FAQ: Steem, Steem Dollars, Steem Power, Inflation, interest rate and total supply

1. What's Steem ?
It's the actual cryptocurrency, the token, the digital money. It's traded on exchange, such as binance and others. You can sell it on exchanges to get dollars or other currencies, or send it to your friends (unlike other cryptocurrencies, no transaction fee here).

2. What's Steem Dollars ?
It's similar to a convertible note (here you can convert it back to steem), designed to provide stability to the steem ecosystem by implementing rules so that its price will fluctuate around 1 USD, or 1 USD worth Steem.

3. You're lying when I check the price of Steem Dollars, it's not 1$, it's 2.8$, even higher than Steem itself!
Yes, you're right if you sell it on exchange, its price is about 2.8$ today. But if you exchange it on steemit, they will only give one dollar. So you know what to do. Why this is happening ? I don't know, my guess is for what ever reason, at the moment there's a huge demands for Steem Dollar (SBD). This is also why its interest rate is 0 at the moment (a rule in white paper).

4. WTF is SBD?
Steem Dollars' full name is: Steem Blockchain Dollars ...

5. Who determine the SBD interest rate ?
The witnesses, the rules in white paper and the detail implementation of the blockchain. It's currently 0 since it's traded above 1 dollar.

6. And what's Steem Power (SP) ?
It's like a long term deposit, a saving account. You can deposit your steem, aka power up any time you want, but to withdraw (convert it back to steem, aka power down) you will receive equal amount of steem in next 13 weeks. It's the A share of the steem community.

7. Is the total Steem supply capped ?
Nope. There's some (or huge depends how you look at it) inflation every year. According to white paper: "Starting with the network's 16th hard fork in December 2016, Steem began creating new tokens at a yearly inflation rate of 9.5%. The inflation rate decreases at a rate of 0.01% every 250,000 blocks, or about 0.5% per year. The inflation will continue decreasing at this pace until the overall inflation rate reaches 0.95%. This will take about 20.5 years from the time hard fork 16 went into effect."

8. Wait! I heard the inflation rate of steem is 100% per year, not 9.5% !
Yes and no. The number of 9.5% in white paper only represents an inflation rate of the Steem (aka the "new tokens"), not including the SP, which is exactly 9 times the new Steem. Let me put it this way, the blockchain will generate 9 SP (which will be distributed to all SP holders proportionally to their holdings) for every new Steem it generates. Also, for the new Steem it generates, 15% will be paid to SP holder as interests. Thus, in December 2016, the inflation is about: 9.5% + 9*9.5% = 95%.

9. So what's the interest rate paid to SP ?
It's a dynamically adjusted value. Interest rate and inflation rate is just an reflection of yearly blockchain growth and distribution. There's no fixed number defined in white paper. The creation of new Steem and SP are based on the increasing rate of the block in blockchain. Mostly it's several Steems (and 9 times SP) per block. Thus your interest rate in a fixed period depends on how many new Steem (SP) are generated (from curation, posting, ...), and how may SP outstanding. This is why if you search you will see all kinds of numbers, from 100% to 200%. If more people holding SP, the rate will drop. Here's a calculator, not sure ii it's still working.

10. Is this a Ponzi Scheme ?
People have the same questions for Bitcoin, Gold and stock market. At least we're creating something useful here and you don't need to invest your money to get involved. If it's a Ponzi Scheme, it's a better one.

11. Will upvote others cost me money ?
Nope. Upvoting won't cost you any money. But your voting power (how much money you can "give" to the post you voted) is fixed and proportional to your own SP amount. To prevent vote abuse, your voting powder will decreased every time you vote and will be recharged 20% per day. So vote responsibly.

Disclaimer:
I'm so confused by these questions when I first met Steem. I'm getting even more confused when I try to search the answers. Partially because many posts are based on the older white paper before August 2017 ? So I have to read the 32 pages white paper. This is mainly for myself but I hope this is could save you some time too. Please let me know if you find any error.