Steem, sometimes known as the “social blockchain,” was built from the ground up to support decentralized applications like blogs and social networks.
Steemit and Dlive would not exist without this underlying technology. Before exploring the many applications created on top of the Steem blockchain, it’s important to understand the underlying technology.
Steem’s blockchain is said to be capable of processing 10,000 TPS and has a block time of just three seconds.
Witnesses, the Steem network’s validators, receive 10% of block rewards thanks to Steem’s Delegated-Proof-of-Stake (DPoS) consensus process.
In contrast to other DPoS blockchains, Steem allocates 75% of all freshly generated staking rewards to a rewards pool that pays users for creating and engaging with content on Steem-powered decentralized social networks and decentralized applications (dApps).
Users who contribute to the pool by creating content and those who contribute to the pool by moderating and curating material receive an equal share of the prizes.
Instead of using micropayments, tips, or paywalls, which can turn readers and other users away to free alternatives, the Steem founders decided to adopt a rewards pool model instead.
Also, in the Steem ecosystem, users are rewarded for activities like content creation, voting, and commentary. Rewards are available for identifying new Steem apps before they become popular and effectively moderating content.
Steem Blockchain: What Is It?
Steem is a public blockchain, a distributed ledger that stores data in the form of plain text and cannot be altered. As we’ve already established, it’s driven by an internal incentive system financially compensates content creators and disseminators with STEEM tokens.
Steem is the distributed blockchain database that keeps all the records, including text content, transaction data, and reward computations and payouts, and is available to the public.
Nonetheless, a frontend web interface is required for content creators and users to interact with the Steem Blockchain and access its data; Steem DApps provide this.
One example is Steemit, a social DApp that uses the Steem blockchain and gives out Steem tokens for participation.
With its built-in incentivization mechanism, the Steem blockchain aims to build a currency that can reach a wider market, including people who have yet to join any digital economy. Let’s dig a little deeper into the Steem Blockchain.
How Steem blockchain produces a new block?
The Steem blockchain relies on a consensus process known as delegated proof of stake (DPOS) to generate new blocks at regular intervals.
The “miners” in this paradigm are replaced by “witnesses” who generate blocks. Witnesses in this context are the account holders responsible for creating new blocks.
The witnesses are chosen by a vote of the entire Steem community, including everyone with a Steem account. Each account holder can choose up to thirty witnesses. The community chooses twenty permanent witnesses, with the other place being split between the two backup witnesses.
These 21 nodes produce blocks and serve as the network’s governing body. Creating a new block every 3 seconds is a requirement for each witness. This means that every 63 seconds, 21 witnesses generate 21 blocks. The witnesses receive Steem Power as payment each time a block is generated.
To function, the Steem blockchain utilizes three native digital assets: steem (STEEM), steem power (SP), and the steem blockchain dollar (SBD).
The goal of this system is to provide a stable unit of account and incentive for participants through a reward system independent of volatility.
In 2016, the Steem blockchain launched without a pre-mine and began distributing STEEM at a pace of about 800 per minute with an initial inflation rate of 9.5%, which will fall by about 0.5% each year until inflation hits a static 0.95% per annum.
Let’s take a look at the assets that make up the Steem crypto ecosystem and how they work:
As the native cryptocurrency of the Steem blockchain, STEEM is distributed to DPoS validators as a block reward, with the vast majority of freshly created STEEM going into a pool for curation and content-related incentives. The Steem blockchain operates on its cryptocurrency, which is called STEEM.
Steem power (SP)
Steem holders can direct more of the rewards pool with their upvotes. Every year, SP holders are given a percentage of the newly created STEEM, currently at 15% but subject to change. Staking STEEM for as least 13 weeks is the primary method of gaining SP.
This process, known as “powering up,” converts STEEM to SP over a somewhat lengthy vesting schedule. In addition, you can “power down” your SP and turn it back into STEEM in increments.
Steem blockchain dollars (SBD): SBD is a stablecoin meant to be a soft peg to the U.S. dollar. The value of one STEEM after the conversion of one SBD is determined by the market at the time of conversion.
STEEM Crypto Rewards
Earning STEEM coin is possible in a number of ways, including purchasing Steem-related assets on exchanges and becoming a DPoS validator.
Still, it is also possible to contribute time and effort to a blockchain social media site that STEEM powers.
