Understanding Steemit For Beginners (Economic Fundamentals)

Understanding Steemit For Beginners (Economic Fundamentals)

Wew .... not easy to understand the overall concept of Steemit because its economic fundamentals quite different from other cryptocurrency. Reading the document whitepaper Steemit yg thick 44 pages also quite dizzying head especially if not impatient. The purpose of writing this article to share an understanding of Steemit so far. It should be understood that sy is also just beginning to learn it and not a Steemit expert, if there is one please understand and more happy if you want to help correct it by commenting below this article.

Steem & Steem Power & Steem Dollar

To understand the fundamental concepts of the Steemit economy, we must understand the functions of these three values. First ... Steem is a unit value that we can buy directly on the Bittrex platform exchanger, and note that it does not work like a BitCoin where it is stored as a value asset because every year Steem's total supply increases 2x.

How is Suppy Steem created? The answer is from Proof of Work when solving a block. Steem can be mined through Windows and mining power is determined based on your Processor, not GPU like Ethereum. So ... Steemit Network starts from 0 supply and based on what's written on its whitepaper: there are about 800 new steems created every minute.

Second ... Steem Power is the value of a convertible unit of Steem. For you to re-convert from Steem Power to Steem takes 2 years, gradually as much as 104x payment. Why 104x payment because steem power you convert to steem will be paid every week .. Due to 1 year there are 52minggu then 2 years equal to 104minggu. This process is called "Power Down"

The advantage of having Steem Power is that we get Steem every time New Steem is created (still remember the above mentioned point that steam supply will continue to increase every minute?) In other words ... by steem conversion to SteemPower ... we are guaranteed to get Steem quantity (In the form of Steem Power) which is more over time running rather than storing Steem ente.