STEEM powers a bustling social blockchain where posts, votes, and community actions are directly rewarded with native tokens.

    Origins and Historical Context

    Genesis of a Social Blockchain

    Launched in March 2016 by software engineer Daniel Larimer and entrepreneur Ned Scott, the Steem blockchain began as an experiment in aligning online social engagement with permissionless, transparent monetary rewards. Whereas earlier digital communities relied on karma points, likes, or platform-issued gift cards, Steem embedded an economic layer right into the protocol, letting creators and curators earn fungible cryptocurrency for everyday expression.

    From day one the network pledged three-second block times, zero transaction fees, and a delegated proof-of-stake consensus—all daring claims in 2016 that attracted a melting pot of early adopters: privacy advocates, meme historians, rural bloggers, open-source developers, and crypto-curious hobbyists. Within the first year more than 500,000 accounts had registered, proving that social interaction—not high-volume financial transfer—could stretch blockchain throughput in new directions.

    Fact Details
    Launch & Founders Launched in March 2016 by Daniel Larimer and Ned Scott as the first social blockchain rewarding on-chain activity.
    Consensus Mechanism Delegated Proof-of-Stake (DPoS) with 21 active witnesses producing blocks in rotation.
    Block Time Average block interval of 3 seconds, enabling fast transaction finality.
    Transaction Fees Zero fees; network usage governed by regenerating Resource Credits (RC) tied to Steem Power.
    Token Structure STEEM (liquid currency), Steem Power (SP) (vested influence & RC), and Steem Backed Dollar (SBD) (USD-pegged debt token).
    Inflation Schedule Started at 9.5% annual inflation, reducing by 0.01% every 250,000 blocks (~30 days).
    Proof-of-Brain Model Content mining where authors and curators share newly minted tokens based on net upvotes over a 7-day window.
    Tron Acquisition & Hive Fork In February 2020 Tron Foundation acquired Steemit Inc., leading to the community-led Hive hard fork in March 2020.

    The Tron Acquisition and Hive Fork

    The Steem narrative took an unexpected turn in February 2020 when the Tron Foundation, headed by Justin Sun, acquired Steemit Inc.—the private company responsible for maintaining the flagship front-end and holding a sizeable development fund known colloquially as the “ninja-mined stake.” Many longtime contributors feared the purchase would hand disproportionate influence to a single corporate actor, undermining the delegated proof-of-stake power-sharing ethos.

    A rapid succession of governance votes, emergency soft-forks, and social media skirmishes culminated in March 2020 with the birth of Hive—a hard fork led by dissident witnesses who froze the disputed stake and launched a parallel ecosystem. Far from destroying Steem, the split clarified ownership boundaries: Steem retained the Steemit Inc. treasury and a loyal cohort of content creators, while Hive carried away disaffected communities and much of the open-source tooling. The episode served as a high-profile case study in how publicly accessible source code lets communities literally vote with their forks.

    Technical Architecture

    Delegated Proof-of-Stake Consensus

    At the core of Steem’s design is delegated proof-of-stake (DPoS), a consensus mechanism that trades brute-force hashing for representative democracy. Any account may self-nominate as a witness by publishing a signing key and a price feed; STEEM holders then allocate votes (weighted by their Steem Power balances) to preferred candidates.

    The top 20 witnesses plus one rotating standby witness create blocks in deterministic order, each earning a modest block reward denominated in Steem Power. Because DPoS spreads influence across thousands of stakeholders, protocol evolution proceeds via transparent signaling rather than clandestine mining cartels, allowing speedy feature rollouts and constant tuning of inflation parameters without sacrificing throughput or finality.

    Block Production Cycle

    Blocks arrive every three seconds in a 21-slot round: each of the top 20 witnesses signs once, and the standby witness closes the loop. The predictable schedule lets nodes pre-arrange peer-to-peer channels, keeping propagation latency under 200 milliseconds worldwide. Metadata such as price feeds and virtual operations co-travel with user transactions, powering on-chain analytics dashboards and automated interest payouts. Coupled with finely tuned compression, this cadence has kept spam at bay even during viral onboarding waves.

