Why do we need STEEM POWER?steemCreated with Sketch.

in #steem • 6 years ago

STEEM tokens are produced by the Steem blockchain 24 hours a day, 7 days a week. What happens to them next? I will explain it to you in a simple example.

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About 60,000 STEEM tokens are created daily and this number will expected to drop over the next 17 years. The new tokens that are created are divided into three groups:

✅ 10% of STEEM tokens goes to witnesses for powering the blockchain network. This is their automatic payment for maintaining servers.

✅ 15% of new tokens are awarded to STEEM POWER owners at all times. So here is the first plus freezing of your STEEM tokens on the platform shares. Therefore, the balance of our SP units grows automatically all the time by a small percentage.

✅ 75% of the whole majority of newly created STEEM tokens goes to finance the reward pool, divided between authors and curators. Who decides to give them each day? Just STEEM POWER owners.

The Steem blockchain network is like a token factory. The owners of STEEM POWER decide about their distribution. The amount of SP owned determines the number of new tokens that someone can give away in the form of votes each day.

Imagine a factory that gives away something for free. The bigger the car you have, the more goods you can take out each day. STEEM POWER is the size of your car. So if you have little STEEM POWER, it's as if you were coming to the free goods on foot, while others would be loaded with full trucks. Of course, you can only take the goods for yourself, by voting only for your own posts, but then you lose the opportunity to earn a living as a curator (seeker of high quality content) and the community may not like that you can take a lot and you only think about yourself.

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Source: Pixabay link [CC0 License]

STEEM tokens are created from nowhere. Their value is determined on the global market. The factory will gradually reduce the number of tokens created for the next 17 years. Their possession in the form of STEEM POWER gives you the power to decide who get new created STEEM tokens. Although many still sell tokens received, the STEEM price should increase at the current stage of the platform. The number of active users on Steem is still nothing compared to the global market, where millions of people can trade in tokens from around the world. Let's collect STEEM POWER so that our power in the Steem blockchain will grow.

Thank you for reading!

#blockchain #blog #steemit #steempower
6 years ago in #steem by
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     6 years ago 

    Tremendously amazing, thanks a lot for your info very clear ..!!

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     6 years ago (edited)

    That was seriously the simplest most effective way to explain the process and I now have a clearer picture because of it. I have also just recently decided to stop delegating my steem power and return it so I can get more involved and add to the community by genuine interaction.

    Thank you for that input. Greatly appreciate it.

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     6 years ago 

    Thank you for your comment. I'm happy to help someone better understand Steem.

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     6 years ago 

    So if I delegate my SP does this mean the newly generated tokens go to the one who I delegate my SP to?

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     6 years ago 

    No. The delegation allows others to vote with your power. They receive curatorial rewards from this power. However, new tokens for having SP all the time go to you.

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     6 years ago 

    Thanks for explaining. I’m learning something new everyday 😊🙏

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       6 years ago 

      The SP, allows you to grow and make others grow, particularly I often think about delegating my SP. However, when understanding how this ecosystem works, without a doubt it is better to keep it own and work it.

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       6 years ago 

      I am collecting all the steem power and convert steem and sbd into steem power too.

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       6 years ago 

      Steem from the community perspective is the best dPoS blockchain!💪

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       6 years ago 

      @astromaniak this is a very clear post and hasd helped me understand the inner workings of the blockchain. the only thing i would say is that tokens are n ot generated from nowwhere. witnesses produce the price and are rewarded in SP as far as i understand. but great post, followed!

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       6 years ago 

      Good explanation of SP, @astromaniak. Very succinct.

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       6 years ago 

      that's exactly what i was looking for :) thanks