How Do Upvotes Work? When I Upvote Someone Does It Give Them My STEEM?

jeffbernst (62) in steem • 7 years ago (edited)

This is another topic that is really confusing at first, but it’s not too bad once you take a closer look. Let’s dive right in. 🙂

Where’s The Money Come From?

This might sound weird at first, but when you upvote someone on Steemit, DTube, or any other Steem app, you’re not giving them any of your STEEM. Everything in your wallet stays in your possession, so where does the STEEM come from?

Every day, new STEEM are created and distributed to three groups: 10% to witnesses, 15% to Steem Power holders, and the rest makes up the rewards pool. This rewards pool is what’s distributed to people who publish content. About 75% of it goes to the author of the post, and the rest goes to curators, which is a topic I’ll cover in a later video.

You’re probably wondering how Steem can just print money every day like this, but this actually reduces the overall value of the currency and can be seen in its rate of inflation. Starting at the end of 2016 it was 9.5%, and it decreases by about 0.5% each year. You can counteract some of this inflation by keeping your STEEM as Steem Power because it receives some of the new STEEM created each day as interest.

What Happens When You Upvote?

When you upvote a post or comment, you’re telling the blockchain to send some fraction of the rewards pool to the author. The more Steem Power you have, the more influence you have, and the more you can route to someone with your vote.

So not too bad right? 🙂 I hope this video was helpful and please let me know in the comments if you have any questions!

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7 years ago by jeffbernst (62)

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reseller (74) · 7 years ago

Congrats, you made the @dtube #steemitminute for today!
Click the Image Below

jeffbernst (62) · 7 years ago

Cool, thanks for the shout out! 😀

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faizarfatria (55) · 7 years ago

It was realy helpful, this is the new model of economic dessentralization,..

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jeffbernst (62) · 7 years ago

Thanks for watching!

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matt.why.not (41) · 7 years ago

That's good to know, but how can I get any audience to first see my video? I am new there so I have 0 experience and 0 audience, so if you have any advices for the beginner on dtube it would be great if you could tell me :D

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jeffbernst (62) · 7 years ago

I'm still new too! But the things that have worked for me so far are to interact with people in the comments, and post content consistently. If you're able to get some upvotes from @dtube, it will move your videos into the Hot/Trending section which will bring a lot more traffic to you. Good luck! 😀

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matt.why.not (41) · 7 years ago

But how to get noticed by @dtube? :D

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jeffbernst (62) · 7 years ago

Haha, yeah that's the big question :P

I can't say for sure, but I've just been trying to create content related to DTube/Steem because I know a lot of people using the platform are interested in it. Good luck though! And let me know if you figure out the secret :D

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matt.why.not (41) · 7 years ago

I just hope that they will see my videos :D I know that a lot of people are doing videos about crypto in dtube so I thought I'll bring something different like more cinematic format, hope someone will appreciate this haha :D

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betterrockets (30) · 7 years ago

No offence but that still explains not where the money comes from. :) Bitcoin gets it's worth from the miners paying for mining rigs and electricity. There is money and work spend and converted into bitcoin. That it is why it is valuable. Just like you need to spend money on machines and personal to dig gold out of the ground. But i still did not got how on earth steemit creates money. For me it seems like crypto money is created out of nothing and people paying each other with it. Can anyone please explain this to me?

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jeffbernst (62) · 7 years ago

Yeah, this is still something I'm trying to learn more about. From my understanding, Bitcoin doesn't only get its value from people spending money on mining rigs, a lot of it is decided in the markets from the balance of supply and demand. Here's one explanation I've seen from this article:

Bitcoin's value depends on "transactional" and "reservation" demand.

It is important to note that the total market value of a currency, its "monetary base", is driven by two things, transactional demand and reservation demand. We can think of Bitcoin's average daily "float" as the analog of our economy's M1 money supply - the currency needed to satisfy transactional demand for goods and services. Similarly, we can think of the Bitcoins which are "hoarded" by speculative investors as the currency needed to satisfy reservation demand for secure long-term savings. Combined, Bitcoin's float and reserves comprise its total monetary base, which is similar to our economy's M2 money supply (M1+money in savings deposits, money markets, etc).

So the monetary base relies on both consumers and investors who believe that the Bitcoin technology will power a certain volume of economic exchange today and in the future. Speculative investors in particular have shown an extraordinary willingness to buy BTC, leading to a much larger monetary base than would otherwise be expected for a currency with bitcoin's transactional volume.

And that's ok! As long as the transactional demand for Bitcoin continues to grow exponentially in the coming years, the balance between Bitcoin's float and its total monetary base will likely reflect that of other global currencies. (To learn how Bitcoin enters into circulation, read, "What is Bitcoin Mining?")

So it's true that with a lot of cryptocurrencies, the price comes mostly from speculation in the market, but over time as the currency is used in exchange for actual goods and services, the price won't be solely based on this speculation. It's similar to something like the US dollar -- nowadays it isn't backed by anything like gold, so it has value because we all agree that it does and willingly use it as a means of exchange.

Hopefully that makes sense, but I'm still trying to learn too!

Thanks for watching! :D

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synick (52) · 7 years ago

Thanks for your post. Really been pondering on how steemit really works.

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jeffbernst (62) · 7 years ago

Thanks for watching!

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synick (52) · 7 years ago

You're welcome

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rayhanu1 (41) · 7 years ago

great blog and thanks for that💜✌

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acousticsteveo (61) · 7 years ago

Thanks for this video. I'm looking forward to more, as I am pretty new to steemit. I started in November, but I haven't really had time to do a lot of research on my own, and videos like this help my learning curve, because I'm able to absorb a lot of information without having to do a ton of research, so thank you.

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jeffbernst (62) · 7 years ago

Awesome, glad I could help! 🙂

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kimuseni (41) · 7 years ago

Thanks for that info. I’m new to STEEM so everything is Greek to me right now

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jeffbernst (62) · 7 years ago

Haha, yeah it's pretty confusing at first 😀

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buzweaveryoutube (59) · 7 years ago

Thanks Jeff. I've been trying to educate myself on Crypto and how Steemit/Dtube works and this was an excellent example of outlining upvotes in a very concise and simple way.

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jeffbernst (62) · 7 years ago

Glad I could help! 😀

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aeternet (26) · 7 years ago

Thanks for this post, i was not sure how upvoting worked. When i just made my account i was even afraid to upvote others, thinking it would cost me money lol ;)

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jeffbernst (62) · 7 years ago

Haha yeah, that's a common misconception, but totally understandable because there's nothing else like this!

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nick.visco (56) · 7 years ago

Great breakdown, I just followed you. But why is it that just a week ago my upvote was worth 0.050 and now its only worth 0.039 even when my voting power is full? Please help!

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jeffbernst (62) · 7 years ago

Thanks for watching!

The price displayed on Steemit/DTube is calculated with the average price of STEEM over the past 3.5 days. So as it moves up or down, the value of your vote, along with the value of all posts that haven't paid out yet, will fluctuate. You can check out the price used for this calculation in the top right corner of steemnow.com.

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liquid0 (30) · 7 years ago

Good information, this was somewhat confusing when I started but after some reading and watching some videos like yours it gets clearer how things work.

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jeffbernst (62) · 7 years ago

Yeah it's not too bad once you hear some explanations. Thanks for watching! 😀

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sorifahmedsijan (32) · 7 years ago

what a blog brother..........i love it

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jeffbernst (62) · 7 years ago

Thanks!

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murizalpangeran (50) · 7 years ago

I just found out through this post.
I do steemit for appreciation only. Hopefully later more focused and serious

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