Understanding Steemit For Beginners (Economic Fundamentals)

Good Day Steemian, wherever be in good health always, Amin. This time I will post about the steemit users who are newbies and new to steemit. It is not easy to understand the overall concept of Steemit because its economic fundamentals are quite different from those of other cryptocurrencies. Reading the document whitepaper Steemit which is 44 pages thickness is also quite confusing head especially if not impatient.

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The purpose of writing this post is to share my understanding of Steemit so far. It should be understood that I am also just beginning to learn it and not a Steemit expert, if there is any hope please be advised and more happy if you want to help correct it by commenting below this post.

Steem & Steem Power & Steem Dollar

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To understand the fundamental concepts of Steemit's economy, we must understand the functions of these three value units. First ... Steem is the unit value we can buy directly on the Bittrex platform exchanger, and note that it does not work like BitCoin where it is stored as value assets because every year Steem's total supply increased 2x.

How is Suppy Steem created? The answer is from Proof of Work when solving a block. Steem can be mined through Windows and mining power is determined based on your Processor, not GPU like Ethereum. So ... Steemit Network starts from 0 supply and based on what's written on its whitepaper: there are about 800 new steems created every minute.

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Second ... Steem Power is the value of a convertible unit of Steem. For you to re-convert from Steem Power to Steem takes 2 years, gradually as much as 104x payment. Why 104x payment because steem power you convert to steem will be paid every week .. Due to 1 year there is 52minggu then 2 years equal to 104minggu. This process is called "Power Down"

The advantage of having Steem Power is that we get Steem every time New Steem is created (still remember the above mentioned point that steam supply will continue to increase every minute?) In other words ... by steem conversion to SteemPower ... we are guaranteed to get Steem quantity (in the form of Steem Power) which is more over time running rather than storing Steem ente.

Example Analogy Case:

I Have 104 Steem Power ... then I click "PowerDown". Well what will happen is every week I will get at least 1 Steem and more in the week next week. The steem that I get gradually I can save, transfer, trade or go back to SteemPower.

If .... in the first week ... I can 1 Steem .. means there are still remaining 103Steem Power waiting to be melted ... Well ... 103Steem Power is still menjanas "Interest (Flower)" of each creation 1 Steem is new, so its value is still increasing as time passes, from week to week.

Each new Steem creation: 90% of the steam will be distributed to the Steem power holder in the Power Steem unit. While the remaining 10% will be distributed to those who contributed in posting articles / upvote and comment. In addition, when we are voting on a post ... the bigger the Power steam we hold, the greater the rewards that will be generated during the creation of the steam.

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Third is Steem Dollars. Stability is very important in any company's economic success. For that, Steemit has a unit value we call Steem Dollars, which has a fix value (equivalent) with 1 US Dollar.

Is Double Alloy Supply Steady 2x Fold Then Steem Value Will Drain Over Time?

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Really! Only the value of Steem will drain as time passes but the value of Steem Power and Steem Dollar units is not drained. Except in the case of certain cases where very many new entrants buy Steem which triggers steam values ​​soared mainly in the first 2 years where 90% steam supply is locked in Steem Power. Also note that every 3.32years, split reversion will occur 10: 1, every 10 Steems change to 1steem.

The Analogy of the Parable
Year 0: 100 Steem
Year 1: 200 Steem
Year 2: 400 Steem
Year 3: 800 Steem
Year 3.32: 1056 Steem

Well .. in the year to 3.32 = 1056 Steam will occur splitting and the quantity of Steem unit will return to 105.6 Steem.

So ... what's the next question is the purpose of the spelling process? The point is that the value of Steem distributed to Steem users who are actively committed to blog posts and holders of Steem Power unit is maintained. All these complexities aim to:

1. We can buy and sell Steem easily as cryptocurrency.

2. We can commit to the long-term and ensure cability so there is no panic sell that can lead to market destruction.

3. If we commit to long term, then we will get the reward.

4. If we contribute (Post, Voting, Comment), we will also be declared.

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For that .. indirectly, every Steemit user will ensure that the Steemit site is always lively, making it a great success including introducing to people about Steemit and encouraging them to participate.

If we spend time in the forum Reddit / Kaskus or other social media, not necessarily everyone can enjoy the benefits. But unlike the users who spend time in Steem, they they will get rewards only due to actively contribute in social media. One interesting thing before sy ending this article is, to start in Steemit, should not be required capital to buy Steem. You can start for free, just by signing up, we've been given free Steem Power which is worth $ 3- $ 10. Is not this amazing?

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So my post this time, hopefully my post is useful for all steemian and please advise and criticize my friends all in my posting post. We apologize for any errors in writing or exposure I have made.

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@ black-isr38