Steemit: An In-depth look at a Cryptocurrency and Blockchain
In our other blogs we discussed the gist of cryptocurrencies and blockchains. To help better understand these fascinating and beneficial mediums, we will dive deep into a popular real-life cryptocurrency and blockchain.
Firstly, lets briefly revisit blockchains. A blockchain is a digitized ledger, who’s sole purpose is to create a public record of transactions involving cryptocurrencies—similar to a receipt and/or a bank statement. Now that we know what a blockchain is, lets take a look at one.
Steemit: A Social Media Platform with Cryptocurrency Capabilities
You may, or may not have, heard of an up-and-coming blockchain known as www.steemit.com. This website also functions as a social media platform, but unlike facebook or twitter you are able to garnish value through your posts or comments. This is made possible through a cryptocurrency known as STEEM. There are a few extra steps to obtaining STEEM through your posts or comments, but for now lets simply explore steemit.com’s basic functions.
Essentially users will create profiles and use them to blog, or share content, such as music or videos. Viewers can then “upvote” these posts which in turn, rewards the author via STEEM currency. Also, in addition to authors of posts being rewarded, users who comment on these posts and gain popularity can also be rewarded (comments can be up voted as well). For reference, take a moment to check out this user’s profile. https://steemit.com/@tttn.
If you look closely, you will see that this user has multiple posts on their account. If you look in the bottom left-hand corner of each blog title then you will see a $ amount listed with an arrow on each side (one up, one down). Let’s say a group of users find these posts informative, or helpful. At no cost to their self, they would “upvote” these posts (pressing the up arrow) which then rewards the author with $ value for their post.
It is important to note that this $ value is representative of a $STEEM. Although similar, $STEEM is actually different in value to STEEM (Steemit’s cryptocurrency). Note the dollar sign, this is very important.
This may be intimidating on the surface, but after a small learning curve it is well worth your efforts. Here we will breakdown the cryptocurrency to a tee. Hopefully shortening your learning curve for STEEM, while also helping you grasp how you can reap benefits from cryptocurrencies.
STEEMIT: The Ecosystem and the Value That Resides Within
Think of Steemit as its own nation with its own economy, and currency. This is not too far from reality. What has happened is the production of a medium ($STEEM) that holds real-world value when exchanged for other cryptocurrencies (Ex. STEEM, or Bitcoin).
Some may wonder what’s the point? Why not use real money? Well simply put, $STEEM’s intrinsic value is infinite. What we mean by infinite, is that no matter what, your $STEEM will always be worth $1 USD each no matter what.
This is where the Steemit ecosystem comes into play. Remember earlier when we mentioned how there is a difference in STEEM and $STEEM. Well now we will explain exactly what that means.
STEEM is an exchangeable cryptocurrency. It has a real-world value that may or may not change based on inflation. $STEEM (note the $) is a currency created within the Steemit ecosystem and it can only be exchanged for STEEM. It will never change in value and will always be worth $1 USD.
How is it worth $1 USD? didn’t you just say $STEEM can only be exchanged for STEEM? Located within its complexity is simplicity. Steemit has created a currency based on a commitment. That commitment is that no matter what, your $STEEM that you have earned will always be worth the amount of STEEM it takes to obtain $1USD. Confusing at first, but once again it is infinitely beneficial to understand.
The Math and The Reality of $STEEM
Forget the never ending ocean of words, lets look at numbers. For this example, lets assume that one unit of STEEM is currently worth $0.25 USD. (We say “currently” because STEEM can change with inflation while $STEEM cannot)
Popular Johnny posts a funny cat video on Steemit, obtaining 100 upvotes, and he is rewarded 1 $STEEM. He wishes to exchange his 1 $STEEM for real money.
$STEEM = $1 USD
STEEM = $0.25 USD
4 x STEEM = 1 $STEEM
Johnny exchanges his 1 $STEEM for 4 x STEEM. Now Johnny owns an exchangeable currency. He can take his 4 STEEM and trade it for whatever other cryptocurrency he pleases.
$STEEM is one of the many examples in how someone can benefit from the use of cryptocurrencies. It can be intimidating at first, but it’s benefits are enormous. The most notable benefit is always having the upper hand on inflation, or deflation of other cryptocurrencies, because no matter what your $STEEM will always be worth $1USD. This results in a difficult to trace financial security. Also since $STEEM is a currency that functions within the Steemit community, it cannot be taxed. Just another example of its many benefits. The best part about Steemit is that to get started, it’s as simple as signing up for free.
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