What is STEEMIT and how does it work?

Steemit, a new social media platform where everyone gets paid to post online, has been released in beta.

Background of Steemit

Steemit is a relatively new company, founded in early 2016 by Ned Scott and Daniel Larimer. Ned Scott earlier worked for Gellert Global Group, a family-owned private equity group which holds many North American food companies. Daniel Larimer is the founder of Bitshares, which has the 11th largest market capitalization amongst all cryptocurrencies.

The concept

Steemit is powered by blockchain technology and uses a new cryptocurrency to reward users who upload articles, images, commentary, etc. Other ways users can get paid is through sourcing and up-voting popular content. The earlier a person up-votes a post that becomes popular, the more is the reward. Users are paid half in 'Steem Power' (a vesting currency) and half in Steem Dollars, which can be exchanged for US Dollars.

How is multiple account creation prevented?

One of the banes of rewarding users for posting is that people try to game the system by creating multiple accounts. These accounts can be used to post/vote multiple times and thereby manipulate the popularity of posts.Steemit tries to control this by requiring users to register through their Facebook accounts. Steemit is a content aggregator that rewards users in forms of a new cryptocurrency. Depending on the quality and popularity of a post, or how early a post is upvoted on, users are paid in forms of Steem. Although Steemit may be the most sophisticated and thought-through system to date, the concept of rewarding users for their posts is not entirely new. As early as 2014, sites such as Bubblews and Bonzo Me came out with the idea of paying users for generating content. These sites used Paypal to make payments. Bubblews closed down in November 2015. Taringa, Argentina's largest social networking site, tips users in bitcoins for posting and sharing content. This hasn't led to users migrating in droves from Facebook and other social networking sites. It remains to be seen how successful Steemit is in attracting users.