I like to join up somewhat unrelated events and see if there is a unifying narrative. Last night, a few things happened in chat and on platform that pointed to what many have been saying all along. My aim for these is to give some ideas about the platform and Steem to consider for their future here. Hopefully, it will help some develop a better plan and support their success.
Convo 1: Payouts
It seems, that many do not understand the basics of how the payout works and someone mentioned this again not understanding the 50/50 Split. Considering this is a pretty big part of the platform and why many are here, let's take a very brief look. I am going to use whole numbers to make things easy and a little poetic licence.
Imagine you have a 20 dollar payout after the curation portion is removed and you chose a 50/50 split. That means 10/10, 10 SBD/ the rest in Steem Power. This does not mean 10 Steem but is calculated on the Steem price (about a 3.5 day market average). The SBD is always counted as 1 dollar by the system.
So, if the 3.5 day average for Steem was 1 dollar US, you would in fact get 10 Steem to go into your Steem Power bank (your voting power comes from here).
You will get 10 SBD + 10 Steem Power on a 20 dollar payout.
But, if the Steem average price is 2 dollars US, the Steem Power portion reflects it. That means on the 20 dollar payout:
10 SBD + 5 Steem.
If Steem average price is 5 dollars:
10 SBD + 2 Steem
If Steem price is 100 dollars (Yay right?):
10 SBD + 0.1 Steem
See how it basically works? The higher the price of Steem, the less you will get in your payouts. This is also when you go 100% Power Up. If Steem is 1 dollar US, a 20 dollar payout is 20 Steem, but at 100 dollar Steem it will be 0.2 Steem.
How soon do you want Steem to hit 100? How big is your wallet now? How much Steem are you collecting? How much of the SBD portion did you convert to Steem?
Now, because SBD prices are not pegged at 1 dollar US, they have an actual market value (Currently about 8 US). That means the 10 dollars of SBD you got in the payout has a real-world value of 80 dollars US. Fantastically awesome and many people have taken full advantage of the prices and taken them all to market, to buy a fat pig.
At one point, it was possible on the internal market to convert at a ratio of 1 SBD:11 Steem. Those days are gone and the ratio is now about 1:1.2. How many changed significant amounts of their SBD to Steem when the ratio was brilliant?
This ratio reduction is because Steem has also been increasing in price and as they excitedly take the SBD, their Steem Power is gathering less and less Steem which means, in the future, they have a very limited influence on the platform as it is the SP that gives the weight. Does this matter?
Well, SBD prices aren't likely to last forever which means in the a future of high Steem prices, curation is going to be an important revenue stream for many. With only dust in the Steem Power account though, there is little influence available.
Now, one can always buy into Steem with the returns they made on taking the SBD to market. As long as they made returns above the growth of the Steem price, this will work out 'OK' but, Steem has grown about 300 (up to 400) percent in the last month and if the SBD prices drop back and the tap turns off, how many can buy in without a 'loss'? These things are something to think about.
The other thing to consider is that when the ratio was 1:11, 1 SBD had a value of 22 dollars. Wow!! The 11 Steem that could have been bought had a 22 dollar value too, but now has a value of about 66 dollars. If you took the SBD to market, you would have to go 3x on your investments with it in the last month to get the same return. How are you doing?
Another thing that was mentioned along these lines was from a new user was 'I am poor and need the money'. He had joined two weeks ago. He was poor before Steemit too right? Converting any SBD he got to fiat is a positive gain and helps, but converting ALL means that his future influence on the platform is more restricted. I do understand financial struggle well but, I try to also consider the future in a hope I will not have to experience the struggle forever.
This was longer than anticipated but has a few basic things to think about (and look further into for precision) in regards to payouts and prices. The next parts will come a little later as I must rush off to work and I don't want it to be massively disjointed and still want to be able to answer a question or two or adjust the post if something is found to be incorrect.
