What is Steem for Dummies | Steem Review

What is Steem?

Steem is a blockchain which enables users to reward content creators for quality content posted on the Steem social media site. It has tokens and can be traded on exchanges, but rather than being mined, it is given out according to activity on this website. The whole project can be thought of as a blockchain-based version of Reddit, only with cryptocurrency instead of “karma.”

It has attracted a lot of attention, both as a unique cryptocurrency application and as a possible way to overcome the stalled revenue streams that many publications have run into with the rise of online media. So far, the platform has mostly attracted cryptocurrency enthusiasts, but niches with other original and curated content along the lines of Medium.com and Reddit are popping up.

How does Steem work?

In short, Steem is just a blockchain with tokens that you can get as a reward for making things that other people like. Conceptually, it is very similar to Bitcoin—except the mining work is done both by “witnesses,” who are individuals elected by the community to run the nodes that keep the blockchain going, and by content creators, who receive most of the new currency that is created daily by the blockchain.

There are three main currencies on Steemit: STEEM, Steem Power (SP), and Steem-backed Dollars (SBD). The first one behaves like most other cryptocurrencies—it’s a token that you can trade for the other two on Steemit or for other currencies on external exchanges. If you want, you can convert these into SP, which gives you partial ownership over the network and gives your account higher weight if you vote something up or down on the site. Either of these first two can also be converted into SBD, which is essentially the number of STEEM tokens that equal one U.S dollar at current exchange rates.

For example: a content creator writes an article on Steemit. People like it and upvote the article, which makes the creator eligible to receive a reward next time some new coins are created. After some time, 50% SP and 50% SBD are deposited into his account. The author then goes and reads some other peoples’ work, giving out upvotes to some newly published pieces. Those pieces then become very popular, and since the author has some SP, he gets a reward for “discovering” things that people liked. The creator then decides to cash out his SBD, so he exchanges it for enough STEEM to equal one U.S dollar and sells those coins on an exchange.

Recent developments

In February 2018, Binance, one of the biggest exchanges in the world, listed the token.

In September 2017, Steem announced that they would be making their core technology available for widespread use by releasing a technology called the “smart media token.” It will be based on Steemit’s technology, but with customization options, and is targeted at publishers trying to solve the online content monetization problem. The release date is not specified.

How to buy Steem

Steem is mostly bought and sold on Binance. Here is a quick guide on how to buy Steem starting with fiat to avoid hefty fees:

1. Buy Bitcoin or Ethereum at an exchange that uses your fiat currency on Coinbase.
2. Transfer your BTC or ETH to an exchange that supports Steem. Currently, Binance is the best choice. (Tip: if you bought BTC/ETH on Coinbase, look into using GDAX to avoid transfer fees)
3. Buy Steem by trading your BTC/ETH for their coin, and you’re done!

Fun fact

“Steem” is an obsolete word meaning “a gleam of light” or “a flame.”

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