I’ve written on the Steem blockchain for over a year, covering a number of topics, including Steem itself. I wanted to put together a resource for Steemians that could run the gamut from “Steem for beginners” all the way to “Expert Steem tips”. This is the result of that effort. Before we can talk about Steem, however, I’d like to say a few words about Bitcoin and skepticism.
Most people heard about bitcoin long before its rise to $19,500 in 2017. For most of us, the concept of an internet money sounded alarm bells louder than the opportunity for profit. Many early adopters who bought bitcoin changed their lives, as the price of bitcoin rose from nothing to thousands over a very short period of time.
There is a natural instinct we have to be cautious about new ideas and platforms, because they upend the order we have created in our lives. I grew up reading comic books, and in the pages of so many comics were advertisements for fantastical toys, such as X-ray glasses or Charles Atlas’ bodybuilding course. Thirty years ago, somebody could sell scams in a comic book to boys around the country, and there was little to no accountability. The boys, however, remembered, and when they matured they did so with a healthy sense of skepticism.
The internet, however, and now cryptocurrency, has rewarded those who can suspend their skepticism. Early adopters who bought bitcoin and studied blockchains found a technology that could be used for purposes beyond simple value transfer, and the result is challenging the social media models that began in the early Aughts.
Social media itself is a concept that nobody could imagine in 1988. It arose among a second wave of internet growth that supported high data throughput and low cost of consumer electronics. The future isn’t filled with flying cars; today, our nation is addicted to pocket sized supercomputers that connect us to one another-for better or for worse.
Chapter 1: Steem for Beginners
Steemit is a next generation social media platform unlike anything else. It uses the technology behind bitcoin-blockchain-to allow users to capture the value that has been traditionally captured by a third party. There is no Mark Zuckerberg making millions off of steemit posts; users themselves are rewarded, and can reward one another, creating an ecosystem that is novel and mostly untested. In a time when traditional social media has grown divisive and toxic, steemit rewards civility and manners.
Steemit is an opportunity for content creators that is currently understood by a few early adopters. The purpose of this short book is to introduce more content creators to steemit. As a steemian, I have a vested interest in bringing more people to this platform. Furthermore, as a blogger and writer, I hope you follow me and engage in my content there.
I expect my readers to be skeptical. Skepticism is important in cryptocurrency, as scams such as Bitconnect and Onecoin have taken advantage of people who weren’t skeptical enough. Be skeptical of what you read here and other places online; you should begin by reading this book but continue to challenge the assumptions I make, even as I encourage you to begin using steemit and making money.
Steemit is a social media network that captures and distributes the value of the network into its users. It does this by slowly inflating the supply of steem. Every day, about 45,000 steem is created and distributed to content creators. The rewards are distributed, via vote, by those with a stake in the platform. Those with a greater stake in the platform, measured in “steem power”, have great control over who gets the rewards. In simpler terms, your upvotes give out more money the more steem power you have.
Steemit users, known as Steemians, are able to access the Steem blockchain by holding Steem Power. The more Steem Power one has, the more access and control one has. For instance, a Steemian with 100 Steem Power will be able to post more content than one with 15 Steem Power. Steem Power is created by locking up Steem, in a process called “powering up”. This creates incentives for users to create and reward the best content. We’ll look deeper into this in a later chapter.
Content creators new to steemit should begin by reading any number of steemit beginner’s guides, which recommend ways to grow organically within the community and best utilize the power of steemit. Some of the beginner recommendations include:
- Comment on a number of posts that interest you.
- Follow others who post articles of interest to you.
- Post content on your own blog regularly.
This is good advice for anyone, and especially good advice for those who don’t already have a following when joining steem. Those of you who already have a platform-those with a large (5k or more) following, should take these advanced steps:
- Create an “Introduce Yourself” post with you holding a handwritten sign with the date and “steemit” or something similar to prove it is you.
- Let your followers know you’re on steemit via your other channels, such as Twitter, Youtube, etc.
- Consider putting a little extra time in engaging with your fans on steemit. If you’re more actively responding here, it will encourage more users to sign up on steemit to get access to you.
Newer bloggers are going to need to realize that earning rewards on steemit can be random at times, and that many articles will go unnoticed early in your steem career. That’s ok. Your goal should be to consistently produce great content.
Posts will require a title and up to five hashtags. The trending topics are located on the left hand side of the Feed page, with the most popular at the top. You can, however, create any hashtag you like. Using a unique one that focuses on your particular brand is a good way for users to sort through your articles.
Post rewards are displayed below each post and are the unique selling point that Steemit offers. Each post begins with $0.00, but as it receives more upvotes, the number rises. The reward is not directly correlated to the number of votes, however, but instead to the amount of steem power each voter holds. Those with more steem power have more powerful upvotes.
What’s important to realize, however, is that voting does not take money from the upvoter to the votee. Instead, upvoters are determining how the rewards pool created 7 days from the post will be distributed. The rewards pool is generated from constant inflation of the supply of steem.
Furthermore, upvoting content results in curation rewards. 100% of the rewards value of the post does not go to the content creator. Instead, 75% of it goes to the creator and curators, while 15% is distributed to steem power holders and 10% goes to the witnesses (people who host the servers that support the network).
At a very basic level, if your post shows $10 after 7 days, you will share $7.50 of that with those who upvoted you, while the vested token holders (steem power holders) will receive $1.50 and $1 goes to the witnesses.
The rewards are split as steem power and steem blockchain dollars, which can be sent to an exchange and traded for bitcoin or ethereum, or used within steemit for various services offered by other steemians. Steem, like bitcoin and other cryptocurrencies, is real money, but those who want to turn it into dollars for doing things like paying bills can do so fairly easily.
When posting, you have three options for rewards: 100% power up, 50/50, and no payout. You’re going to want to pick one of the first two if you want to get paid. 100% power up results in all of your rewards (which is 75% of the actual $ reward number) going into steem power.
Steem power takes 13 weeks to fully access, so if you hold 13 steem power and decided you wanted to cash out, you would get about 1 steem per week for 13 weeks.
In contrast, 50/50 splits the rewards into 50% steem power and 50% steem backed dollars, also known as SBD. SBD was designed to trade as $1 USD worth of steem, but recently it has traded much higher. When SBD are trading significantly above $1 (at least $1.50 or more), you’re going to make the biggest return by choosing 50/50 split. You’re also able to more quickly access your profits this way, if you’re using your earnings to pay the bills.
Is this confusing? Let’s go through an example for each one.
John posts an article using the 100% power up option. His article earns $20. 7 days after his article was published, he is able to collect his reward. We will assume the price of steem is $4 for this example.
$20 is separated into the three parties: 75% is split between John and the curators ($15), 15% is distributed to vested token holders ($3), and 10% to witnesses ($2).
John receives, say, $14 worth of steem power in his wallet (a little goes to the curators, remember!), which is calculated by dividing $14 by $4, for a total of 3.5 steem power.
John decides a few days later that he wants to power down his steem power into steem. Powering down steem power takes 13 weeks. Each week, John will get 3.5/13 worth of steem, or .269 steem.