This is actually something I'll be including in tomorrow 'guide' post on Steem, SD, SP and what to do with your earnings. But I'll give a more brief version here for you...
First we have three categories in your wallet...steem, steem power and steem dollars. (feel free to ask for clarification on these if needed) Most of the time when we our posts are paid out, the curator percentage is deducted and from what remains half goes into steem power (using the current steem price as the conversion from dollars to SP) and half goes to you as Steem Dollars (which right now seem to still be paying at 1 SD = $1 US)...even though it's market rate is currently $2 USD.)
To give the quick disclaimer...it's always up to you to decide the best way to manage your money and this isn't meant as trading advice...
With that said, Steemit (witnesses) actively try to keep the SD within 10% of $1 USD ($0.90 - $1.10 USD)...so right now it is extremely high relative to that range. This means that there is currently a 0% interest rate on SD's (which is paid every 3 months when there is interest) as well as there being people trying to get the SD price back down.
Personally, I take this to mean I don't want to just hold SD's indefinitely. So I've been first checking the internal market (found by clicking the down arrow by SD in your wallet and clicking market) to check the going rate to buy steem with my SD. I compare this to what that rate would be on the crypto exchange market by dividing the steem price by the steem dollar price (I just do this in US dollars by looking at coin market cap info for steem and steem dollars since it's easier than dealing with satoshis.)
Whichever is lower, is the better exchange rate to sell SD's for steem.
Now, you don't have to sell the SD's for steem..it can go into other things or be cashed out and spend (either by sending to your bank, a bitcoin prepaid card or bitcoin debit card.) **I do recommend for new Steemians to take a little bit out from your wallet and use it to buy yourself something real, whether a dinner, shoes, whatever. But not only does this solidify the reality of make money from here, you know it's spendable, can easily say that to others about Steemit it, as well as already have a method setup for any future times you wish to spend some.
Now, I like having a little bit of SP build up where I can award people something with my votes as well as be able to get some curation rewards (even without trying) at about 7-10 SP a week. That's free money to me. The higher my SP, the higher my curation rewards without changing how I vote.
Steem is what has the price fluctuations, similar to other currencies like bitcoin. If you hold some, and the price goes up...you make money. So if you think that Steem will go up in price, there is a good reason to hold on to it. If you're willing to hold it over the 13 weeks it would take to powerdown fully, I don't see a reason to hold it as liquid steem or in an exchange, when at the same time it could also be letting me give more with my votes and make curation rewards with it.
In the end...it boils down to a few things:
- Do you want your vote to have more influence (give more $) on here and get more curation rewards
- Do you think Steem will go up in price
- Have you bought yourself at least a little something with your earnings to solidify the reality and spendability of what you've made here.
I personally don't like the idea of holding tons of SD's with there they currently stand. Though I do tend to keep some in my wallet in case I want to promote a post (which can only be done with SD's.)
Did that all answer your question?
It sure did and thank you. I will have to read through it a few times to get my head completely around it but I get the general idea. Thanks for taking the time to explain it to me as after almost 2 weeks on here I am almost as lost as day one when it comes to how to make and how to spend Cryptos.
I am sure I will have more questions for you tomorrow. Once again thanks for your time and support.
@digestingreality
Absolutely happy to help!
It's tough to present as nice in a comment versus a post...and it's a little more complicated an answer. The short answer...I'm not holding many SD's in my wallet (mainly just to promote posts.) Either hold as Steem, SP, another cypto, or cash it out to buy something.
If you've not bought anything with your Steemit earnings take $20-$50 (or whatever amount) to by yourself something. :)
We can always talk in discord about this too sometime. :)
Ok thank you once again for taking the time. I look forward to seeing your Post tomorrow.
I had to push this post back a day with the hardfork announcement needing a corresponding guide. But here is the guide/faq on the steem currencies.
https://steemit.com/steem-help/@sykochica/answering-common-questions-steem-steem-power-steem-dollars-and-what-should-i-do-with-them
Thank you! You have great attention to detail. The fact that you remember me tells me a lot about your character. Thanks
You're very welcome!
Hehe, thank you!
All of this has been very helpful