursing the rewards in your wallet.

What Are Minnows, Dolphins and Whales?

These are names (specific not only to the Steemit platform, but common in other blockchains as well) designating the worth of a specific account. At the current values, a minnow will be somebody holding a few hundreds dollars worth of Steem, a dolphin will be somebody holding anything between thousands and tens of thousands dollars worth of Steem and whales within hundreds of thousands and millions dollars worth of Steem.

How Much Does It Costs To Transfer STEEM From One Account To Another?

Zero. There are no transfer fees between Steem accounts.

How Long Does It Takes From A Transfer To Clear?

It's instant.

Is Writing The Only Way To Get Steem / SBD?

Nope. Steem / SBD are traded on popular exchanges like Poloniex and Bittrex. But it might be cheaper to get them by writing. If you write good content, and other people are upvoting you, obviously.

Other posts in this series:


I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running.
For the Steemit ecosystem I created a free tool for checking your potential rewards at steem.supply.

Dragos Roua


If you appreciate my contribution, you can vote for me as witness here:
https://steemit.com/~witnesses

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Thank you for sharing this. I found it very helpful. I am still new to Steemit and learning its little nuances.

Hello my friend, can you help and upvote my post with my son, on 4-th it's her birthday and I want to give a little gift.
https://steemit.com/family/@cobran/my-boy

Thanks!

Thank you very much for your detailed information for newbie. Many friend in my following list had resteem your post today! You make me understand more about steemit and how it is work! Looking forward to see your new posts!

Thanks, glad it's useful :)

Hello my friend, can you help and upvote my post with my son, on 4-th it's her birthday and I want to give a little gift.
https://steemit.com/family/@cobran/my-boy

Thanks!

New to this...two days, but any advice re steempower gratefully accepted . I have upvoted you, if you like my posts and videos, I will be posting lots of awesome videos -please UPVOTE ME.

This is, by far, the best explanation of Steemit that I have seen! Outstanding work. RESTEEMED.
☆☆☆☆☆😎

Thanks, glad it's helpful :)

You're welcome.

Hello my friend, can you help and upvote my post with my son, on 4-th it's her birthday and I want to give a little gift.
https://steemit.com/family/@cobran/my-boy

Thanks!

Excellent explanation! this information should be on the welcome page before/after signups for newbies to understand....

Glad you find this useful.

Hello my friend, can you help and upvote my post with my son, on 4-th it's her birthday and I want to give a little gift.
https://steemit.com/family/@cobran/my-boy

Thanks!

New to this...two days, but any advice re steempower gratefully accepted . I have upvoted you, if you like my posts and videos, I will be posting lots of awesome videos -please UPVOTE ME.

Very well written piece. Very beneficial for information on Steem and what everything means. Thanks a lot.

any advice re steempower gratefully accepted . I have upvoted you, if you like my posts and videos, I will be posting lots of awesome videos -please UPVOTE ME.

Nice article @dragosroua. One question though. Isn't it so that interest is now zero? It says so on the wallet page

For SBD interest is zero. Steem Power still receives interest, AFAIK, but it's very small.

Ah ok! Most of our capital gains comes from the steem price increase i guess, so interest isn't that important then..

Yes. Interest to SP is just a little bit of incentive to hold it, apart from what you get in curation.

Ah i do have a question about that though. I now have 50 SP (up from 8 a week ago) and still have another 50 in the week waiting list.

Still curation offers me 0. Can you give me an approximation of when that will change?

EDIT: you might want to consider doing a newbie faq on rewards. Like when does your upvote go to 1 cent and when does curation start doing stuff etc etc

For curation, you need to have at least 100 SP, otherwise the rewards received for curation will be so small that will get lost just by rounding.

Upvoted!

Lol... I also asked the same question the first time I heard about steemit.

I love how you explain this in detail @dragosroua , gonna share this to my newyly-signed up friends , upcoming joiners and to the large group in facebook we've created for steemit. Thank you and more power!! :-))

Thanks, glad you found this useful!

This is very helpful. Could you elaborate on the USD peg mechanism in a follow up post?

Thanks for the suggestion, wrote it down and queued a post on that.

very good.
Earlier you mentioned something about
assignment of someone to vote for witnesses

I've been thinking about that.
could you expand?
are you available?

You can proxy your witness voting power to an account. Basically, you trust that account to be good enough and make wise decision and empower the owner with your SP. You can do that on the voting witness page.

So once you proxied your SP to somebody else, every time he or she votes for a witness, you will vote too.

empower the owner with my SP.
ONLY for witness voting?

I can see why this might make some evil whales unhappy.

:)

ok...you got my proxy.

Thanks :)

Kick some whale ass...you and I agree on more things than we disagree on...

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