What is Steemit and How it works? 2020 Guide

What is Steemit?

In order to explain what Steemit is , it is convenient to return about 10 years ago, to the birth of Bitcoin. In late 2009, Satoshi Nakamoto published an article explaining a new P2P protocol that described how a digital currency based on blockchain technology works. Since then, this has been considered very useful in the field of economics, as an efficient alternative, an accounting book in which to record all transactions in a certain network. However, over the years it has been shown that its usefulness transcends these limits, having different applications in many other areas.

Steemit was created by Ned Scott and Dan Larimer, the creator of the renowned exchange Bitshares . It is a social network built at the top of the Steem cryptocurrency blockchain, which seeks to reward its users as bloggers and critics, while maintaining the basic principle of decentralization, fairly and, of course, self-sustaining.

That said, we have Steemit differentiates itself from other similar social networks in the way that the information generated within it is stored. Typically, these platforms safeguard all content on their own servers, while Steemit writes it to its own Steem blockchain permanently. Here is his important relationship with the crypto world.

How does Steemit work?

Steemit works as a social network, within which, registered users can upload and share visible content to other members of the network, who will be able to vote, good or bad, for said publication. Similarly, make comments and receive rewards from them for the vote of their counterparts within the platform.

When a Steemit user publishes certain content and receives a vote, it acquires a value that is distributed equally among the tokens of the network. 50% corresponds to consumable money, which is represented by Steem Dollar, while the other 50% corresponds to voting power in Steem Power, which can be used to value other publications. With this, the developers try to promote the participation of their users in the creation of content and, in this way, keep the community active.

As we already said, Steemit stores all the information generated within its platform in its blockchain, with the slight exception that they have a separate server for the images that accompany their content.

However, within the operation it is also worth mentioning the way in which Steemit users can interact with publications to fulfill the purposes described above.

Upvote , which is very similar to the famous Facebook “Like”. With Upvote, users express their liking for the published content and, in this way, it acquires value.

Downvote . In contrast to the previous function, it is equivalent to "Dislike" or "I don't like it". As expected, it is an option that prevents certain content from acquiring value and limits its visibility to other users. In general, the Flag is used to rate Spam content, which can include plagiarism, offensive language, incitement to violence, among others. Given its influence if applied, Steemit users need to make proper use of it, otherwise they could lose reputation.
Reply . With this option, registered users can comment on posts and likewise reply to others in the process.
Resteem . Again, another similarity with another social network, such as Twitter. With Resteem you can share the content that we consider to be of better quality or to our particular liking.
Steem controls published content not on the basis of premeditated rules by developers, but on what is known in this medium as “community moderation”. This means that, although there are no guidelines that indicate which post is appropriate or not, the voting process carried out by the same members of the community has served as a filter and reference to implicitly stipulate them.

By the way, at this point it is worth mentioning the "healers". With this name, Steemit users are known who have the task of verifying the information of a certain publication. They review the sources to avoid qualifying plagiarized articles, and evaluate their content in terms of quality and relevance, to later give their vote, leaving aside personal criteria.

How to register with Steemit?

Signing up to Steemit is extremely simple, and for this, it will be enough to follow the typical steps of entering the platform of a social network. We must specify an email and, of course, a username with which we can identify ourselves within the network. In addition to this, there is a two-step verification, since you need to add a phone number.

Once this information has been provided, Steemit will proceed to evaluate the entry of the new user to its platform. Then, they will send an email to the specified address, and here comes one of the most peculiar and salient points of this matter. Steemit will assign the password to the user and send it in the message in question, without the possibility of customizing or ever changing it.

Once the process is finished, we can enter the network with our username and password, and start sharing and commenting on content in exchange for Steems.

Never forget your password

The golden rule when registering and starting to use Steemit is: Don't lose your password. This platform, unlike its counterparts, does not have the options of Recover password, which means that, in case of losing it, there will be no possibility of changing or recovering it.

Remember that this network generates the password of each user, randomly, which implies that it is probably very difficult to remember mentally. To avoid bad times for the loss of our assets and reputation within Steemit, we recommend copying the password in a safe place that we can consult in case you have forgotten it.

How is Steemit made up?

Once Steemit's operation was described in detail, it was time to explain its three main components. These are represented by the Steem, Steem Dollar and Steem Power, which we will talk about below.

Steem

Steem is the official cryptocurrency on which the Steemit community is based. This can be obtained either through the purchase from an Exchange, or from the performance and work that I dedicate to Steemit, and for the latter, Steem Power is necessary. Steem can be exchanged for other digital currencies for Bitcoin and others.

