Introduction to Steemit. Part 2

Steemit Guiding Principles. Vested Shares SP. How Steemit Serves the Members

 

Steemit may seem to be an outlier in the cryptocurrency space. Bitcoin is a blockchain platform that focuses exclusively on finances. The focus of the Ethereum platform is decentralized apps and smart contracts. Other popular cryptocurrency platforms, such as Dash, Ripple and Monero, also aim to bring improvements to the world of financial transactions.

Steem operates in a different space, yet just like other successful blockchain platforms it solves existing problems and has its own philosophy.

Just like Bitcoin is based on three main principles, which are decentralization, transparency and personal responsibility, Steem also has three main principles.

The first principle is that every contribution to the platform matters and should be incentivized. The second principle of the platform is that all forms of contribution are equally valuable.

While Steem is a social media platform, it views the term “contribution” very broadly. Contribution to the Steem platform can have many forms and is not limited to posts, likes and shares. Different forms of contribution are the reason why Steem platform has two currencies, Steem Token (symbol: STEEM) and Steem Dollar (symbol: SBD). STEEM currency functions just like any other cryptocurrency. You can buy this cryptocurrency at many popular exchanges. Steem Dollar works similarly to conventional convertible notes. Steem Dollar is pegged to the US Dollar. SBD is a way for the Steem platform to accept and reward contributions in the form of debt, as opposed to people buying the STEEM token, which is a contribution in the form of financial ownership.

 

Vested Steem Currency

In addition to these forms, the platform has Steem Power, which is a vested version of STEEM. The term “vesting” comes from the world of stocks and shares. To motivate employees to stay with a company, many businesses, especially startups, award them “vesting options,” meaning that if an employee stays with a company for a certain period of time, he or she will be able to buy company stock at a certain price. If the company is doing well, the price is usually much lower than the stock price, which means that the employee can get significant income in addition to the regular salary. For example, if the employee can buy 100,000 shares at a price of USD$1 per share after working for the company for four years and the price per share at the moment of vesting is USD$4, it means an additional income of $300,000, which is the difference between the market price of 100,000 shares ($4*100,000 shares = $400,000) and vested buying price ($1*100,000 shares = $100,000. Sometimes, shares are vested on an annual basis to motivate employees to stay with a company longer. For example, an employee may get an option to buy 10,000 shares at the price of $1 per share after working for a company for one year, additional 20,000 for the same $1 per share at the end of year two after working for the company for two years and so on. The way vesting works on the Steem network is much simpler than that: After a user on the platform converts STEEM into SP, the platform will only convert the funds back over the duration of 13 weeks, paying the amount in equal installments on a weekly basis.

 

Serving the members

The third principle of the Steemit philosophy is that the main goal of the Steem platform and Steem network is to serve the members of the network. This is the same principle that lies in the foundation of local member-only credit unions, food co-ops and health sharing organizations. The principle is very different from the guiding principle of social media platforms such as Facebook and Twitter.

Both Facebook and Twitter are businesses. The main goal of a business is to increase the value of the business. Facebook and Twitter do so by selling advertising to advertisers. To increase revenues from advertising, they need users on their platforms and they need users to stay on the platforms as long as possible. This is why social media networks work so hard on creating algorithms that will keep users on the platforms. This is not how Steem network operates.

The network provides value to its members in six ways. First, it is a source of curated content. Second, it is a curated community. Third, it allows users to get quality answers to their questions. Fourth, it offers a currency. The fifth way of delivering value is offering free payments. Finally, the Steem platform creates jobs by providing value to its members.

Because the goals of the platform are aligned with economic interests of its members, the platform produces content and services in a fairer way compared to regular social media platforms.