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About Steem

The Steem blockchain represents a transformative approach to social media, underpinned by a delegated proof-of-stake mechanism. It’s an open infrastructure that’s specifically tailored for social applications. What sets Steem apart is its reward system, which uses the STEEM cryptocurrency to compensate users for their content creation and curation efforts. This model fosters a vibrant community where contributors receive direct value for their engagement, as opposed to the conventional social media platforms where user data is often monetized without rewarding the content creators. At the heart of this ecosystem is Steemit, a widely recognized user interface that leverages Steem’s blockchain technology.

History of Steem

The origins of the Steem blockchain, launched on March 24, 2016, remain somewhat enigmatic, with little detail available about its initial development or the identity of its first miner. Stemming from a concept similar to one speculated by Reddit in 2014, Steem was designed to enhance social media by rewarding user engagement with cryptocurrency, effectively monetizing contributions such as posting, commenting, and voting. Daniel Larimer, a founder of Steem and known for his development work on BitShares and EOS, played a key role in its early development, despite some criticisms regarding transparency. While Steem’s roadmap is not officially outlined, upcoming features include a Decentralized Exchange, Escrow Payments, a Hierarchical Private Key Structure, Multi-Signature Authorities, and Smart Media Tokens (SMT).

Steemit Explained

Steemit represents the flagship application of the Steem blockchain ecosystem. Envisioned as a digital convergence zone, it operates as a blogging-centric platform, enabling content creators to reap financial rewards through a community-driven upvoting mechanism, thereby enhancing their visibility and status within the network. Often, the lines blur between Steemit and its foundational blockchain, Steem, due to the former’s pioneering status and widespread recognition.

Historically, Steemit emerged as a frontrunner in the SocialFi domain, commanding substantial attention and user engagement. However, the narrative has shifted in recent times, with its prominence experiencing a slight ebb. This shift is attributed to the influx of innovative decentralized social networks, such as friend.tech, New Bitcoin City, and Stars Arena, which have intensified the competitive landscape of SocialFi.

Despite these challenges, Steemit continues to maintain a significant footprint in the blockchain-based social media realm, with particularly strong engagement metrics in regions like South Korea, underscoring its enduring relevance and appeal in the ever-evolving digital social ecosystem.

How Does It Work?

The Steem blockchain operates on a refined proof of stake (PoS) mechanism known as delegated proof of stake (DPoS). In this model, participants contribute funds as a stake and delegate the responsibility of block validation to a selected cohort of nodes. The rewards from this validation process feed into the Steem rewards pool, a cornerstone in the blockchain’s operational framework.

Steem’s Reward Distribution Model

At the heart of Steem’s ecosystem lies its rewards pool, designed to incentivize social media engagement. Interestingly, only a fraction (10%) of the staking rewards from this pool goes to block validators, known as Witnesses in the Steem universe. This is in stark contrast to the norm observed in many other blockchains where validators are the primary beneficiaries of staking rewards.

A substantial portion (65%) of the staking rewards is earmarked for active social media participants on Steem. This is divided equally between Authors, who create and share content on Steem-powered applications, and Curators, who endorse content through upvotes.

Additionally, 15% of the rewards are allocated to SP token holders, enhancing their voting strength on the platform. The remaining 10% supports the Steem Proposals System, facilitating governance and decision-making processes within the Steem Decentralized Autonomous Organization (DAO).

Introduction to Smart Media Tokens (SMTs)

Steem is poised to introduce Smart Media Tokens (SMTs), enabling developers and content creators to launch bespoke tokens for their applications or communities. While Steem’s primary currency is STEEM, the introduction of SMTs will offer a tailored economic model for various applications, akin to how Ethereum supports both Ether (ETH) and ERC-20 tokens for specific DApps.

STEEM tokens underpin the broader network activities, whereas SMTs are designed to serve as specialized currencies within individual applications, mirroring the relationship between ETH and ERC-20 tokens on the Ethereum network.

