What is Steem?
Steem (STEEM) is the official cryptocurrency of the social network Steemit which is built on its own blockchain. Users earn STEEM for posting, sharing, curating and commenting on contents. The Steem currency is divided into STEEM and Steem Dollars, both of which are tradeable on a number of online exchanges. As a social network, Steem is quite popular, frequently compared to the likes of Reddit and Medium, but differs in that it rewards content creators with its own cryptocurrency.
History of Steem
The idea of Steem was discussed in a whitepaper published in March 2016. Later in the year, Ned Scott and Dan Larimer (creator of BitShares) founded a company based on the whitepaper. They also arranged for the funds to continue development of the platform.
Steem began with a high inflationary supply model of 100% growth every year. However, in December 2016, inflation was brought down to 9.5% per annum. In July 2016, Steem market capitalization reached $405 million, surpassing the $1 billion mark in January 2018. In March 2017. Dan Larimer resigned from the company to pursue other projects.
How Steem Works
Steem has two different cryptocurrencies, both of which are measured against STEEM, the base token for the network. STEEM Power is the STEEM which has been put into a Smart Contract mode and it helps users to gain more influence on the network. Steem Dollars are STEEM tokens which are more like an actual cryptocurrency and can be converted to fiat currencies or used for payments and transactions.
Exactly 50% of whatever a user earns is given in the form of STEEM, and the remaining 50% is issued as Steem Dollars.
The network also has an internal conversion exchange where STEEM can be used to purchase Steem Dollars and vice versa. The process takes 3.5 days, approximately.
Steem offers 75% of the reward to content authors and 25% of the reward to content curators. Steem also offers a wallet where the users can store their Steem Dollars or use for transactional purposes.
With the first social network built around a cryptocurrency, Steem aims to be a disruptive service in the social media industry and offers multiple advantages:
- Virtually Free: There is no need to buy or invest in Steem as StEEM can be earned for publishing, curating or sharing contents on its network, and even for commenting on published materials. Thus, this cryptocurrency can basically be earned for free.
- Blockchain based: The service utilizes its own blockchain, which is the backbone of almost every cryptocurrency. This brings solidity and security to its monetary reward system.
- Tradeable: Many leading exchanges offer the trade of Steem Dollars and one can use Steem Dollars to purchase bitcoin, Ethereum or any other cryptocurrency.
- Unlimited Potential: Steem is a highly-scalable social network, by definition, and thus, there is no limit as to where this network can reach. Facebook for example, is used by over a billion people, worldwide. Greater users brings an increasing price of STEEM and thus greater revenue for its contributors.