Minnow I - Come In! The Water's Fine!

The intended audience of this post is people who do not yet have an account on the STEEM blockchain or are still acclimating to the platform. In order to keep this to a manageable length, every point I cover will have oversimplifications and omissions. I hope that those who feel inclined to do so will provide more detailed explanations in the comments.

The first and most important thing to understand is that this is not (just) a website; it is a blockchain with which the user can interact through an ever growing number of websites and apps. For those familiar with Linux (or any similar, open source OS), the dichotomy of kernel and GUI might be a good analogy to understand this structure. For example, a user can upload a video on Dtube, a second user can watch the video and comment through (the smart phone app) Partiko, a third user can see both the video and comment on (the websites) Steemit, Busy or Steempeak. All these platforms are automatically synchronized because they interact with the same underlying distributed ledger. For the same reason, a membership on the blockchain comes with a user account on every STEEM based application now existing or hereafter devised (in perpetuity and throughout the universe).

Assuming that you already understand the concept of a blockchain, here are three features which separate STEEM from simpler blockchains, such as BTC. First, instead of long character strings, the wallets have human parseable names, like those on most other web-based platforms. Second, in addition to financial transactions, the blockchain stores text and media files. This allows the blockchain to fulfill functions of a social media platform. Third, new units of cryptocurrency are distributed on a “Proof of Stake” model (more on this later).

Now, I will tackle the single greatest point of friction: getting onto the blockchain!

For various structural reasons, creating a new account requires that a transaction be performed by an existing member. You can apply for an account from Steemit or a few other applications. It is free of charge, but the wait might be a few weeks. There are a few other options which are effectively immediate. Through the use of https://steeminvite.com , current members can create new accounts by spending either STEEM tokens or Resource Credit mana. There are also some third party vendors which create new accounts for a fee (prices and accepted forms of payment vary): https://account.steem.ninja , https://anon.steem.network , https://www.steemcreate.com .

Once your account is is created you will receive a password. It will be an inordinately long string of letters and numbers. Although it is commonly called a “password”, it is, more technically, the cryptographic key which allows for the secure use of your account's cryptocurrency wallet. Keep it secret! Keep it safe! If you lose this alphanumeric string, you lose the account and any money attached to it.

The next concern is moving money on and off the blockchain. The process may become simpler in the near future, but, for the time being, what might be called the default method involves using https://blocktrades.us to exchange STEEM tokens for BTC (or another cryptocurrency of your choosing). In order to exchange that for USD (or whatever people generally use wherever you are), you will need an account on a fiat/crypto exchange. My recommendations for this are https://www.coinbase.com and https://www.abra.com .

Once all of that is accomplished, you will be fully ready to begin publishing, viewing and interacting with content on the STEEM blockchain. Every account has the ability to act in two complimentary roles: “Author” and “Curator”. I will touch on the role of “Curator” first:

Imagine that, at certain intervals of time, you have the ability to magic a certain amount of money into existence. The catch is that, in order for the magic to work, you have to give three quarters of that money to someone else. This isn't really what is happening, but, since a real explanation involves several moving parts, including “Proof of Stake” (which I, still, will not explain until later), I will treat this fanciful lie as being the case, for the time being. I put forth the excuse that the whole of you fall into one of two camps: either you treat all technological processes as magic, or you will be willing to research the technical explanations on your own time.

The mechanism by which you cast this spell is clicking the upvote button on posts. Exactly seven days after a post is published, the votes are tabulated, and the monetary rewards are distributed to the author and curators. Votes cast after this time have no monetary worth; so, make sure to check a post's age before voting. Another item worthy of attention, is voting strength. Every time you vote, a mana bar on your account drops by about 2%. This is 2% of the previous level (not of the total); so, the level might dip to infinitesimally small levels but never reach zero. It takes 144 minutes to recover from one vote; so, the optimal frequency to maintain balance is 10 votes per day. You can keep track of this mana bar by using the browser extension available at https://steemplus.app . The monetary value of your vote is determined by the “weight” of your account's “stake” (a concept I will address eventually) multiplied by your vote's “strength” (the mana bar that I mentioned previously). This weight is applied to calculating a share of the network's newly generated tokens (the “Daily Reward Pool”).

As an Author, you create the posts for others to curate. A multitude of forms are possible (text, pictures, video etc.) in endless and ever expanding categories (the requisite “tags” section you will find when publishing a post). It is vitally important that whatever you post be your own work (not plagiarized) and properly categorized (particularly regarding the nsfw tag, when necessary). Such violations of etiquette will result in Curators flagging your post, decreasing its visibility and monetary reward.

On each post (including this one) you will notice a monetary amount in the form “$X.XX”. This is what I like to call the post's “Box Office Gross” in that it is a rough estimate of the post's total revenue. This figure is calculated in USD based upon current exchange rates of the component cryptocurrencies (which I will explain shortly). At the end of a post's 7 day “theatrical run” the revenue is distributed to the Author and Curators (in a 75/25 split).

This distribution takes the form of a mixture of three cryptocurrency tokens: STEEM, STEEM Backed Dollars (SBD) and STEEM Power (SP). STEEM is the basic token of this blockchain; its value fluctuates against the various fiat and cryptocurrencies according to market forces. SBD is a secondary token which packages an amount of STEEM roughly equivalent to 1 USD at the present exchange rate (that is, the exchange rate at the time that it is generated). The proportion of new STEEM packaged in SBD is algorithmically determined to keep the value pegged to USD as much as possible. SP is STEEM deposited to long term term storage in an account's wallet.

SP can be “powered down” into an equal amount of “liquid” STEEM in 13 weekly installments. Conversely, liquid STEEM can be immediately “powered up” to an equal amount of SP. The amount of SP in your wallet is your account's “stake” in the blockchain. As I explained earlier, this stake is a determining factor in the monetary value of your votes (and, therefore, your ability to earn a portion of that value with each vote cast). Also, you have the option to lend a portion of your stake to other accounts through a mechanism called “delegation”.

The community commonly refers to the size of accounts' stakes in terms of an aquatically themed ranking system. These ranks are: Plankton (<500 SP), Minnow (500+ SP), Dolphin (5 000+ SP), Orca (50 000+ SP) and Whale (500 000+ SP). @steem-plus further divides these ranks into Third, Second and First Class for each sea creature. I am making this post to mark my ascension to the semi-exalted rank of Minnow First Class.

If you are someone whom I have met in the realms of IRL/AFK and invited to the blockchain, leaving a comment on this post is probably the best way to let me know that you have arrived.

Previous Posts in this Series:
https://steemit.com/steemit/@thebigwhitevan/plankton-i-soft-money-for-robotic-bribery
https://steemit.com/steemit/@thebigwhitevan/minnow-iii-i-honestly-do-or-in-defense-of-financial-masturbation
https://steemit.com/steemit/@thebigwhitevan/minnow-ii-getting-ahead-of-myself