    Resource Credits and Bandwidth

    Instead of gas fees, Steem meters usage through Resource Credits (RC). Each account’s RC balance regenerates linearly over five days, similar to mobile-data rollover. Casting an upvote might cost 30 RC, posting a video link 150 RC. If you run dry, transactions pause until credits regenerate or more Steem Power is delegated. Dynamic RC pricing, based on block size and network load, has proven a durable spam countermeasure, encouraging responsible participation and discouraging bot-nets without burdening humans with micropayments.

    infographic illustrating RC depletion and recharge

    Token Economy

    STEEM, Steem Power, and Steem Dollars

    The Steem economy operates on a tripartite token structure deliberately designed to encourage long-term alignment between users and network health:

    • STEEM — liquid base currency, tradable on exchanges and ideal for peer-to-peer transfers.
    • Steem Power (SP) — vested derivative created when holders power up STEEM; SP grants voting influence, Resource Credits, and enhanced curation rewards. Powering down returns STEEM in 13 weekly installments, curbing sudden sell-offs.
    • Steem Backed Dollar (SBD) — a debt token aimed at one U.S. dollar, convertible to STEEM through the blockchain’s internal market. By pegging many payouts to SBD, authors enjoy relative earnings stability even during wild market swings.

    Think of STEEM as cash, SP as voting equity, and SBD as short-term debt—all moving seamlessly on-chain to create intricate incentive loops like converting SBD into SP when the protocol’s feed price signals over-collateralization.

    Inflation Schedule and Reward Pool

    Steem launched with 9.5% annual inflation, waning by 0.01% every 250,000 blocks (~30 days). Newly minted tokens flow into specific buckets, replenishing the reward pool from which authors, curators, witnesses, and the DAO receive payouts. A typical mid-2025 block divides rewards roughly as follows:

    Allocation Bucket Percentage of Block Reward
    Content & Curation 42.5%
    Witnesses 10%
    Steem DAO 10%
    Liquidity Providers 7.5%
    Account Creation Subsidy 30%

    Because content rewards split 50–50 between authors and curators, the network transforms discovery into a game of predictive taste, encouraging participants to surface hidden gems rather than chase viral clicks.

    Proof-of-Brain Mining Model

    Proof-of-Brain (PoB) is Steem’s signature twist on mining. Once an article goes live, it competes for upvotes during a seven-day window. Each upvote’s weight depends on the voter’s SP and remaining voting mana, while downvotes counterbalance abuse. At payout time the protocol tallies net votes, converts them into reward-share units, and distributes newly minted STEEM and SBD. Curators earn by identifying quality early; authors profit from producing it. The mechanism gamifies human intellect, replacing noisy hardware rigs with quiet cognitive labor.

    flowchart illustrating how Steem’s Proof-of-Brain rewards

    Governance and Community

    Witness Elections and Voting Dynamics

    Witness campaigns resemble grassroots political races. Candidates publish manifestos detailing hardware specs, upgrade policies, and community philanthropy. Voters assess reliability (missed-block statistics), philosophical stances on censorship, and contributions such as free public APIs. Coalitions form around regional language support or shared values, yet each voter can allocate 30 witness votes, fostering nuanced power-sharing rather than winner-take-all polarization.

    Proposal System and Funding for Development

    The Steem DAO funnels 10% of every block reward into a perpetual treasury. Anyone may submit a proposal with milestones and budget. When net yes-votes exceed the pass threshold, funds stream automatically until completion or cancellation. Over 120 projects have been financed: mobile wallets, Ledger hardware-wallet apps, language localization sprints, even real-world tree-planting programs that log proof-of-growth photos on-chain.

    Applications and Ecosystem

    Steemit.com: The Flagship dApp

    Steemit.com remains the primary on-ramp, averaging three million visits per month in 2025. The interface blends Reddit-style feeds with Medium-like article pages; key balances, voting mana, and pending payouts display in real time, demystifying on-chain finance for newcomers. Behind the scenes, each click broadcasts signed JSON to public nodes, immediately immutably timestamping the action.

    Third-Party dApps and Integrations

    The open account layer has spawned specialized dApps:

    • Ecency — gamified mobile client with streak rewards and built-in token swaps.
    • D.Tube — decentralized video hosting marrying IPFS storage to Steem metadata.
    • Splinterlands — play-to-earn trading-card game; battle results timestamp on Steem for provable fairness.
    • SteemPress — WordPress plugin that mirrors posts and funnels blockchain payouts back to standalone blogs.

    All share one key-pair login, eliminating silo fatigue common in Web2.

    Bridging to Web2 and Beyond

    Interoperability soared after Wrapped STEEM (wSTEEM) launched on Ethereum and BNB Chain, unlocking DeFi liquidity pools and collateralized lending. Traditional websites now embed Steem comment threads via iframe, with instant tipping. A South Korean ed-tech firm rewards course-completion badges in token form, using Steem’s fee-less micro-payouts to keep learners motivated.

    Steem blockchain interoperates with Ethereum via a bidirectional bridge

    Network Performance and Security

    Throughput, Latency, and Scalability

    April 2025 benchmarks by witness collective BlockTrades sustained 10,000 transactions per second in replay tests on commodity hardware. Compression upgrades in Hard Fork 27 sliced average block size by 18%, keeping the full ledger under 650 GB. Because operations are type-restricted, Steem sidesteps unbounded smart-contract risk, enabling lightweight archival nodes on modest VPS instances.

