Steem is a cryptocurrency that is used to conduct transactions on a blockchain-based social media and blogging network, called Steemit. Initially developed by Block.one Chief Technical Officer (CTO) Daniel Larimer and Ned Scott, the Chairman at Steemit, the Steem token and the Steemit platform allow users to earn rewards by posting content to the social media network.
Steem Is Earned By Users When their Content Is Upvoted
Users are compensated for contributing content to Steemit when they write and publish blogs on the distributed ledger technology (DLT)-powered social media platform. It’s also possible to earn rewards in cryptocurrency by commenting on other users’ blog posts. However, a blog or comment must be upvoted (liked) by other users so that the author receives compensation.
Steem’s market capitalization stands at nearly $120 million, with each Steem token currently trading at $0.373151 according to CryptoCompare data
Steem Blockchain Launched In March 2016
Larimer and Scott, who’s also the Chief Executive Officer (CEO) at Steemit, developed the Steem blockchain after the two reportedly met for the first time in January 2016. The initial or beta version of the Steem blockchain was released in March 2016.
Shortly after the launch of the platform’s blockchain, the Steemit social media network went live.
Described as a decentralized and censorship-resistant blogging network, Steemit is now among many other applications that have been developed using the Steem blockchain protocol.
Larimer Leaves CTO Role at Steemit
After working for almost a year as the CTO at Steemit, a New York-based firm (established on January 3, 2016), Larimer left the project in order to dedicate more time to developing the EOS platform, one of the largest blockchain networks for deploying decentralized applications (dApps).
As noted on its Github page, the Steem blockchain’s latest version 0.20.9 (and previous versions) are based on the “Proof of Brain” protocol, which serves as a social consensus algorithm for distributing the platform’s tokens.
According to its developers, Steem aims to become one of the leading DLT-powered platforms for building dApps with Smart Media Tokens (SMT). After being introduced on the Bitcointalk forum, the Steem project’s technical team confirmed that no tokens had been mined at that point. At present, Steem tokens are not mineable.
Steem Blockchain Uses Delegated Proof of Stake Consensus
The Steem blockchain uses the delegated proof-of-stake (DPoS) consensus algorithm to manage its decentralized network. All transactions broadcasted on the Steem blockchain are checked by validating nodes before they are processed.
According to its technical team, the DPoS consensus protocol has been designed to enable fast block times of around three seconds. There is also no cost associated with conducting transactions on the DLT-enabled Steem network. Other blockchain networks including EOS and BitShares, a decentralized cryptoasset exchange (DEX), also use the DPoS consensus protocol (among other crypto networks).
Dual Currency Model Used By Steem Blockchain
In order to store and transfer monetary value on the Steem blockchain, the platform’s developers have created two different crypto tokens including Steem, which is highly volatile, and a type of stablecoin, called Steem Dollars (SBD).
Steem holders have the option of staking their tokens into Steem Power, in order to acquire resources or gain more influence on the Steem blockchain. Meanwhile, the SBD currency has been designed to serve as a more stable store-of-value (SoV) that may be used to reliably conduct business transactions.
Steem Tokens Distributed to Content Creators, Witnesses, and Stakeholders
Steem’s developers have created an internal decentralized exchange (DEX) to allow users to trade their SBD and Steem tokens. As explained in Steem’s whitepaper, newly minted Steem tokens are awarded to content creators and other contributors to the platform - including various stakeholders and “Witnesses” (responsible for signing transaction blocks).
Steem blockchain users may create a unique account name (16 character limit), which may serve as a reference when conducting transactions within the cryptocurrency network. Over 1.2 million unique user accounts have been registered on the Steem network.
Steem Is An Inflationary Currency with a Decreasing Interest Rate
Unlike Bitcoin (BTC) which is a deflationary currency with a limited supply of 21 million, the Steem currency is inflationary - but its inflation rate has been programmed to decrease over time. When first released, Steem had a relatively high inflationary supply model that was expected to double every year.
However, the cryptocurrency’s community members decided to establish an interest rate of 9.5% (per annum) - which became effective in December 2016. This particular interest rate has been set to decrease by 0.5% each year - until the currency reaches an overall inflation rate of 0.95%.
Steem, One of the Most Active Blockchain Networks
Notably, the Steem blockchain is one of the most active cryptocurrency networks - with a relatively large number of dApps operating on its platform. As mentioned, Steemit was the first dApp launched on the Steem blockchain that used both SBD and Steem tokens.
While Steemit (the company) has had some management-related issues as the firm had to layoff 70% of its staff during last year’s crypto bear market, the Steem blockchain itself has been used by many developers to launch various other types of dApps.
In 2018, 44% of all users accounts registered on the Steem blockchain were being operated by daily or regular dApp users.
Wide-Range of dApps Released on Steem Blockchain
Some of the most popular dApps launched on the Steem blockchain include:
- The Steem Engine - a network for creating, buying, and selling Steem-powered tokens,
- Utopian Colony, a fundraising platform that promotes open-source software development,
- DTube, decentralized video sharing platform,
- SteemPress, a Wordpress plugin that allows users to connect to the Steem network,
- eSteem, an Android-based mobile app for blogging with a built-in wallet,
- Fundition, a peer-to-peer (P2P) crowdfunding platform