Steem blockchain teminology

in steemit •  3 years ago  (edited)

The reason I am writing this, is to help some of newbies to catch up with new terminology Steem blockchain uses. 

I had hard time understanding all this when I started, thought it would be good idea to list them down. Fundamentals might be hard to grasp in, but once you do know and understand them you come to appreciate the Steem and see future.

  • STEEM -  Steem, tradeable tokens that may be transferred at anytime. STEEM.
Steem is the fundamental unit of account on the Steem blockchain. All other tokens derive their value from the value of STEEM. Generally speaking STEEM should be held for short periods of time when liquidity is needed. Someone looking to enter or exit the Steem platform will have to buy or sell STEEM. Once STEEM has been purchased it should be converted into SP or SMD to mitigate the impact of dilution over the long-term. STEEM is constantly increasing in supply by 100% per year due to non-SMD incentives. Someone who holds STEEM without converting it to SP is diluted by approximately 0.19% per day. 
  • STEEM POWERS -  influence tokens that earn more power for holding long term and voting on posts. The more one holds the more one can influence other’s rewards and earn rewards for accurate voting. SP.
In the cryptocurrency space, speculators jump from cryptocurrency to cryptocurrency based mostly on which one is expected to have short-term growth. Steem wants to build a community that is mostly owned and entirely controlled by those with a long-term perspective. Because Steem wants to encourage long-term growth, it is hardwired to allocate 9 STEEM to Steem Power (SP) stakeholders for every 1 STEEM it creates to fund growth through contribution incentives.  
SP is a requirement for voting for or against content. This means that SP is an access token that grants its holders exclusive powers within the Steem platform. Transferring from STEEM to SP is referred to as "powering up" while transferring from SP to Steem is referred to as "powering down." For example, one can power down their STEEM over a period of two years, yet one can power up their STEEM instantly
  • STEEM DOLLARS -  Tokens worth about $1.00 of Steem. SMD.
Stability is an important feature of successful global economies. Without stability, individuals across the world could not have low cognitive costs while engaging in commerce and savings. Because stability is an important feature of successful economies, Steem Dollars were designed as an attempt to bring stability to the world of cryptocurrency and to the individuals who use the Steem network. Steem Dollars are created by a mechanism similar to convertible notes, which are often used to fund startups. In the startup world, convertible notes are short-term debt instruments that can be converted to ownership at a rate determined in the future, typically during a future funding round. A blockchain based token can be viewed as ownership in the community whereas a convertible note can be viewed as a debt denominated in any other commodity or currency. The terms of the convertible note allow the holder to convert to the backing token with a minimum notice at the fair market price of the token. Creating token-convertible-dollars enables blockchains to grow their network effect while maximizing the return for token holders. 

Let me know if it helps...

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