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Steemit Earnings & What this Means in Beginner's Language
This beginner's breakdown will hopefully help new Steemians and skeptics alike to better understand how individuals on Steemit actually earn real money. Most people I've told about Steemit are skeptical that I'm making any 'real' money and that even if it is real, is it stable? Is it backed by anything? I think we're all familiar that at the very least my country's currency is backed by nothing but debt and promises. I think I'll take my chances here on Steemit.
When you join Steemit, it's hard not to fantasize about one-day being a high-earner each time you make a post. Depending on how new you may be or what question you may have, let's start with the basics:
STEEM • SBD • SP are different cryptocurrencies and each serve different functions on the platform.
At any time, you can check the value of each of these on a cryptocurrency market site like CoinMarketCap, searching them by name.
Your posting activity on Steemit is what earns cryptocurrency. You can, at any time, use an exchange to purchase STEEM, SBD, and SP for use in your account. If you're ready to start earning:
SBD or Steem Dollars are the primary rewards for posting activity on Steemit. While they were originally akin to $1 USD, AKA a 1:1 ratio. At the time of this post, SBD is worth:
You can purchase STEEM with SBD on the internal market by:
- Going into your Wallet tab
- Clicking the dropdown arrow next to your SBD value
- Choosing "market"
- Choose the price you're willing to pay for your STEEM [it's easiest in the beginning to click "Lowest Ask Value" which will automatically add that value to the PRICE box]
- Entering how much STEEM you can and want to purchase based on the current price in the AMOUNT box
- Clicking "BUY STEEM"
If you chose 'lowest ask,' your purchase will likely complete quickly and show the STEEM in your wallet. Should you have entered a lower price or if STEEM makes a jump (this is a market), you may have your SBD held up in the 'bidding process' until STEEM goes back down to your PRICE.
As you get more acquainted with STEEM, cryptocurrency, and the market, it's helpful to watch the STEEM price regularly and ensure you're buying at a "good price" as defined by your priorities and expectations.
At any time, just as you can purchase STEEM on an exchange, you can use your STEEM to purchase other cryptocurrience or fiat (USD, EURO, GBP, YEN, etc) currencies and convert your earnings to grocery money.
"I should cash out all the STEEM I earn immediately and use it then, right!?"
image by @wanaf as part of the @slothicorn initiative
That couldn't be further from the truth. A simple way to put it:
The more you invest in Steemit, the more Steemit invests in you.
In addition to growing a community around your posts and garnering support (which sometimes appears as earnings), you want to grow your voting power as well. The more Steem Power or SP you have, the more your vote is worth.
Have you ever had someone drop by your posts and give you a larger-than-normal upvote? $10? $50? $100? It's uncommon but it happens! If you check out the wallet of that massive vote-giver (Also called a WHALE), you'll often find their account value is quite high and their SP amounts are in the thousands.
from giphy
You can check your vote value (or the vote value of anyone else) at Steemd /@ your username.
The more your vote is worth, the more you are able to invest in the Steemit community by curating quality posts with your upvotes.
To get more SP [AKA voting power/worth], you must "Power Up" your STEEM.
After you purchase your STEEM either with Steem Dollars (SBD) or on another cryptocurrency exchange, it's time to Power Up:
- Go into your wallet
- Click the drop-down arrow next to your STEEM balance
- Choose "Power Up"
Almost immediately, your SP value will go up. If you powered up a significant amount of STEEM (50 - 100 is a good amount to notice real change), go check your Vote Value and see how it changed.
Circling back to the earlier point that SBD was once essentially equal to USD, but is now worth many times over USD's current market value, how does that impact the post values you're seeing?
@miniature-tiger broke down the SBD / USD discrepancy
published with prior permission from @miniature-tiger
For the 'dollar' amounts (you see in your post values).
It's misrepresented. The system always considers one SBD to be one $USD. I'll try and give you the full run down:
If the Steemit number shows $10 post payout (easier to work with than 2.69!) then broadly:
- Curators get 25%ish - so $2.50, and they get it in Steem Power so it will be converted to say 0.50 SP (if 1 Steem = $5 according to the 3.5 day median average of the witness price feeds).
- As this is a Utopian post it has a reward-split - the Utopian beneficiary gets 25% of the Author payout. So this would be $10 * (1-25%) * 25% = $1.88 and again (I think) this would be translated to Steem Power (although I need to check as obviously missing a trick here).
- As the author I would get the remainder: $5.62.
- As I have a 50/50 payout scheduled I get half in Steem Power ($5.62 x 50% = $2.81 so 0.56 Steem Power) - this should be worth broadly USD$2.81 at the time of payout (a little more or less if the market value for Steem is different from the median of the witness price feeds).
- The other half is in SBD, with SBD always considered by the system to be worth $1. So I get SBD 2.81. If SBD is worth $5 then this is worth USD$14.06.
- So in total as author I get a value of USD$16.88 from a $10 pending payout.
- For Steemit or busy.org posts there are no beneficiaries and you end up at $USD 22.50 for the author from a $10 pending payout (easiest way to get to this is starting with the SBD conversion rate: (5 * 50% + 1 * 50%) * 0.75 = 2.25 per dollar payout)
Enormous thanks to @miniature-tiger, whose original post Do earnings increase for individual authors when the Steem price rises, or not? inspired the further breakdown of SBD worth.
