First of all let me explain you what SteamPower is!
Steem Power
Steem Power MUST be converted to Steem Tokens before you can cash it out. One unit of Steem Power is an IOU for one Steem Token. Because the Steem Blockchain Protocol MUST always give you one Steem Token in exchange for one unit of Steem Power, Steem Power represents equity in the underlying protocol like any cryptocurrency. The more valuable Steem Tokens become, the more valuable your Steem Power becomes. But Steem Power has several additional features which make it superior to rewarding users directly in Steem Tokens.
The first is that the Steem Blockchain Algorithm can leverage a user’s Steem Power to determine how much POWER their vote should have. As I said earlier, 75% of the new tokens created every year are distributed to content creators, but how does the Steem Algorithm determine who gets how much and in a way that people will accept as objectively fair? Not an easy question considering that evaluating the quality of content is entirely subjective.
The Steem Blockchain resolves this issue by crowdsourcing the determination of value. Content is deemed valuable by the blockchain based on how many upvotes it receives and who those upvotes come from. The more Steem Power you have the more rewards are allocated to the content that you upvote. In other words, the people who are most heavily invested in the platform have the most influence over who is rewarded. And yes, upvoting yourself is perfectly fine. In fact, buying Steem Power is one way to accelerate the process of getting your content the attention you feel it deserves.
The other benefit of Steem Power is that it is extremely secure. Like all cryptocurrencies, if someone steals your Steem Tokens, there’s almost nothing anyone can do to get it back to you. Steem Power, on the other hand, can only be converted to Steem Tokens in 13 weekly installments during a process referred to as “powering down.” When you initiate a “power down” your Steem Power isn’t immediately converted into Steem Tokens. Instead, every 7 days 1/13th of your Steem Power is converted into Steem Tokens, which you can then sell on exchanges. The reason the process is called powering down is because as you unload your Steem Power, your influence in the system decreases accordingly since the Steem Blockchain Protocol uses your Steem Power to determine your influence.
Since the process is gradual if your account is hacked and the power down process is initiated by a malicious actor you have plenty of time to regain control over your account by utilizing our industry-first account recovery process and cancelling the power down before much damage has been done.
Now the astute observers among you might have noticed that I only explained where 85% of the newly created Steem Tokens go. The remaining 15% of the new money created goes to paying the holders of Steem Power. It’s basically an interest payment. It’s a small reward for investing in the long term of the platform.
Steem Power
Steem Power, on the other hand, MUST be converted to Steem Tokens before you can cash it out. One unit of Steem Power is an IOU for one Steem Token. Because the Steem Blockchain Protocol MUST always give you one Steem Token in exchange for one unit of Steem Power, Steem Power represents equity in the underlying protocol like any cryptocurrency. The more valuable Steem Tokens become, the more valuable your Steem Power becomes. But Steem Power has several additional features which make it superior to rewarding users directly in Steem Tokens.
The first is that the Steem Blockchain Algorithm can leverage a user’s Steem Power to determine how much POWER their vote should have. As I said earlier, 75% of the new tokens created every year are distributed to content creators, but how does the Steem Algorithm determine who gets how much and in a way that people will accept as objectively fair? Not an easy question considering that evaluating the quality of content is entirely subjective.
The Steem Blockchain resolves this issue by crowdsourcing the determination of value. Content is deemed valuable by the blockchain based on how many upvotes it receives and who those upvotes come from. The more Steem Power you have the more rewards are allocated to the content that you upvote. In other words, the people who are most heavily invested in the platform have the most influence over who is rewarded. And yes, upvoting yourself is perfectly fine. In fact, buying Steem Power is one way to accelerate the process of getting your content the attention you feel it deserves.
The other benefit of Steem Power is that it is extremely secure. Like all cryptocurrencies, if someone steals your Steem Tokens, there’s almost nothing anyone can do to get it back to you. Steem Power, on the other hand, can only be converted to Steem Tokens in 13 weekly installments during a process referred to as “powering down.” When you initiate a “power down” your Steem Power isn’t immediately converted into Steem Tokens. Instead, every 7 days 1/13th of your Steem Power is converted into Steem Tokens, which you can then sell on exchanges. The reason the process is called powering down is because as you unload your Steem Power, your influence in the system decreases accordingly since the Steem Blockchain Protocol uses your Steem Power to determine your influence.
Since the process is gradual if your account is hacked and the power down process is initiated by a malicious actor you have plenty of time to regain control over your account by utilizing our industry-first account recovery process and cancelling the power down before much damage has been done.
Now the astute observers among you might have noticed that I only explained where 85% of the newly created Steem Tokens go. The remaining 15% of the new money created goes to paying the holders of Steem Power. It’s basically an interest payment. It’s a small reward for investing in the long term of the platform.