Currently, SMTs are conceptual and await implementation, signifying a forthcoming evolution in Steem’s blockchain ecosystem.

Steem DApps

In the Steem ecosystem, diverse decentralized applications (DApps) thrive, offering unique functionalities:

eSteem: Initiated in 2016, eSteem, previously known as Steem Mobile, is a mobile application that enables users to publish and monetize content through Steem’s upvoting system, focusing on mobile use.
DTube: This is the Steem network’s answer to video sharing, allowing users to upload videos and earn cryptocurrency through upvotes. Unlike YouTube, DTube is built on blockchain technology, emphasizing user-controlled censorship and operating without advertisements, reflecting its non-corporate ownership.
Utopian.io: Targeted at software developers, Utopian.io rewards contributions to open-source projects with cryptocurrency, acting as the Steem equivalent for the open-source community, where improvements and development are incentivized.
Steem Monsters: A trading card and role-playing game under development, Steem Monsters integrates Non-Fungible Tokens (NFTs), marking it as a unique venture into NFT-based gaming within the Steem DApps landscape.

Steem Cryptocurrencies

The Steem blockchain operates with three distinct cryptocurrencies: STEEM, Steem Power (SP), and Steem Dollar (SBD).

STEEM serves as the primary currency, facilitating content monetization and trading on exchanges. Users earn STEEM by publishing and upvoting content. It also plays a crucial role in staking, necessary for block validation and earning staking rewards.
Steem Power (SP) boosts voting influence on the platform, directly affecting content visibility and rewards distribution. While not directly tradable, SP can be converted to STEEM, enhancing its utility for those actively engaged in the community. SP holders gain a portion of the annual STEEM rewards, incentivizing the acquisition and holding of SP.
Steem Dollar (SBD), a stablecoin tied to the U.S. dollar, offers a stable value proposition within the Steem ecosystem. Its value is algorithmically managed to maintain the dollar peg, providing a predictable and steady asset for users.

The reward system on Steem distributes earnings in SP and SBD, with options for users to receive these in different allocations, reflecting the platform’s flexible approach to user engagement and investment. All three cryptocurrencies—STEEM, SP, and SBD—interact within Steem’s internal market, allowing users to convert between them based on their preferences and needs.

Is STEEM a Good Investment?

Investing in STEEM carries a mostly positive outlook, though it faces industry challenges. Its unique selling point is the democratization of earning potential; unlike traditional social media where mainly influencers and brands profit, Steem allows all users to monetize their activities. This inclusivity could attract a wider audience to the platform.

Additionally, the introduction of Smart Media Tokens (SMTs) promises to enhance the Steem ecosystem, offering users and influencers the ability to earn in personalized tokens, which can increase engagement and brand value.

However, Steem must navigate the competitive landscape of social media, contending with giants like Facebook, Instagram, YouTube, X, and Reddit. The platform’s success hinges on its ability to stand out and remain attractive to users in this crowded market.

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FAQ

Steem was co-founded by Ned Scott and Dan Larimer in 2016. Larimer is known for his role in the development of blockchain technologies, including EOS, and has been a significant figure in the cryptocurrency world. Their collaboration led to the creation of Steem as a novel way of integrating social media with blockchain technology.

To acquire STEEM tokens, one can use centralized exchanges such as Binance, which is the most popular platform for trading STEEM.

Presently, the Steem ecosystem offers a singular wallet solution tailored for its currency, embedded within its native blockchain application, Steemit. To engage with this platform, individuals must embark on a registration process, culminating in the creation of a wallet. This procedure, characterized by a verification timeline, may extend to approximately two weeks, concluding with the receipt of a confirmation email.

What makes Steem different from other cryptocurrencies and blockchain platforms is its focus on content creation and curation as the primary method for earning cryptocurrency, as well as its unique three-pronged currency system (STEEM, Steem Power, and Steem Dollars) designed to promote long-term growth and stability within the platform.