So do you somehow make more steem the more steem you have? Is that how it works? Can someone please help me understand how this works?
That would be considered a Ponzi scheme 
Amount of steem doesn't impact how much you will earn. You can power up with that steem and get a higher voting power, but the downside is you won't be able to power down for another 2 years after powering up.
Not true though..
Powering down is only like 9 weeks. The 2 year power down was changed about 6 months ago.
But overall I think that the platform is just not evolving. New members aren't welcomed and still takes from some days to some weeks just to get in. And after getting in, they realize that they can't earn more than a few cents even if their blog is of high quality. The only way to earn here is via investing in Steem power or making strong network connections. This is not a place for anyone who is looking for free money. But yes, if you like do blogging anyways, then you can surely opt for Steemit as you can find a lot of people who share same interest as yours.