What is Steemit?

Steemit is a blogging and social networking website on top of the Steem blockchain database. The Steem blockchain produces Steem and Steem Dollars which are tradeable tokens users obtain for posting, discovering, and commenting on interesting content.
Steemit, Inc is a privately held company based in New York City and headquartered in Virginia. The company was founded by Ned Scott and Dan Larimer, creator of BitShares, and EOS.

Concept

The Steemit concept was described in the companies white paper, released in March 2016. The general concept is similar to other blogging websites or social news websites like Reddit, but the text content is saved in a blockchain. Using a blockchain enables rewarding comments and posts with secure tokens of value.

Images can be uploaded and hosted on Steemit. Other multimedia content must be embedded from other web hosts. For formatting, there is a WYSIWYG editor. Users can also opt to use Markdown formatting with HTML elements.

User accounts can upvote posts and comments, and the authors who get upvoted can receive a monetary reward in a cryptocurrency token named Steem and US dollar-pegged tokens called Steem Dollars. People are also rewarded for curating (discovering) popular content. Curating involves voting comments and post submissions. Vote strength and curation rewards are influenced by the amount of Steem Power held by the voter.

Steemit has a reputation system, where new accounts start with a reputation of 25. An account's received votes can influence its reputation up and down, incentivizing online etiquette and interaction with the community.
Monetary system

The Steem blockchain has two tokens: Steem and Steem Dollars. There is also a vested or stored interest known as Steem Power. Steem Power is strictly for internal use in the Steem community, while the tokens are used for stored value and trading.

Steem is based on the Smart Media Tokens (SMT) protocol, developed by Steemit. As of December 2017, CoinMarketCap.com listed Steem with a $475 million market capitalization, and ranked Steem tokens 32nd of 1,358 cryptocurrencies. User actions, such as upvoting facilitates Steem's Proof-of-Brain algorithm, which also factors in the Steem Power a user holds, to provide incentives for content creators and the community by transferring small amounts of the Steem token currency.

Steem began with a highly inflationary supply model, doubling roughly every year.However, due to community demand, on December 6, 2016 the inflation rate of Steem was changed to 9.5% per year, reducing by 0.5% per year.
Usage and media coverage

As of Nov 2017, there are more than 450,000 Steem accounts. After an initial public beta for which no payments were made, the hard fork on July 4th, 2016, saw $1,300,000 of Steem and Steem Dollars paid out to Steemit users. According to company reports, since October 2017, $30 million were paid out to over 50.000 users.

The exchange rate of Steem compared to Bitcoin rose continuously during July 2016, peaking at a price of over 4 US dollars. 20th of July 2016, Steem had a first notable peak of market capitalization with about 405 million US dollars. As of December 16th, 2017, its market cap is 525 million US dollars.

Steemit was described as a novel and "disruptive blockchain-based media community" by Adam Hayes (Investopedia) in July 2016 It got media coverage in cryptocurrency- and business-related media. Author Neil Strauss, a Steemit member, wrote an article for Rolling Stone calling its reward distribution "particularly clever" and echoing the sentiment of its disruptive potential.

Andrew McMillen explained in Wired Steemit's function being rooted in transparency with every vote and transfer being viewable to the public from upvotes on posts to wallet transfers. Unlike most digital currencies which are difficult to access for the majority of the world without any money to invest, Steem removes the friction for the average person to join in the cryptocurrency world by allowing earnings via posting without needing to buy in first.

Criticism

Joe Lee, co-founder and CIO of digital currency trading platform Magnr, told CoinDesk. "Whether Steem succeeds as a digital currency will be more a reflection of Steemit’s success as a platform as opposed to the economics of the coin itself. This is a good example of a digital currency whose value will be closely affiliated to its utilitarian value as a social networking and sharing platform.

“I’m skeptical about 'appcoins'/'appchains,' and Steem is very much one,” stated algorithmic trader Jacob Eliosoff.

DecentralizeToday had an article published giving an overview of the platform and blockchain pointing out how the developers consciously relaunched the currency to assure centralization, even quoting Tone Vays calling the system a Ponzi Scheme.

Source: https://en.wikipedia.org/wiki/Steemit