It is important to note that, unlike other cryptocurrencies, Steem does not have a limitation control in terms of unit generation. The amount of Steems is increased by 100% annually, so there is no fixed amount, but it increases every year.

Steem Dollar

The Steem Dollar is presented as an asset that must have more or less the same value as the US dollar, just like stablecoins do . They understand a way to gain from interacting with Steemit content. Once obtained, users will be able to use them just as they do with a cryptocurrency, or turn it into Steem Power.

As we have said, Steem Dollars maintain a 1: 1 ratio with the US dollar. They generate 10% annual interest as long as they remain within the platform and their value does not exceed too much than USD 1; if so, the generation of interest stops. On the other hand, in case the value of the Steem Dollars is below 1 USD, and if the amount of the same is small, then the generation of interest of increases.

Steem Power

Steem Power is the way in which the Steemit platform offers its users the possibility of voting and commenting on the existing publications and, in this process, they manage to improve their “reputation” or influence within it.

When a user logs in to the Steemit community, it provides him with a quantity of Steem Power so that he can start interacting with the content. This is spent as comments are made and voted on, but as we said earlier, it is possible to obtain by changing Steem to Steem Power. The process is called Powering Up.

That said, it should be mentioned that as a user has more Steem Power, more influence will have on the publications they vote for. In fact, if a content is well voted by someone with a high Steem Power, it will be rewarded with Steem, Steem Dollar or Steem Power cryptocurrencies.

With this, we have that Steemit is a merely meritocratic platform, since the vote with the greatest influence is given by those users who have the greatest amount of money. The payment for the creation of content is at the discretion of its owner. This can receive 50% in Steem tokens and 50% in Steem dollars, or if he wishes, get the full payment in Steem Power.

How much can you earn on Steemit?

Despite the fact that a well-known user on Steemit managed to make an amount of $ 100,000 in just one week, this is rather a particular case. The expectation of a new user is very few dollars, and these become constant, it should be around $ 500 a month, gaining followers.

Here it is worth clarifying that despite appearing so practical, Steemit is not among the most recommended websites to make a lot of money in a short time. In fact, let's remember that to publish content, it must be original and meet certain criteria inherent to curators, and if those who vote for it have high Steem Power, then the profits for the creator will be better. However, we must bear in mind that this is not a constant.

Does Steemit have any disadvantages?

So far, Steemit seems like the ideal place to capitalize on our fondness for social media, however, not everything is rosy. There are some not so favorable points that should be mentioned, and we explain them below.

Imbalance in voting power

We already explained that Steem can be exchanged for money or voting power, but the latter can apply as a masked disadvantage. And it is the fact that as a person accumulates more Steem Power, their votes and comments will have a lot of value within the platform compared to other users.

This situation, despite being very beneficial from a certain point, has managed to generate harassment by vote. Furthermore, we do not rule out the possibility that certain users with a high voting power may harm the publications of others and prevent their promotion on the network, even when they meet the quality requirements.

High risk of hacking

Although practically everything exposed so far seems to be in favor of this social network, there is an undeniable reality that is the high risk of hacking. This represents one of the greatest fears for those who feel interested in integrating into the community, since cyber attacks that have cost millions of dollars to users have already been raised on several occasions.

In fact, in 2016, Steemit precisely suffered a hack in which 260 accounts were affected and around $ 80,000 were stolen. And although the network momentarily shut down and took responsibility for the damage, reimbursing the money to each of its affected users, this risk remains a latent concern.

High risk of account loss when losing password

Another disadvantage that we can mention is related precisely to an intrinsic security measure of the platform. And it is that Steemit does not have the option of recovering a password if it is forgotten or lost. So, if we have not complied with the important provision to write it down or keep it in a safe place, we can give up all our money and influence on the network.

Inflation

A very important point that we should not overlook is the fact of inflation. Unlike other cryptocurrencies, Steem does not have a finite number of units, but more of them are continuously being generated, which are distributed among the members of the network.

With this, we know that there could be for everyone, however, we have an imminent risk of inflation, which could confer an absurdity for experts on the subject. For this reason, many recommend switching from Steem to Steem Dollar which, as we have already said, generates an annual interest percentage that can be useful.
We have then that Steemit is an innovative social network that seeks to take advantage of the benefits of Blockchain technology to reward its users for contributions of quality content. In this way, the continuity of its members and the frequent updating of the blockchain are guaranteed.

For those who like the new, who are exhausted from the routine of Twitter, Instagram or Facebook, Steemit is an excellent alternative to obtain writings and other content of guaranteed quality. With this they manage not only to clarify doubts or satisfy their leisure, but also to make profits and learn about the interesting world of cryptocurrencies.

Thanks for read, i hope you understand everything and if you have any question you can leave it in the comments.