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That is very simple. When you power up, the Steem is sent instantly to a smart contract and held there, and then you can use for curation ,etc. When you power down, then it is withdraw from there over the course of 4 months.

One more question, if you don't mind. When I upvote, a box pops up that asks for a percentage...what's the distribution, or how & what's distributed (I hope that makes sense, you can see how old and dumb I am)?

That is where you choose how much vote power you allocate per upvote.

If you want to maximize your curation profits then always chose 100%, until your voting power stays above 0. Make sure you not run out of VP, but I think it should be plenty there if you vote manually.

Check here:
https://steemdb.com/@richq11

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