Could someone explain Steem to me like I am a three year old?

in steemit •  8 years ago 

I'm creative in nature so business, investments, this sort of thing go over my head. Maybe someone can advise me and others reading on what I should do? And Why?

Currently I have the following

STEEM 28.086
STEEM POWER 85.149
STEEM DOLLARS 17.291
SAVINGS 0.000 STEEM
Estimated Account Value 55.56

I haven't done anything other than to post content, mostly my own videos that I have created. I've been given enormous support and I think it's great but the way I understand it at the moment, my "STEEM" is what I use to up - vote other worthy news, posts or comments, right? And each up-vote = $0.01 STEEM?

If it's better for me to not understand and just take the ride I AM OKAY WITH THAT TOO!
I'm here for the transparency of sharing information, the freedom from censorship and the like-minded people. So if this question has been asked a thousand times I understand your annoyance with me but currently I don't really have a lot of free time to search so even a link would be amazing herein now that you know my search.

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You don't lose anything by voting or commenting. In fact, you earn a little steem power by doing these things. Steem power detetmines how influential your votes are. The steem & steem dollars in your account are liquid funds that you can use like money. They can be traded for national currencies like dollars or euros.

What's in your account is what you've earned by creating value for steemit.

Okay, that's interesting. So, by up-voting I wasn't giving people money when I did that?

So for example, should I seek to have more influence? Obviously I have no intention to cash out in any fiat currency, I want to let it ride.

Do I want to build up my steem power? How would I do that with the numbers above in my wallet for my best possible influence and participation?

Upvotes direct money from the reward pool toward posts. Essentially, the people that are producing steem coins (miners) divide them up between content creation pools and curation reward pools. When you upvote content, you're signalling to the system that it should direct some of that creation reward pool to that post. The same goes for curation. You don't actually pay out anything from what you have toward your upvotes; it's paid via the reward pools.

Steem power and influence are the same thing here. You can 'power up' your steem directly into steem power (which is instant), and convert your steem dollars into steem to use for powering up (once you click 'convert', it takes a week before the conversion is complete). Note that this will make these (re-invested) funds unavailable for withdraw.

And then what's the long term benefit in this?

It increases your reputation on Steemit, which makes your votes more powerful (including votes for yourself every time you post - so it makes your posts more visible and likely to earn more money).

Steem power is also a long term investment that is kind of like an equity position. It accrues interest rapidly (this is offset by value dilution due to the steem equivalent of inflation). It can't be taken out at a faster rate than 1% over the course of two years, so it really is a long term investment. If Steemit and the Steem token are successful, Steem Power may be worth quite a bit of money in the future. If they are unsuccessful, it will not be worth so much.

It's a social network, where you share content and interact with people. Just like Facebook or Twitter. The differences are:

  • this is decentralized - it's not owned by a single entity, although it was created by a legit business
  • for every interaction you get a reward, in the form of a cryptocurrency
  • there are 3 types of currencies: steem, steem power and steem backed dollar (the savings account were introduced only recently and they are there to protect your funds, if you want to withdraw from there it will happen over 3 days - it's still unclear for me too)

Now here's where is getting interesting:

  • steem, as a cryptocoin, can be traded in exchanges and more steems are "printed" everyday, to create the supply needed for the interactions
  • steem power gives you "authority" in the social network: the more SP you have, the more "money" you direct to the content you upvote. It's very important to know that SP cannot be converted directly into steem. You can convert into steem only by a process of 104 weekly payments, during 2 years (it's called "powering down" - and when you convert steem into SP it's called "powering up"). So SP isn't very liquid. As a matter of fact, it's more like a share you own in the company itself.
  • steem backed dollar is actually a smart contract, it's pegged to the USD, which means it will always hold $1 worth of steem. SBD also earns 10% interest if you just keep it into your account. You can only convert SBD back into steem by a 7 days interval, meaning the actual transaction will take place 7 days from the moment of initiation.

So, every time you post something you get paid in a combination of steem, SP and SBD. You get paid if you upvote something, especially if you're among the first to vote and if that post becomes popular. It's called "curating reward" and it's a way to reward people who are filtering valuable content from garbage. The curation reward gets bigger if the entire pool of the post is bigger. Ex: a post is listed to be worth $100. Out of this $75 can go to the author and $25 to all the people who upvoted the post. And out of the $75, you get $35 in SP, $17.5 in steem and $17.5 in SBD (these are not exact numbers, just a simulation).

You can apply different strategies based on your goals. If you want liquidity, convert everything into steem and change them into an exchange in your preferred cryptocurrency and then to fiat. If you want to stay in the Steemit community a la long, you should then power up a large portion of your reserves, to acquire SP, in order to grow your influence.

This combination makes Steem unique and as a beginner myself (I'm here for less than 10 days) I look forward to see it unfolding.

P.S. Oh, and one funny and cute thing: the levels of richness are measured in the ecosystem based on marine animals: so people who own the most value are called "whales", the next layer "dolphins" and so on...

I LOVE THIS. And very helpful tank you!
So I think I'll probably be up converting my steam power. Did I get that right?

If you want to stay here a la long, power up your steem into Steem Power. There's a little dropdown near the steem numbers in your wallet. Click that and choose "Power Up". I would also keep SBD where they are, they carry interest. It depends on your strategy.

Oh, and if you like this, you could upvote my comment. You're literally voting with your wallet. :)

I'm a new steemian too. I was introduced to it by a friend. I don't know much about it myself. I do know it is much cleaner than any other social network I've seen. I also inspired me to get my creative juices, that were buried a long time ago, to start flowing again. It's a slow start, but I done a couple posts and have a few more in the works. Good luck and don't give up.

Oh! thanks, I'm not giving up. I just seek to understand it more! :)