Understanding Steem, for New Users Only!
Are you confused by all the terms we have on Steem like voting power, Steem Power, vote weight, etcetera? Would you like to have a simple explanation about how all this works on Steem?
Someone asked questions about this in my previous post and I realized that I had the same issues understanding Steem when I started. I thought that writing a post may help new users and I encourage you to click on the links in this post as they direct to useful information.
Understanding Steem, for New Users Only!
Here we go, you are new on Steem, you want to make some money and participate on Steemit the best you can, but there are some terms that you quite don't understand.
The main confusion is with Steem, Steem Dollars and Steem Power.
Do we really need three kinds of Steem?
Steem, Steem Dollar and Steem Power.
Let's see what they are.
Steem is a cryptocurrency like Bitcoin or Ethereum with its own blockchain. You can hold Steem in your wallet on the Steemit website, in a desktop wallet or on an exchange such as Bittrex or Poloniex. You can exchange Steem with another cryptocurrency instantly to transfer that in USD. You have the possibility to power up your Steem, which I will explain later.
2) Steem Dollar or Steem Backed Dollar (SBD)
SBD is supposed to be a stable currency pegged to $1 USD, but as we have seen recently its value can reach $10 plus as it all depends on the market. Nethertheless, there is a mechanism that will prevent it from falling below $1, so SBD increasing in value is a good thing. You can also hold or exchange SBD instantly in another crypto in exchanges like Bittrex or Poloniex. You can also use Steemit's own market to exchange SBD into Steem and Steem into SBD.
3) Steem Power
Steem Power or SP is the fuel to run your blog on Steemit. The more Steem Power you have, the more influence you can have on Steemit. You need a minimum of around 10 Steem Power for your account to run smoothly and much more to really start to have fun.
In order to have Steem Power, you have to power up your Steem. After that, you can't withdraw your Steem Power right away and you have to power down, which is a process that will give you back Steem over a 13-week period. You can't exchange it on exchanges, but you can delegate it or receive a SP delegation.
How does Steem Power works with voting power and vote weight?
I have about 550 Steem Power at the moment and I can vote 10 times at full voting power per day. One vote is worth $0.18 at 100% voting power and weight, and that means the total amount I can give on posts or comments is $1.80 per day. I can make more votes if I reduce the vote weight for each vote. I could do 100 votes at $0.02, which is a 10% weight, with 100% of my voting power.
You can use the upvote calculator here to see how all this works: https://steemnow.com/upvotecalc.html
With 550 Steem Power at 100% voting power and 10% vote weight, each vote is worth $0.02.
With 550 Steem Power at 50% voting power and 10% vote weight, each vote is worth $0.01, which is half the value.
So, how do you lose voting power?
You lose it when you go crazy upvoting all kinds of posts using more than what you have, like upvoting 20 posts at 100% vote weight, for example.
The voting power could be compared to the energy level of a character in a video game, which is going down as he performs some actions and has to be recharged to continue playing.
Read these 2 posts:
What is Reputation on Steem?
Your reputation depends on the age of the account, the number of posts, comments and upvotes you have. It is a score that evaluates the amount of value you have contributed to the Steem community.
Users on Steemit look at the reputation scores often to decide if it's worth the time to read a blog post because higher scores are usually a sign of better quality content by experienced users.
The higher your reputation is, the more effect your vote will have on the reputation of others. When another user upvotes your posts or comments, it increases your reputation score. Users with a higher reputation will have more of a positive effect and this goes hand in hand with their Steem Power.
If your posts are downvoted by someone with a higher reputation, this can push your reputation down and make your posts less visible, but users with a lower reputation score can't affect your reputation.
I hope that this post is useful for you to get started with Steem on Steemit.
Would you upvote this post and follow me for more because this will encourage me to write more posts like this one about Steem?
Would you please help @jerrybanfield become a top 20 witness because you can help funding projects to build Steem as explained here? Vote for jerrybanfield as a witness or set jerrybanfield as a proxy to handle all witness votes at https://steemit.com/~witnesses. Read the 5 reasons why I'm voting for Jerry Banfield as a witness and how to vote in my post.