    Security Model and Attack Surfaces

    Critics note that fewer than two dozen witnesses could collude. Economic incentives partially mitigate the threat: those witnesses collectively hold billions in SP, value that would evaporate if trust collapsed. Steem also features three-day reversible owner authority; if an attacker steals a posting key, the rightful owner can rotate keys via the higher-level owner authority before funds are lost. The only chain halt—caused by a database inconsistency in 2017—was resolved within three hours, demonstrating agile coordination among witnesses.

    Comparative Analysis

    STEEM vs Hive vs Lens

    Competition clarifies strengths. The snapshot below juxtaposes Steem with Hive (its ideological sibling) and Lens Protocol (built atop Polygon):

    Metric STEEM Hive Lens (Polygon)
    Consensus DPoS (21 witnesses) DPoS (30 witnesses) PoS (100+ validators)
    Block Time 3 sec 3 sec ≈2 sec
    Transaction Fees None (RC-based) None <0.001 MATIC
    Reward Logic Proof-of-Brain mining Proof-of-Brain NFT & token gating
    Daily On-Chain Actions ≈350k ≈190k ≈25k
    Total Accounts 1.7 million 0.9 million 0.15 million
    Smart-Contract Scope Custom JSON only Custom JSON Full EVM

    Fee-less interaction keeps Steem attractive for text-heavy social apps, while EVM flexibility gives Lens broader composability. Builders must weigh frictionless onboarding against contract versatility.

    Developer Experience

    APIs and SDKs

    Public RPC nodes expose condenser_api and database_api over HTTP and WebSocket. JavaScript’s steem-js and Python’s beem libraries simplify key handling and transaction signing. Because read-only queries require no authentication, data scientists can ingest the full historical firehose for sentiment analysis. Write operations sign client-side with Posting, Active, or Owner keys, each scoped for least-privilege safety.

    Smart Media Tokens

    Smart Media Tokens (SMTs) hit public testnet in late 2024. Communities can now spin up native coins with built-in curation reward curves, linear or exponential inflation, and optional shared RC pools. Early pilots include Focus (photography) and EduToken (online learning). Because SMT logic resides inside protocol parameters rather than arbitrary bytecode, audit risk plummets while transfers remain fee-less.

    Practical Guide to Onboarding

    Creating an Account

    Most newcomers register via Steemit or Ecency, receiving four key pairs in a single master password: Owner, Active, Posting, and Memo. The service delegates roughly 10 SP to cover initial RC needs. Power users can run cli_wallet and pay a three-STEEM fee for fully self-custodied creation.

    Earning, Powering Up, and Transacting

    Start with substantive comments; curators reward quality discussion. Powering up early STEEM amplifies future influence, compounding returns similar to dividend reinvestment. Transfers settle in one block and support encrypted memos for invoices or personal notes. Popular ramps in 2025 include Upbit, Binance, and the wSTEEM bridge on Uniswap v3.

    Managing Keys and Security

    Follow the hierarchy: Posting for daily use, Active for wallet operations, Owner for cold storage. The community-funded Ledger Nano app (released 2024) and the Steem Keychain browser extension—with secure enclave support—have raised the bar on user security, placing Steem on par with major DeFi platforms.

    Glossary of Core Terms

    Term Brief Explanation
    Witness Elected block producer responsible for validating transactions and updating protocol parameters.
    Steem Power (SP) Vested STEEM that confers voting influence and Resource Credits.
    Resource Credits (RC) Regenerating bandwidth units that govern fee-less operations.
    Proof-of-Brain Content-based mining where authors and curators share inflation rewards.
    Hard Fork Protocol upgrade requiring witness consensus; incompatible versions create separate chains.
    DPoS Delegated Proof-of-Stake; consensus via stakeholder-elected validators.
    Steem DAO On-chain treasury funding community proposals through stake-weighted voting.

     

    STEEM Social Blockchain FAQ

    What is STEEM and how does it differ from traditional social platforms?
    STEEM is a social blockchain where users earn native tokens for posting, voting, and curating content. Unlike platforms that reward engagement with points or badges, STEEM’s rewards are fungible and tradeable cryptocurrency. Every post, comment, and vote is immutably recorded, with economic incentives embedded at the protocol level. With fee-less transactions and three-second block times, STEEM provides a permissionless, transparent alternative to ad-driven social media, empowering creators and curators worldwide.
    How does the delegated proof-of-stake (DPoS) system work on STEEM?
    STEEM uses delegated proof-of-stake (DPoS), allowing token holders to elect 21 witnesses who rotate producing blocks every three seconds. Votes are weighted by Steem Power (SP) balances, meaning the more SP you have, the more influence you wield. DPoS enables rapid block times, reduces energy usage, and ensures that protocol changes reflect broad community input. Witnesses compete based on reliability, transparency, and community service rather than pure hash power.
    What is the token structure of STEEM, and what are its main components?
    STEEM has a tripartite token system:

    • STEEM: Liquid base token, tradable and used for transfers.
    • Steem Power (SP): Vested STEEM granting voting influence, bandwidth (Resource Credits), and curation rewards. Powering down returns STEEM over 13 weeks.
    • Steem Backed Dollar (SBD): USD-pegged debt token for stable payouts and peer-to-peer commerce.

