What is Steem coin

Steem is a public delegated proof-of-stake blockchain infrastructure geared toward social applications. The Steem blockchain rewards users who generate content with the STEEM cryptocurrency to incentivize content creation and curation; this encourages an active community that receives compensation from the content they produce and upvote, rather than having that data exploited and sold like it is on traditional social media channels. Steem is the underlying blockchain to the popular user-interface Steemit.

How Steem coin works

On most Steem-powered platforms, content creators and curators receive revenue for creating content as well as upvoting content on a platform. Content creators earn STEEM and STEEM Blockchain Dollars (SBD) when they receive upvotes on the content that they create, and those who upvoted the content–the curators–receive a portion of the total income for curating that content. The total amount of revenue generated per piece of content depends on the amount of STEEM Power–vested tokens–an upvoter has; the more STEEM Power a user holds, the more their upvote generates dollar-wise.


There are three tokens native to the Steem Blockchain, the Steem Token (STEEM), STEEM Power (SP), and STEEM Blockchain Dollars (SBD).

STEEM: STEEM acts as a unit of account and is meant to be transacted from peer-to-peer for goods and services.

STEEM Power:  Users have the option to lock away their STEEM for 13 weeks in return for an interest payment on their locked funds and additional benefits on the network–the act of locking the funds is called powering up, and the locked funds are referred to as “STEEM Power.”

The more STEEM Power an individual has, the more influence they exert over the distribution of the rewards pool–the fund where 75% of each block reward is sent–when they vote on content. In addition, 15% of the yearly inflation on the network is distributed to STEEM Power holders; The amount of these tokens the user receives is proportional to the amount of STEEM Power they hold relative to the total amount of Steem Power that is vested.

Unlike STEEM, STEEM Power is not divisible and can not be transferred to other users on the network, STEEM Power  is solely used for vesting.

When an individual decides they no longer want to lock their funds away, and would like to opt out of STEEM Power, that act is called “powering down;” and is initiated when users withdraw their STEEM Power to STEEM. However, the formerly vested tokens are distributed to the user over a 13-week (91 day) period in equal-sized payments, the first of which is released one week after the withdrawal request.

STEEM Blockchain Dollars (SBD): STEEM Blockchain Dollars facilitate easy exchange between STEEM and fiat currency. Each SBD represents the amount of STEEM tokens that can be bought with $1.00. For that reason, SBD is more like an IOU than it is actual ownership of the underlying asset(s). Although SBD entitles you to the underlying amount of STEEM or USD, SBD does not represent a share in either STEEM or USD until the SBD is redeemed.

All SBD holders are paid interest on the amount of SBD that they hold.

Decentralized applications

Developers can leverage the Steem blockchain infrastructure to create decentralized applications of their own. The Steem blockchain is geared towards those who are interested in creating social apps that monetize user engagement.  Building on the Steem blockchain instantly gives developers access to a pool of 1 million potential users because of SteemConnect, Steem’s single sign-on solution, where more than 1 million users of Steem can securely sign into any application developed on the Steem blockchain.


The Steem blockchain uses a Delegated Proof-of-Stake consensus algorithm, where users vote for witnesses who secure the blockchain; 21 witnesses–the top 20 witnesses with the most votes, and one witness that is time-shared among every witness that did not make it into the top 20– create and sign blocks on the Steem blockchain.

A block on the Steem blockchain is generated every 3 minutes, and a majority of the block reward–75%– is sent back to the reward pool. The remaining 25% is divided amongst STEEM Power holders and Steem witnesses; 15% of the block reward goes to those who hold STEEM Power, and the remaining 10% is distributed amongst the witnesses that secure the Steem blockchain.

Why Steem coin?

Steem provides the greatest benefits to those interested in creating or using social applications that monetize and reward content creators and curators. If you are interested in earning revenue by interacting with content, you may be interested in the Steem blockchain and the applications created on top of it.