After you've made a post that earned rewards, your payout will happen in seven days. When you receive a payout, you will go into your wallet and it will look like this:
You will click 'claim rewards' and they will be available inside your wallet. Typically, rewards are split 50/50 between SBD and SP. You can change this inside your post settings, but as a beginner, learn what you can about the system before choosing your preference.
Once the funds are in your wallet, you can purchase STEEM, Power Up for SP, and decide how you'll proceed with your Steemit earning strategy.
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Takeaways on STEEM, SP, and whether or not this is "real money"
- The monetary values you see in your posts are not as cut-and-dry as they might seem, but @miniature-tiger's breakdown will help you to convert your earning values to a fiat-currency equivalent should you be curious.
- STEEM, SBD, and SP are cryptocurrencies that are available on the Steemit platform as well as on major exchanges alongside Bitcoin, Ethereum, and other household names.
- You can purchase fiat currency (USD, GPB, etc) with cryptocurrency on these exchanges and withdraw that fiat to your bank account.
- Your bank account is your own business and you can spend your converted-crypto earnings any way you like.
So, yes. Your Steemit earnings are real money.
There are individuals on this platform that are going full-time.
Your best bet is to get active, create quality content, learn all you can, and support your tribe, whoever they may be.
Do you have Steemit Beginner questions? Drop the in the comments below and I will do my best to answer them or share links to posts that can!
Hi, I'm Amelia! It's nice to meet you.
I'm a writer, minimalist, tiny home dweller, and maker living in East Tennessee, USA. My blog has lived at www.amelia-bartlett.com until I discovered Steemit, where I now post most of my work. To learn more about me, check out my introduction post, get up-to-date on my school bus tiny house conversion, and follow me for articles on slow living, sustainable fashion, self-expression, and quality curated resteems!
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thank you, this was incredibly helpful!! im still trying to wrap my head around how this works, but o feel closer to understanding now!
@kristenbruce Happy to be a bit of help. I found that by compiling notes of my own that I learned along the way (from posts, articles, discussions) and compiling it in this little tutorial helped me understand a bit better. So, I can't stress enough that taking notes during your learning process is crucial!
great idea, thanks. its a learning process for sure!! :)
Brilliant post. I've recently introduced a bunch of friends to steem and this has helped answer all the questions I could not!
thank you for this wonderful explination dear @ ameliabartlett
Thank you for this. I was really curious about the topics, so your post was very timely.
So what really is the point of having a vote that is worth a lot?
You're more likely to gain followers that way. Also you can upvote your own posts and comments. Essentially, if your vote was high enough you could earn a living out of upvoting your own comments.
That's so interesting. Thanks for explaining that to me.
Followed!
@gratefulforitall + @hazelpazel - I'm struggling with this one. I have a preconceived notion that upvoting your own posts is not admirable - you're not contributing to the quality, diversity, and universal curation of the platform by upvoting yourself. I can't judge someone who does, but what this does for me is make me wonder what else is the benefit for having a high vote value? Here's what I've found:
How does Superman personally benefit from having superpowers? Good feels and good friends.
That's all this beginner has come up with so far!
Hmm. It seems like a big cycle that always starts with producing good content. I've been asking because I am considering purchasing some steem and was curious about what that would do for me. I wasn't satisfied with the technical answers (solves some bandwidth issues, etc) so I was looking for more.
Thank you :)
Thanks for this awesome breakdown! You're good at tutorials! :)
Thank you for the encouragement @katrina-ariel! You know I'm always open to constructive criticism, especially from you sister, so if you think there's anything I can improve upon, or any way in which I can be more beneficial, I'm all ears.
This is an awesome breakdown of how this all works, @ameliabartlet! Thanks so much for putting this into terms even I can understand! 😊
Thanks for explaining all this to the 5 years old me. These insightful tips and explanations will certainly make life easier for me while navigating my way here.
Happy to be able to help @lymepoet! I've been here for such a short amount of time but I do my best to take avid notes, save posts, and summarize my thinking regularly so I can keep up with it all. 😂
Coins mentioned in post:
COOL. Thanks.
Well thought out. Good job😎
Thank you @enginewitty - I have a circle of advisors that make me look smarter than I am 🤓
Thanks for this post. Very helpful!
Since I started on Steemit a few months ago, my goal has been to put everything I earn back into Steem Power. At first, it seemed like the 100% Power Up payout option was the best way to do it, but I didn't really understand how they were valuing SBDs. Now, I am back to using a 50/50 payout, so that I can convert those SBDs to Steem. I just hope we will get back to a more favorable rate for doing that soon.
Great point @jctdesign! I haven't yet experimented with 100% SP payout but at your comment, I think I will hold off on it. I'm starting to understand the exchange between SBD and STEEM (and have been watching them on the market) and I think that's the toughest part of Steemit for me... but it's forcing me to learn more about investment, currency, and patterns, which is a good thing!
That has been the toughest part for me too, but I guess it is good to learn while you still don't have much. I started watching the market prices when it the SBD/STEEM ratio was between 0.6 and 0.7. I didn't have a frame of reference at the time, so I had no idea how good that was. I wish I had converted all of my SBDs to Steem Power at that point, but again...I am just trying to learn as much as I can at this point.