Your guide to STEEM tokens, how they work and how to buy them in Australia.
STEEM is the base token of Steemit, a blockchain-based social media platform that allows publishers and creators to monetise their content. This digital currency is used to reward writers when their content gets upvoted and to reward those users who participate in the platform and upvote other people’s content.
To find out more about the STEEM token, including how to buy and sell it, check out this handy guide. We’ll also cover how the Steemit platform works as well as the things you should consider before buying any STEEM.
Where to buy STEEM
You can buy STEEM tokens on several exchanges, using cryptocurrencies such as bitcoin (BTC) or Ether (ETH). You can also buy STEEM using fiat currency such as Australian dollars or directly from your Steemit.com account.
The following are some of the exchanges that list STEEM:
A step-by-step guide to buying STEEM
If you want to buy STEEM tokens, here’s an example of how to do it.
Step 1. Create an account at an exchange that offers STEEM
Compare the exchanges that list STEEM and create an account at the one that best suits your needs. For example, Australian-based exchange CoinSpot allows you to buy STEEM with Australian dollars (AUD), but you’ll first need to register and provide your personal details and proof of ID to verify your account.
We also recommend that you enable two-factor authentication on your account to provide extra protection for your funds.
Step 2. Deposit funds into your account
Most crypto exchanges only accept cryptocurrency deposits. As BTC is one of the most popular cryptocurrencies and is a common pairing for other coins or tokens, you can use BTC to buy less common cryptocurrencies such as STEEM. If you don't have BTC, you can follow our guide on how to purchase it.
Once you have acquired BTC, log in to your account and look for a button that says “Balance”, “Funds” or “Deposits”. You can then copy the wallet address and transfer the necessary funds.
Some exchanges, such as CoinSpot, allow you to deposit fiat currencies. If you are using CoinSpot, once you’ve logged into your account, click the “Deposit AUD” button from your account dashboard and select the amount of AUD you wish to deposit.
Step 3. Buying STEEM
Click through to the “Exchange” or “Markets” section of your trading platform and search for the STEEM currency pairing you want to trade. Click on “Buy STEEM” and enter the number of STEEM tokens you wish to purchase.
For example, if you’re using CoinSpot, click on the “Buy/Sell” button and type “STEEM” in the search tab. You can then buy STEEM by either entering the number of tokens you want to buy or by entering the amount of AUD you are willing to spend. Review the full details of the transaction, including the fee that applies, before clicking “Buy”.
How to sell STEEM
You can sell STEEM tokens by following a similar process to the one outlined above. After navigating to the platform’s “Markets” or “Exchange” section, search for your desired currency pair, click on “Sell” and then enter your transaction details. However, remember that exchanges don’t list every possible currency pairing, so it may not be possible to directly exchange STEEM for the currency you want.
Which wallets can I use to hold STEEM?
You can use three types of wallets to store your STEEM tokens:
- Web-based STEEM wallet. Steemit.com is the direct link to the Steem blockchain, and you can use it to store your STEEM tokens. The Steemit.com wallet has a recovery feature designed to offer a layer of protection in case your account has been compromised.
- Desktop wallets. Steem’s original wallet is a Command Line Interface (CLI) wallet, designed for technical users. Another STEEM desktop wallet is Vessel.
- Mobile wallets. Freewallet and eSteem are two STEEM wallets available for mobile devices.
How does STEEM work?
Founded in 2016 by Ned Scott and BitShares creator Dan Larimer, the Steem blockchain is described as a “rewards platform for publishers to monetise content and grow community.”
The Steem blockchain powers native digital assets known as Smart Media Tokens (SMTs), which are the network’s native digital assets. Designed for digital content businesses, SMTs can be used to help monetise online content and create incentives for users to behave appropriately. They feature a rewards algorithm that encourages platform users to create and curate content, with tokens distributed according to upvotes and likes.
Steemit runs on the Steem blockchain and was developed with the aim of creating a social content platform similar in many ways to Reddit, but using blockchain. It allows users to create and share content, and other users rate this content by liking and upvoting. Based on the likes and upvotes a piece of content receives, the network will reward the content creator with Steem Power and Steem Dollars.
The Steemit platform has three types of tokens:
- Steem (STEEM). This is the base currency of the platform and can be bought and sold on the open market. New STEEM units are developed by the Steemit platform every day and automatically distributed to content creators and platform participants.
- Steem Dollars (SBD). This currency is pegged to the US dollar and when a user creates popular content, they can choose to receive 50% of their payment in Steem Dollars.
- Steem Power. Steem Power is STEEM tokens that have been vested, which means they can’t be sold for 13 weeks. Holding Steem Power entitles you to a proportionate ownership in the network, and the more Steem Power a user has, the more influence they have over the value of the content upvoted or created.
What to consider before buying STEEM
Cryptocurrencies are highly volatile and speculative, and you should understand the risks involved in purchasing them before you buy. Consider the following factors if you’re thinking of buying STEEM tokens:
- Supply. According to CoinMarketCap, the circulating supply of STEEM tokens at the time of writing (11 April 2018) was 256,157,558 out of a total supply of 273,131,652. Starting from December 2016, Steem began creating new tokens at an inflation rate of 9.5% for the first year. For every consecutive year, the inflation rate will drop by 0.5% until it reaches 0.95% inflation.
- STEEM use. You can use STEEM tokens to increase your curating power within the Steemit.com network or trade it with other cryptocurrencies at an exchange.
- Powering up. You can increase your Steem Power with STEEM tokens by powering up. While the user is powered up, the STEEM tokens are locked. Once a user decides to redeem their STEEM tokens, they need to power down and their tokens will be unlocked in a period of three months.
- Availability. STEEM tokens are available on a handful of exchanges. However, it’s worth staying up to date with any news of additional exchanges listing the token as this could increase ease of access and therefore potentially cause a growth in demand.
- Market competition. It’s also worth considering whether there are any similar projects in competition with Steem that could affect demand for the STEEM token. Projects to watch include Akasha, Synereo, LBRY and YOYOW.
By considering these and other factors, you’ll be able to form a clearer picture about whether you should buy any STEEM.
Frequently asked questions