The project was founded in 2016 by Ned Scott and Dan Larimer, creator of BitShares.

The two are founders of the Steemit Inc. company, which runs the Steemit website and funds ongoing development of the platform. On March 15, 2017, Larimer announced his resignation from the company.

The idea was described in a whitepaper released in March 2016.The general concept is similar to other blogging websites or social news websites like Reddit, but the text content is saved in a blockchain. Using a blockchain enables rewarding comments and posts with secure tokens of value. Images can be uploaded and hosted on Steemit. Other multimedia content must be embedded from other web hosts. For formatting, there is a WYSIWYG editor. Users can also opt to use Markdown formatting with HTML elements.User accounts can upvote posts and comments, and the authors who get upvoted can receive a monetary reward in a cryptocurrency token named STEEM and US dollar-pegged tokens called Steem Dollars. People are also rewarded for curating (discovering) popular content. Curating involves voting comments and post submissions. Vote strength and curation rewards are influenced by the amount of STEEM Power held by the voter.Steemit has a reputation system, where new accounts start with a reputation of 25. An account's received votes can influence its reputation up and down, incentivizing online etiquette and interaction with the community.

As of May 2017, there are more than 170,000 Steem accounts. After an initial public beta for which no payments were made, the hard fork on July 4th, 2016, saw $1,300,000 of STEEM and Steem Dollars paid out to Steemit users.The exchange rate of STEEM compared to Bitcoin rose continuously during July 2016, peaking at a price of over 4 US dollars.In most of July 2016, Steem had the third largest market capitalization of all cryptocurrencies monitored by the website Coinmarketcap.com, reaching a first notable peak at July 20th, with about 405 million US dollars.As of May 25th, 2016, its market cap is 258 million US dollars.Steemit was described as a novel and "disruptive blockchain-based media community" by Adam Hayes (Investopedia) in July 2016.It got media coverage in cryptocurrency- and business-related media.Author Neil Strauss, a Steemit member, wrote an article for Rolling Stone calling its reward distribution "particularly clever" and echoing the sentiment of its disruptive potential.