8 min read
What is Steem?
Steem is a cryptocurrency used to power Steemit, an incentivized social networking blockchain platform.
Users create and select content on Steemit just like other social news platforms (e.g. Reddit, Hacker News) and are rewarded in STEEM tokens for their contributions to the network.
Steemit is a meritocratic platform, since the more value a content provides, the more a publisher can earn.
Users cast votes, creating a hierarchy of content, and the more upvotes a post gets, the more it wins.
Another interesting feature is that users who have more coins in STEEM have more influence in casting votes.
How does Steem work?
Steem has 3 types of digital tokens that make up the Steemit ecosystem:
It is the main cryptocurrency of the Steemit platform. When a content publisher gets votes, it earns STEEM tokens.
In addition, about 90% of the new STEEMs that are created go to users who have a large amount of Steem Power (SP), creating an incentive for participants to reinvest their earnings back into the network.
Steem can be exchanged for bitcoins or other cryptocurrencies through various exchanges.
- Steem Power (SP)
If you want to have the right to vote in Steemit, you will need to convert your STEEMs to Steem Power (SP). This process is known as “powering up” and is equivalent to a capital investment in the Steemit network. Each unit of SP equals one vote and users who own the most SP have the most influence over which content to reward and make more visible. That is, the up and down votes of users with more SP are worth more than those of users with less SP.
- Steem Dollars (SBD)
Steem Dollars, valued at 1:1 to the US dollar, represent a way of lending the community the value of one US dollar. This is a mechanism designed to foster the growth of the network.
How to mine Steem (STEEM)?
As of August 2, 2017, when Justin Sun, founder of the Tron platform, bought the company, there was a restructuring of Steem’s operations and what was known as the mining process, based on Proof of Work (Proof of Work) no longer exists. Instead the Steem network bases its protocol on Delegated proof of stake.
Let’s see how this algorithm works and what advantages it brings compared to the Proof of Work.
As we have seen, Steem is based on a new state-of-the-art blockchain technology called Graphene, which uses “witnesses” instead of “miners” to produce blocks. The purpose of using Delegated proof of stake (DPOS) is to increase the speed of transactions on the platform and make it more scalable. To achieve this, Steem uses tokens, which are accounts approved by Steem stakeholders that are responsible for creating a block every three seconds.
Each Steemit account has the ability to become a witnesses by setting up and maintaining a Linux server that is capable of creating new blocks on the blockchain.
The Steem blockchain schedules witnesses to produce a new block every 3 seconds. To be more precise, 21 witnesses (nodes) produce 21 blocks in each 63-second round.
In addition to the speed in mining new blocks, the Steem blockchain, unlike Bitcoin’s, does not allocate 100% of the new coins created to miners, but uses 10% of the new coins as rewards to pay witnesses. The other 90% of the new STEEM coins are awarded to content publishers, curators and Steem Power holders.
How to become a Steemit witness?
Being a Steem token has nothing to do with the traditional mining process since in order to mine new cryptos, you have to get votes from the Steem community so you can be one of the top ranked tokens.
So, if you want to become a Steemit witness, just follow the steps in this guide:
1. Get servers with very good performance and that are secure. If you want to be among the first 20 witnesses, it is advisable to use a server with the following characteristics:
- 64GB DDR4 RAM,
- 2x Intel Xeon E5-2630 V3
- 2x 240GB SSDs
- 1Gbit/s connection
Make sure that the server you use is protected from potential computer attacks. There are many tutorials that explain which programs to use to secure Linux servers.
Regarding hosting, many Steem users advise to use one of the following hosting:
2. Install Steem, edit the configuration file and synchronize the blockchain.
3. Use the wallet CLI to create your private key and edit the configuration file again.
4. Update the witness to verify that it is working and post a witness statement thread.
How much do Steem witness accounts earn?
As we have seen previously, the earnings of the witnesses are in Steem Power (SP) and each block they generate is equivalent to 1 Steem Power.
The more SP they earn, the more they increase their voting power used for healing or for their personal use.
Normally the witnesses who earn the most SP are those in the Top 20.
These get about 0.18 Steem Power every 63 seconds, or about 250 Steem Power per day, which equals about $300 per day at the current Steem price.
In short, on the Steemit platform, the coins created are distributed in this way:
- Content authors/curators receive 75% of the new coins created;
- Users with Steem Power holdings are allocated 15% of the coins;
- The remaining 10% is awarded to witnesses.
Well, while it’s probably not profitable to be a witness in the short term, in the long term being an active part of the community can pay very well, especially if combined with author rewards and curation rewards.
Which wallet to use to store Steem?
If you have decided to jump into the Steemit user community and wish to earn your first Steem tokens, I advise you to first get a wallet in which to store your STEEM.
Although there are many options, we advise you to use one of the following wallets:
- eSteem Wallet
It is a mobile wallet that, in addition to storing Steem tokens, allows you to access blog posts and material as it is linked to your Steemit platform account.
It is an online wallet for Steem, where your private keys are stored.
Vessel is a desktop wallet that you can download to your PC. It is a soft wallet as you don’t have to download the entire blockchain on your PC. The private keys are stored in the wallet itself, which makes it secure and makes Vessel one of the best Steem desktop wallets.
- CLI Wallet
This is a desktop wallet that you can connect directly to the Steemit web wallet. CLI is considered one of the best Steem coin wallets although it is not designed for beginners, as users should have some understanding of command line programming.
Where to buy STEEM?
Finally, if you want to get STEEM tokens easily and quickly, you can purchase them from Bitnovo at the most competitive price on the market.
You will be able to buy them online in a matter of seconds or in cash in more than 40 thousand physical stores all over Europe through our coupons redeemable for cryptocurrencies.