STEEM powers the platform, it determines how strong your vote is for posts and witnesses. When you do a post, half your rewards are paid out in STEEM and half in SBD (STEEM Backed Dollars). SBD are supposed to be pegged to the US Dollar, but recently there has been a surge of dumb money buying SBD at 10-13x the peg.
When you sell your SBD on Bittrex for Bitcoin and buy STEEM with that Bitcoin, you are taking Bitcoin from outside the platform and investing it in STEEM -> boosting the amount of money flowing round the platform. Where as if you just sell your SBD on the internal market, no new money is coming in XD
The higher the price of STEEM, the more post rewards you get for each post. What you will notice is your pending posts will go up and down in value with the price of STEEM.
Great response, thank you so much for taking the time to post it. I just checked Bittrex too and see that both SBD and Steem are at relative lows with a steep plunges in the last day. This is all very interesting, and I think long term STEEM will have staying power and intrinsic value as this blogging platform is a genuinely valuable thing underlying the STEEM. I am not sure of the value in the technology underlying many other alt coins...
Actually mate there is something not good going on ... when I saw STEEM and EOS down this morning, I assumed Bitcoin was up ... nope ... Bitcoin down ie money leaving crypto -> market cap shrinking :(
Giving this comment some upvote love as it's one of the most succinct and educational descriptions of the ecosystem that I've seen in a while. Many would benefit from reading this comment alone, especially those new to the platform.
Hahaha thanks mate :D
Thanks for the quick barebones rundown. Due to my forgetful nature I shall screenshot your helpful post and make it into wallpaper until such time as it sticks in my head.
Why'd you get flagged?
I made an off colour remark somewhere else, offense was taken, and I've been hounded since.
This sums up what happened if you're interested. Or not.
https://steemit.com/new/@freetrog/the-6-dogmen-of-my-flagpocalypse
(You'll have to toggle through "reveal comments". Lol)