If you’re frustrated with how complicated the Steem wallet feels, I can relate. But I promise it’s more straightforward than it seems at first. Let’s take a look at the difference between STEEM, SP, and SBD to get this all sorted out. 🙂
STEEM
STEEM is the base cryptocurrency of the Steem blockchain. Similar to Bitcoin it can be bought and sold on exchanges, which create the price through supply and demand.
Steem Power (SP)
You can think of Steem Power as STEEM stored in a different folder within your Steem account. STEEM can be transferred into this folder by “powering it up.” By increasing your SP, you’re increasing your influence in the Steem network. This just means that you can influence how rewards are distributed with your upvote.
When you upvote a post or comment, you’re basically just telling the Steem network to give a certain amount of Steem to the author. The more SP you have, the more influence you have, so the more Steem will be handed over.
STEEM in your SP folder is less liquid though. If you want to withdraw it — called powering down — it will take 13 weeks, whereby each week 1/13th of the SP you withdraw is returned to your liquid STEEM balance.
Steem Dollars (SBD)
SBD stands for Steem Blockchain Dollar, but you’ll often see SBDs referred to as Steem Dollars. They’re designed to be a stable cryptocurrency that is pegged to the US dollar, which makes them easier to work with as a means of exchange for goods or services, or as a shelter from volatility in the market.
At the time I’m recording this, SBDs are worth about $2.50, and a few months ago they were worth even more than that. This is because SBDs were designed with a way to keep them from dipping too far below one dollar, but without anything to stop them from being worth more than that. There is currently talk within the community to impose the upper limit on the peg, but for now the price will continue to fluctuate.
Currently, Steem Dollars can be converted directly into STEEM via a process that takes 3.5 days. You get one US dollar worth of STEEM for every SBD. Actually this option is disabled right now on Steemit.com because of the high value of SBDs, but it is an option that is built into the blockchain.
To enforce the upper limit on the peg, the Steem team could implement an option that also allows STEEM to be converted into SBDs, where you receive one SBD for each US dollar worth of STEEM that is converted.
Summary
So think of the Steem wallet as having three main folders. The first one holds your liquid STEEM, which is the base cryptocurrency of the network and can be bought and sold whenever you’d like. The second one is for SP, which is just STEEM that affects your influence. Unlike liquid STEEM, it takes 13 weeks to withdraw. The third folder holds SBDs, which are tokens designed to be pegged to the US dollar.
Hopefully this video helped clear things up. If not, keep in mind that it might just take some time for the concepts to sink in before they make sense — just give it some time. 🙂
Thanks so much for watching, and please let me know in the comments if you have any questions!
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