What are steam gems?

The author was referring to the steam holiday gems.

They are a new feature (released yesterday) in which a steam user can turn their extra junk cards/backgrounds/emotes into "gems." These gems can be used to buy more cards; or, during the upcoming holiday event only, to bid on games.

Gems themselves are not tradable, but they can be packed/unpacked into "gem sacks" which represent 1000 gems, and are both tradable and marketable.

According to the FAQ, you will keep your remaining gems after the holiday event, and can continue to use them to create more cards.

How does the auction work?

Once the auction starts every 45 minutes the next highest bid will be displayed and if the person is still highest they get the copy. So every 45 minutes is a copy given away to highest bider.

The first auction lasts until December 15th (about 2 days). And not 45 minutes. Steam even says so on the auction-front-page.

Then each auction after that lasts only 45 minutes each. And after each 45 minutes the highest bidder in line gets the game (eliminating the highest that won it in the previous 45 minutes).

Gem auctions = expensive:

With the increase in emoticon/card/etc. prices it's no longer worth it buying them to turn them into gems. Instead hunt for the game cheaper on the humble bundle (has winter sales right now) and other sites that sell Steam Keys which sell them for 50-90% cheaper than you can do with gems. For some reason most games got overpriced (at least for the first auction).

Perhaps the next auctions will make more sense after all the rich people get their copies, the people who had too many useless stuff in their inventory and the traders are gone. I saw some games (converted to gem value) going for over 300% of the regular price, which is just nuts.

Example:

Rogue Legacy costs 1,99 on Humble Bundle right now. But on Steam it costs 11000+ gems. One emoticon is roughly 8 cent and is worth 80 gems. (11000/80)x8/100=11,- bucks. So it's more than 500% more expensive when buying through gems (unless you want to get rid of your useless gems). I also noticed that Steam secretly increased the gem value over night. Those same emoticons were worth 6-20 gems last night. Now they are 80. I suppose they attempted to deflate the economy a bit because a lot of traders inflated the prices from 2 cent to 8 overnight and attempted to buy the games really cheap. Alternatively they just randomize the prices for emoticons every day (not sure) to prevent certain trading schemes.

Creating Gems:

Anyway, once it does start (already started now). Just go to your inventory. Click on a card/emoticon/etc. And on the bottom right it will tell you how many gems this is worth along with a button to convert them.