After some research into the platform, I found out more or less how it works. There are three categories in which Steem can be stored; Steem coins, Steem Power, Steem Dollars.
Steem coins are generally for either cashing out of Steem, buying Steem power or Steem dollars. They do not gain interest and are more like a piece of property or a stock. Their value can go up or down, depending on the market. Also, the value of the coin dilutes about 0.19% a day, so unless the price goes up on the currency exchanges, the value is going down day by day.
Steem Dollars on the other hand are stable. When you are holding a Steem Dollar, you can buy Steem coins at their market value. A Steem dollar will always be worth one dollar of Steem coins. Another important feature of Steem Dollars is that they gain value over time in the form of interest, which is variable considering market conditions.
Finally Steem power is the most important because it will allow you to earn more Steem Dollars every time you blog and upvote other peoples posts. So this is why I am investing into Steem Power. The more Steem Power I have, the better value I can receive on my unique posts. Steem Power can also be cashed out over 104 weekly payments, so if you get a high enough balance you can cash it out over time if you need to. It also gains some sort of interest over time, and at a much higher rate than Steem Dollars.
Regardless of how you decide to spend your Steem Dollars, I highly recommend investing into Steem Power, if you want to ensure that Steem is around for years to come. Steem Power is like an investment into the community and I know I will be buying as much Steem Power as I can.
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Thanks for the information! This has been insightful. I too had the thoughts of dropping what I earn / put in to Steem Power, but once I read your post, feel much more comfortable in doing so! Again, thanks!
Hey, no problem :) It took a little research, but I have started to get the hang of Steemit. Steem Power is definitely the most important part of Steem, and it also allows Steemit to be viable in the future. Thanks for reading!
hi @anthonyc
I too am looking into the economics of investing some cash here. I recnetly posted on it and if you care to comment it will be most insightful.
I know for a fact we will not make much on the post but it will help us put our minds together.
Cheers!
I checked out your post, and made a comment. It was an interesting read. Steem Power definitely is the wave of the future. Being able to make a long term investment in this community is vital to ensure its success in the long run.
Steem Power doesn't affect your payouts for your own posts. It only affects your curation rewards!
This is actually a good idea. The price of STEEM suddenly went down so why not try to get more and wait for it to go up? I like your reasoning.
I didn't realize Steem Dollars also earned interest. That's cool. I totally agree with you about putting earnings back into Steem Power. Steem Power means influence on Steemit.