Taraz
[ a Steemit original ]
Good explanation. The whole SBD/steel reward split confused the hell out of me. I couldn't for the life of me work out how it got calculated. Only saw it explained somewhere a couple of days ago. It should be made clearer for new users.
And I agree with your point about forgoing short term cashflow for longer term rewards. There's plenty of stuff I could be doing, and things i could be paying for, with immediate cash flow. But I'm dreaming bigger than that. This applies for my while crypto portfolio.
Somebody predicted on the vertcoin discord, with some technical analysis, that VTC would reach $8000 this year. I don't believe it, because it's too good to be true, and would turn me into a multi millionaire. I know this is off topic, but I could just as easily sell some vtc to pay a bill here n there and miss out on some of those massive gains (even though I think it is very far fetched)
It's similar with steem, except not only could it be worth more in future, but keeping my steem holdings in the platform will hopefully help me earn more to enjoy more future rewards.
Yes. The added income would really help us too but, it would only be a short term solution and we are currently managing through it. Selling a little now would help only a little.. in 6 months though I might take a fraction out and buy my wife something nice.
I don't have VTC and 8000 seems high but, this is crypto :D
I'm very skeptical of the analysis.he used a logarithmic scale but with straight lines. But then he applied the same logic to the historical btc chart and it adds up.
Time will tell I guess.
Good post !
I wish i could have read this when I first joined up - it would have saved quite a lot of confusion.
I think sbd, and steem with will become exactly the same (in value.)
Pegging it to '$1' is just a concept, and one that the market doesn't respect (imo)
I agree that the peg doesn't work so, make hay while the sun shines. In this case Steem. :)
I have used USDT as a stablecoin in the past, which may or may not have been a smart move as rumours have it that it is not backed up by fiat reserves to the extent it should be. But I could've used SBD instead because SBD has been rather stable in the past. If only I had exchanged my SBD after the Bitcoin rally thinking SBD is a true stablecoin, I might have been met with a pleasant surprise ... :D
Thanks for the information.
I trust to power up on the long run. Especially as a newcomer is this a good instrument to increase your voting power and establish yourself on the platform.
Well-thought concept
Thanks for the clarification. I had always wondered why the SBD and STEEM power doesn't match in the numbers.
Thank you for your post Sir! And also thank you for upvoti g my latest post! Following you! Best regards!
Ei mitään.
Otko suomalainen?)) Ihanaa))😍😍😍😍✌✌✌✌
I am 'Finnish adjacent'. My wife.
Allright)) where do you live?
I am new on steemit so your support is very very important for me!!! Thank you! Greetings to yoir wife!!!
I can't believe how long these SBD prices have lasted and still trading around 8 dollars today.
Pretty amazing. Wish I had converted even more.
Thanks for sharing all these helpful tips.
A very insightful post to help people leverage on the great opportunities available at their fingertips.
At first, I didn't know what was actually going on, because I recently came back to steemit and I was really confused how the payouts work. Great explanation, I think it leaves no queations!
Well Said.. Thanks for share this post. @tarazkp
Useful and informative think thank you dear friend
@tarazkp for interesting post
Very valuable information! thank you
I really appreciate how you explained it in details.i was among those that were confused.thanks awesome article
Another nice post.. thanks
Some information here I did not know before, thanks for clarification
Thanks for that! I am a bit smarter now :)
I wrote a piece about Steem rewards and taxes in Finnish for those who live in Finland (like @tarazkp). I'm by no means a tax expert. But I quoted the guidelines by Finnish tax authorities. Have you thought about Steem revenue and taxes, yet, @tarazkp?
https://steemit.com/finland/@markkujantunen/steem-ja-verotus
thank you for your informative post.
exactly these days i tried to look for the advice what is better these day of the crazy changes in prices and rates - 50/50 or 100%. i used 100% until december when i read some article about the prices at the market if they are >1 so 100% is better.
from another side i don't need more Voting Power now cos i just took some amount as a SP delegation so 50/50 is working for me now.