Steemit is an innovative blockchain-based social media platform. It’s a decentralized application (dApp) built on the Steem blockchain, and it uses the native crypto STEEM to reward users for content creation and curation.
There are pros and cons to combining social media and cryptocurrency. Keep reading to learn more.
How Does Steemit (STEEM) Work?
Steem is a social blockchain that incorporates a rewards system to incentivize users for creating and engaging with content on the platform. As users create content, more users might be attracted to the platform while existing users remain engaged. This results in more STEEM crypto being distributed.
Users who upvote posts on Steemit assist in the distribution of coins to those who are providing value to the network. Steemit attempts to reward both voting and posting according to their worth, although the weighting mechanism used to value people’s votes has been scrutinized.
There are over 300 dApps built on the Steem blockchain. To answer the question, “What is Steem,” let’s look at some of the most popular apps built on the blockchain. These include Steemit, DTube, and Utopian.
Steemit is the flagship app of the Steem blockchain. Steemit launched on July 4th, 2016, and was the first functioning app on Steem. Steemit provides users an automated feed of content based on their preferences. Users have a chance to earn cryptocurrency as rewards for creating and curating content.
Unlike many other crypto projects, Steemit isn’t really part of the DeFi landscape. It’s more of a social play.
DTube is a decentralized platform made for those who want to create videos. Unlike most other platforms, Dtube has no ads, is censorship resistant, rewards users, and provides a fair platform for creators.
Utopian.io is an open-source project being developed on the Steem blockchain. Like Steemit, the platform rewards its users. However, Utopian is not a social network that allows for posting content. Utopian’s rewards are tied to coding contributions that users make, like adding new features, fixing bugs, etc.
Smart Media Tokens (SMTs)
According to Steem.com, “a Smart Media Token (SMT) is a native digital asset on the Steem blockchain.” These tokens can be launched by anyone who wants to monetize their online content and “create incentives to encourage desired user behavior.”
These tokens are similar to ERC-20 tokens hosted on Ethereum. The difference is that SMTs contain “Proof-of-Brain” properties combined with a token distribution system designed for digital content enterprises.
Proof-of-Brain is a token rewards algorithm that encourages the creation and curation of content. It lets tokens get distributed via actions like “upvoting” and “liking.” These can be integrated into a website to allow developers to create the monetary incentives they would like their users to have.
Basically, SMTs provide a way for anyone to integrate a Steemit-like rewards system into their own platform.
What Is STEEM Coin?
Every form of cryptocurrency operates in a different way. To earn money on Steem, you have to create posts other users will like and then upvote them. A user base that likes your posts will generate a percentage of revenue for you in the long run. The amount of money a user can earn depends on their voting power. Voting power can be earned at the time of creating a post/article or any piece of content.
Understanding Steem Crypto
The Steem network has two different tokens:
• Steem (STEEM)
• STEEM Dollars (SBD)
Users can be rewarded in both tokens. The default setting is to receive 50% of rewards in SBD and 50% in STEEM, although users can alter this ratio as they see fit.
STEEM crypto can be “powered up” into STEEM Power, while STEEM Power can be “powered down” back into STEEM tokens. STEEM Power gives users more sway over the voting mechanism that powers Steemit and increases their potential rewards.
While SBD and STEEM coin are cryptocurrencies that can be traded off-platform, STEEM Power only exists on Steemit.
STEEM Dollars (SBD) are used to reward those who post, comment, and upvote posts on Steemit. Users can also receive rewards in STEEM tokens. Those who want to quickly “power up” to STEEM Power might opt for more STEEM rewards, while those looking to cash out their rewards might want more STEEM Dollars. SBD can be converted into STEEM, but the process takes about three days.
STEEM Power influences the weight a user’s votes have on the network. Those with more STEEM Power have more influential votes, meaning that when they upvote something, that user receives a greater reward. It also pushes those posts higher towards the top of the feed for whatever categories the post was listed in. In this way, it’s thought that the posts judged to be most valuable by the community will become the most popular and well-rewarded.
Advantages and Disadvantages of Steemit (STEEM)
While the social media concept underlying Steem is intriguing, it’s also important to weigh the project’s pros and cons.
Steemit has a few advantages over other social media networks, including how it can cope with censorship, reward users, and reach audiences beyond the world of crypto.
Because Steemit is based on an immutable blockchain, it’s much harder for any central authority to censor people’s content. Users who find themselves banned or shadow banned on other social networks without knowing why might find this appealing.
As mentioned, users can be rewarded for participating in the Steemit economy. Creating posts, commenting, and upvoting posts all give users small amounts of STEEM Dollars, which can then be exchanged for other currencies like Bitcoin.
Obviously, most (if not all) Steemit users have some familiarity with crypto. At the same time, the content that people create on Steemit is broad and varied. There are popular posts about things like current events, art, poetry, photography, cooking, finance, memes, and more – setting the stage for a wider audience.
There are also some disadvantages to Steemit. Some of these include how its reward system works, and the fact that Steemit was taken over by an outsider in the year 2020.
Some have criticized Steemit based on how its reward system works. Because those with the most STEEM Power have the most sway over which posts become popular, these STEEM “whales” — crypto slang for users with large crypto holdings — can have a disproportionate influence on the popularity of the network’s content (and resulting user payouts).