Rewards are proportional to the number of votes cast in your favor. Users’ interactions and the network’s expansion are seen as critically dependent on this type of crowd-sourced curating.
In the Steem network, your steem power (SP) is equivalent to your influence; the more SP you have, the more you will gain through upvotes.
Those who vote fewer times per year have more influence than those who vote more frequently.
The system is meant to give content authors an instant monetary incentive and a stake in the network itself, with upvote rewards distributed as an equal split of SBD and SP. If a creator chooses this option, they will receive all of their awards in SP.
Free Steem Crypto Transactions
Steem’s blockchain uses transaction fees at no cost to encourage the system’s expansion. The developers of Steem think a decentralized social media network like theirs should have no restrictions on who may join and start sharing and discussing information.
Even microfees have been demonstrated to cause user anxiety and dissuade potential adopters from engaging with blockchain-based social media networks. Furthermore, even blockchains with microfees (less $0.01) that allow micro-tipping tend to have changing transaction fees, which may restrict content-tipping when fees rise.
Steem’s cryptoeconomics are predicated, in part, on the idea that users want price transparency and that many users are used to getting their services for free.
Due to the lack of transaction fees, the Steem blockchain has a bandwidth-limiting technique to prevent spam assaults.
Auser’s weekly bandwidth allotment is used up by their interactions with the platform, such as commenting, reacting, and coin transfers, while merely viewing content uses no bandwidth. More SP means more bandwidth for the user.
What Is Steemit?
Steemit was the initial decentralized application (dApp) on the Steem platform and is sometimes mistaken for the Steem blockchain itself. Users can earn cryptocurrency by contributing original content or curating that of others.
Steemit, which debuted in 2016, is the longest-running social media site built on the blockchain. Although English-speaking users make up a large portion of Steemit’s user base, the platform also supports various languages through user-generated content. Quite a few Koreans contribute to Steemit.
After a collaboration between TRON and Steem gave Sun control of most of the network’s tokens in March of 2020, TRON CEO Justin Sun performed what is commonly referred to as a hostile takeover of the Steem blockchain.
Afterward, Sun prevented a user-initiated soft fork of the network. As a result, many of the project’s creators and other interested parties abandoned ship, with some moving on to the new Web3 blockchain, Hive.
Other Steem Apps and dApps: Past and Present.
Although Steemit was the initial decentralized application (dApp) on Steem, it was certainly not the last. Numerous additional platforms have jumped on Steem to enter the competitive blockchain social media market to foster a broad decentralized social media ecosystem. Some noteworthy examples of Steem decentralized applications are listed below.
D.tube, which bills itself as a decentralized YouTube, claims to be the first blockchain-based social media video platform. STEEM tokens were awarded to D.tube users when the platform first launched because it was based on the Steem blockchain and the IPFS distributed file system. After gaining traction on Steem, D.tube migrated to its own blockchain, Avalon, and began issuing its cryptocurrency, dtube coin (DTUBE).
Live video streaming is at the heart of Dlive, a blockchain-based social media platform called Dlive. Dlive, like many other platforms, sprang from the Steem ecosystem but has since changed hands and chains countless times. Initially, Dlive ran on the Lino blockchain, but later it switched to TRON.
TravelFeed is a travel blog aggregator where authors can earn money from their posts and use their own domains. Although TravelFeed was initially built on the Steem blockchain, it has since been ported to the Hive platform.
Built on Steem and the IPFS, 3Speak is a live streaming and video network that places a premium on free expression. Like many other dApps on Steem, it moved to the Hive blockchain when TRON acquired Steem.
Dlike is a social media sharing dApp that organizes material into categories like popular, fresh, and trending, and allows users to narrow their results using keywords. Dlike is like a decentralized version of Medium and Instagram, with an interface not dissimilar to that of Steemit.
Steem’s feeless transactions and fast throughput have made it attractive to developers of a wide variety of decentralized applications (dApps), including DEX platforms, gambling dApps, blockchain-based games, and decentralized crowdfunding.
Even if many of these dApps have moved to their own chains, the Steem blockchain nevertheless regularly supports combined assets worth hundreds of millions of dollars. A number of Steem-based projects have moved to new chains, although this is not uncommon in the cryptocurrency industry.
Many projects established on Ethereum have now moved to other chains or spun off onto their own. Many Steem projects, dApps, and aficionados are still dedicated to the platform despite the rumors that Tron will take it over in 2020.