    This design creates complex incentive loops and long-term network alignment, rewarding both activity and commitment.

    How are Resource Credits (RC) used instead of fees on STEEM?
    Instead of gas or transaction fees, STEEM employs Resource Credits (RC). Every account holds RC proportional to its SP balance. Actions like posting or voting consume RC, which then regenerate over five days. If you run out, you must wait or get delegated more SP. RC makes transactions free for real users, deters spam, and allows sustainable scaling without micro-payments, making STEEM ideal for high-volume social activity and onboarding newcomers.
    What is Proof-of-Brain (PoB) mining and how are content rewards distributed?
    Proof-of-Brain is STEEM’s content mining mechanism. When you publish content, it enters a seven-day voting window. Upvotes, weighted by voter SP, generate a share of newly minted STEEM and SBD from the reward pool. Rewards split 50/50 between authors and curators who discover quality early. Downvotes reduce rewards and counter abuse. The system gamifies creativity, replacing mining rigs with human intellect and rewarding participation based on community judgment.
    What happened during the Tron acquisition and the Hive hard fork?
    In February 2020, the Tron Foundation acquired Steemit Inc., sparking concerns over centralization due to the “ninja-mined stake.” The community responded with emergency votes and eventually created Hive, a forked blockchain. Hive froze the disputed stake and carried away many developers and users, while STEEM retained Steemit Inc. and loyalists. This episode highlights how open-source blockchains can “vote with their forks,” ensuring community agency and clarifying ownership boundaries.
    What are some flagship dApps and third-party apps in the STEEM ecosystem?
    STEEM supports a robust app ecosystem:

    • Steemit.com: The primary content hub for blogging and curation.
    • Ecency: Gamified mobile app with token swaps and streaks.
    • D.Tube: Decentralized video hosting using IPFS.
    • Splinterlands: Play-to-earn card game recording results on-chain.
    • SteemPress: WordPress plugin for blockchain-powered blogs.

    Unified login and fee-less actions encourage experimentation, while integrations with Web2 (such as wSTEEM on Ethereum and BNB Chain) bridge STEEM to DeFi and beyond.

    How does the STEEM governance and funding system operate?
    Governance combines witness elections and the Steem DAO. Anyone may run for witness, and users allocate up to 30 votes, encouraging decentralized oversight. The DAO, funded by 10% of block rewards, backs proposals for development, education, and public goods. When net stakeholder votes meet the threshold, funding streams automatically. This enables continual upgrades and a diversity of community-led projects, all transparently tracked on-chain.
    What are the main security features and best practices for STEEM account management?
    STEEM accounts have four key pairs (Owner, Active, Posting, Memo), each with specific permissions. Best practices:

    • Use Posting for daily interactions.
    • Active for wallet and power-up operations.
    • Owner for cold storage and recovery only.

    The Steem Keychain extension and Ledger Nano app increase security with encrypted key storage. Three-day reversible owner authority provides a critical window for recovering compromised accounts, enhancing user safety over traditional platforms.

    How does STEEM compare to other social blockchains like Hive and Lens Protocol?
    STEEM, Hive, and Lens each have unique strengths. STEEM and Hive both use DPoS with near-instant, fee-less transactions—making them optimal for social and gaming apps. Lens, built on Polygon, leverages full EVM smart contracts and token/NFT gating but charges minimal fees. While STEEM remains highly scalable with dedicated content mining, Hive emphasizes open-source governance, and Lens prioritizes composability. Choice depends on developer needs and desired user experience.
    This article is provided for informational purposes only and is not intended as investment advice. The content does not constitute a recommendation to buy, sell, or hold any securities or financial instruments. Readers should conduct their own research and consult with financial advisors before making investment decisions. The information presented may not be current and could become outdated.

    Jake Simmons was the former founder and managing partner at CNF. He has been a crypto enthusiast since 2016, and since hearing about Bitcoin and blockchain technology, he has been involved with the subject every day. Prior to Crypto News Flash, Jake studied computer science and worked for 2 years for a startup in the blockchain sector. Business Email: [email protected] Phone: +49 160 92211628