Steemit Bridges Blockchain and Social Media, But How Does It Work?

In the case of Steem Power, should a user want to convert back to the base currency of Steem, it will need to occur in 104 weekly conversions.

"[This is] the blockchain telling the holders of Steem Dollars that, at any point in the future, the blockchain will convert their Steem Dollars into a dollar's worth of Steem after a seven day conversion process.

If the Steem Dollars were convertible to Steem immediately, a user could take advantage of a difference in price, convert their Steem Dollars into regular Steem and earn more than the $1 worth the smart contract intended for it.

If Steem is worth $1 and this conversion took place, the individual would receive 1 Steem for every Steem Dollar they owned.

If Steem rose to $2, the individual would receive 0.5 Steem for every Steem Dollar they owned.

At time of story, users that hold Steem Dollars will earn 10% a year in interest, paid out in Steem Dollars.

If one user had 1,000 Steem Power and another had 10,000 Steem Power, it's clear that the latter has a more powerful account than the former.

If a post does well, you earn more Steem Power than if a post doesn't do well, thus incentivizing you to only vote for content that you believe is high quality.

The reward, denominated in US dollars, is released to the writer divided evenly between Steem Power and Steem Dollars.

Disclosure: The author posted several articles on Steemit in conjunction with writing the report, for which he earned $2,400 in Steem.