From The Steem Bluepaper <-- Read this!

Steem Blockchain Dollars (SBD)

"Many users who are introduced to cryptocurrency struggle to comprehend how “magic internet tokens” awarded by the platform can actually have real world value. In order to help bridge the gap between more traditional fiat money systems which mainstream users are used to, and the cryptocurrency tokens which they are awarded through the platform, a new currency called Steem Blockchain Dollars (SBD) was created."

SBD tokens are designed to be pegged closely to one USD, so that users who receive them can know approximately how much they are worth in “real dollar” terms. SBD tokens also offer a relatively stable currency for users to hold if they are looking to preserve their account value relative to USD. "

A Steem Sorcerer

Different from PoW-only cryptocurrencies, tokens in Steem are generated at a fixed rate of one block every three seconds.

"These tokens get distributed to various actors in the system based on the defined rules of the blockchain. These actors, such as content creators, witnesses, and curators, compete in specialized ways for the tokens. Unlike the traditional PoW means of distribution, where miners are competing over raw computing power, the actors in the Steem network are incentivized to compete in ways that add value to the network."

"The rate that new tokens are generated was set to 9.5% per year starting in December 2016, and decreases at a rate of 0.01% every 250,000 blocks, or about 0.5% per year. The inflation will continue decreasing at this rate until it reaches 0.95%, after a period of approximately 20.5 years. Of the supply of new tokens created by the Steem blockchain every year, 75% of those tokens compose the “rewards pool” which are distributed to content creators and content curators. 15% are distributed to vested token holders, and 10% are distributed to Witnesses, the block producers cooperating inside Steem’s DPoS consensus protocol."

Promote Steemit by printing this poster! (B&W)

Conclusion

"The unique rewards and incentive program offered by the Steem blockchain and token are designed to make Steem the ultimate on-ramp into cryptocurrency for mainstream users. The performance of the blockchain is designed with widespread mass adoption of the currency and platform in mind. When combined with the lightning fast processing times and fee-less transactions, Steem is positioned to become one of the leading blockchain technologies used by people around the world."