All three currencies in Steem fall under the umbrella of Steem Tokens. All three types of Steem Tokens perform a vital role in the Steem ecosystem. They are:
STEEM - The most liquid form of currency in the platform. It should only be held for short-term trading because you will be diluted 50% per year due to ever-increasing supply. You may convert STEEM into Steem Power, Steem Dollars, or another currency altogether.
Steem Power - Having Steem Power is similar to owning shares in a company. It is a measurement of how much influence you have on the platform and determines how much your vote is worth. It is important to note, when you decide to cash out your Steem Power (Power Down), you will get paid equal payments of STEEM for the next 104 weeks, taking two years to cash out your Steem Power completely.
Steem Dollars - A smart contract promising you will get about $1 USD worth of Steem at the current market price. One Steem Dollar is always worth around One US Dollar, although it can vary a little. Steem Dollars must be turned into STEEM before they can be “Powered Up” into Steem Power. You may also convert Steem Dollars to another currency outside the Steem economy.