How does STEEM Cryptocurrency work?
STEEM is the name of the cryptocurrency offered by by Steem, a scalable bloackchain protocol. Steem provides one of the most social and the smartest cryptocurrency platforms in the world. The platform offers a very unique feature never experienced in any other cryptocurrency. This unique feature is referred to as the proof of brain.
What is “proof of brain”?
Does it really mean that users have to seriously use their brains to bet money in Steem? Somehow yes!
The “proof of brain” is actually designed I a way that it encourages users to create and take care of content more so the tokens.
It is a combination of two features: the rewards pool and a trading system which uses a voting method where tokens are staked so that it can be easier to determine the amount of reward.
Rewards pool: what is it?
This is a kind of a pool used by the miners of Steem. It is distributed to those valued Steem miners.
First of all, it is important to understand that Steem uses Delegated Proof of Stake (DPoS) for mining rather than using the Proof of Works (PoW), which is normally used by most cryptocurrency miners. This means there is one block mined in every 3 second and this rate is fixed (doesn’t change like is the case with mining using PoW).
After the STEEM blocks are mined, they are distributed to the users of the platform as per the set rules. These users include the miners, witnesses, and owners. If you are careful you will not that this is different to those Cryptocurrencies which are mined using the PoW since the generated blocks are usually randomly distributed.
During mining, the rate at which new tokens are processed is set at 9.5% per year and it was set in December, 2016. The rate, however, decreases by 0.01% after every 250,000 blocks are generated which roughly translates to 0.5% every year.
Now, here is where the rewards pool comes in: out of the overall generated tokens 75% of them are rewarded to the miners, 15% are rewarded to the holders while the witnesses get 10%.
Any benefits of using staked token blocks?
A stake can either be bought or earned. And in Steem, one token translates to only one vote. Therefore, even owning multiple accounts doesn’t guarantee you more rewards since at the end only the number of tokens you release into the account measured by the amount of tokens remaining in your account.
This in a way brings fairness into the mining process. No wonder the Steem is referred to as a “smart” cryptocurrency.
The market capitalization as per 18th January, 2018 was $1,100,286,762 USD equivalent to 93,790 BTC with a circulating supply of 247,420,028 STEEM out of the total supply of 264,394,122 STEEM.
The supply makes this cryptocurrency one of the digital currencies with the most tokens available in the market.
One token of Steem is going for $4.45 USD, which is after the slight decline in the prices after the digital coin hit its all-time high of 8.43 on 3rd January, 2018. STEEM price experienced the largest market movement in December 2017, rising by more than $7 USD.