Meanwhile, those who are new may have to spend a lot of time on the platform before having any significant influence or earning any real rewards, unless they happen to be friends with a whale, who can quickly boost their content.
In 2020, Steemit was taken over by Justin Sun, the creator of Tron (TRX). Sun was able to acquire a large quantity of STEEM tokens, which he was then able to use to take control of the network because of its delegated proof-of-stake (DPoS) consensus mechanism. This allowed him to put his own witnesses (users who vote on changes to the network) into positions of power.
Some Steemit users who didn’t agree with this takeover created a hard fork of the Steemit network called Hive (HIVE).
• Content is censorship resistant thanks to immutable blockchain technology.
• STEEM Power whales can have disproportionate power over content.
• The prevalence of rewards incentivizes users on many fronts.
• The 2020 takeover by Justin Sun was destabilizing.
• Range of content provides an opportunity for a wider audience.
• Newcomers may find it difficult to gain followers and reap rewards.
Who Created Steemit (STEEM)?
Steem was created by Ned Scott and Dan Larimer. Larimer is a software engineer who has created many blockchain projects in the past, including Bitshares, which was the first decentralized exchange. He stepped down from his role as CTO in 2017 and left the company.
Why Does Steemit (STEEM) Have Value?
Steem has fast transaction rates (every 3 seconds) and thanks to its smart bandwidth technology, users can enjoy free transactions.
Also, Steem’s blockchain is designed to support large-scale social applications. STEEM has value based on the advantages it provides as a social network. In a time of growing censorship in some quarters, many people find themselves seeking alternative platforms to express themselves and engage with others.
The more people who use Steemit and related apps, the greater value STEEM Dollars could theoretically have. Then again, as more people earn STEEM Dollars, more people could sell those tokens, leading to a decline in price.
Price of Steemit (STEEM)
The current price of STEEM is $0.35 with a 24-hour trading volume of $9.7 million, as of March 30, 2022. The total market cap of STEEM is $140.25 million. The all-time high of $8.57 was reached in January 2018. The all-time low of $0.06 was reached in March 2017.
Why Use Steemit (STEEM)?
People might want to use STEEM after they’ve earned it on platforms like Steemit or Dtube. STEEM can be sent to an exchange and traded for Bitcoin, which can then be converted to fiat currency.
How Can I Buy STEEM?
You may have to do a little research to find platforms that enable STEEM trades — it’s harder to find than some others. Also, be sure to review how crypto exchanges work, as well as any fees that may apply.
Step 1. Choose an exchange and set up an account.
Once you find an exchange that supports STEEM crypto, set up and fund your account with a secure wire transfer from your bank, or even with a credit or debit card transfer (but check with your bank in the case of restrictions). Fees may apply.
Step 2. Set up a wallet to store your assets.
Just as you might keep money in a physical wallet, cryptocurrencies are held in digital “wallets.” Be sure to select a crypto wallet that supports STEEM.
Note that some crypto exchange accounts come with a custodial wallet, and there may be restrictions about moving your crypto off-platform.
Step 3. Trade STEEM.
Once you’ve executed the trade, you can transfer your STEEM crypto holdings to your wallet. You may want to leave your holdings there if you plan to keep trading.
Sharing Personal Data
Depending on where you trade, some platforms may require different forms of identification. Some exchanges adhere to Know Your Customer (KYC) rules, a common set of standards that require investors to disclose certain information. Others may allow anonymous or P2P transactions.
Similar to trading securities, there are fees to consider when trading crypto. Be sure to understand the associated costs that may come with trading crypto on one platform versus another, or using one form of payment versus another.
How to Sell STEEM
Once you’ve decided to sell your STEEM crypto, the next step is deciding whether you plan to cash out for a fiat currency like U.S. dollars (USD) or trade another type of crypto.
Step 1. Decide what to sell.
If you’re exchanging STEEM for USD, the steps may be different than if you’re buying another form of crypto — or you may have to complete a more extensive KYC identification.
Step 2. Find the best price.
Crypto prices fluctuate by the minute, so do your research beforehand so you know a good offer when you see one.
Step 3. Sell STEEM.
Complete the trade and move your crypto (or cash) to your wallet, unless you plan to keep trading on the exchange.
Step 4. Consider taxes.
Remember that crypto gains are subject to taxes. Be sure to consider the tax implications of selling STEEM crypto, and consult a professional as needed.
Does Steemit (STEEM) Have Staking?
In an unusual twist, STEEM doesn’t have staking even though the network relies on a delegated proof-of-stake protocol (DPoS). That may be due to its unique token distribution and rewards system, and the fact that there aren’t traditional validators, as in other PoS networks.
Steem is a blockchain that allows for the development and use of rewards-driven social apps of all kinds.
Similar to traditional social media platforms, Steem is designed to be self-sustaining through user incentives. So as users create content, more users might be attracted to the platform which could result in more STEEM crypto being distributed, and more users becoming engaged.
Users can earn crypto by posting, commenting, and curating content, and even use Smart Media Tokens to create their own applications that can function in a similar way. That said, the weighting mechanism used to value people’s votes has been criticized for allowing certain content creators to dominate and get more rewards.
In addition, there are hundreds of dApps built on the Steem blockchain, a fact that may end up drawing in a wider audience and popularizing this form of crypto.