You hear people talking about Steem, Steem Dollar and Steem Power all the time, but you don't really understand how to use them efficiently and what each one represents. In this article I will reveal each one's use cases and my strategy to utilize them efficiently.
Steem:
The basic blockchain currency, that is the base layer of the Steem ecosystem. It is inflationary, so it's not good for long term storage, and should be converted into SP or SD or moved onto some exchange for trading purposes. Only about 2% of Steem is in it's raw form, probably used for speculation, so the market tells us to not store this.
Steem Dollar (SD):
The monetary unit of Steem, it represents 1$ worth of Steem, and the market tends to respect this peg. It is the true final currency of the Steem ecosystem, and it can be used as any other form of money, even for shopping on SteemMarket
Steem Power (SP):
It is the long term asset of Steem, it is used for long term investments, as the more SP you have more SD you earn through curation. It is easy to convert SD to SP, but harder vice versa, to reduce the inflation of Steem. Steem Power also pays a good interest rate to holders, so it incentivizes people to invest longterm into the Steem ecosystem.
This means of course that Steem itself is unusable, and not recommended to hold, except for maybe speculative purposes. Therefore Steem Dollar is your income currency, and Steem Power is your long term savings asset.
It is as if SP is your asset that pays your income in SD dividends, and that is theoretically what is happening, when you do curation work. Through curation, by upvoting trendy topics, you use your Steem Power to earn Steem Dollar, on a daily basis.
My Strategy for Steemit --- Working Full Time as Steemit Blogger
Putting it all together, I have came up with a strategy how to use this ecosystem efficiently:
- If I earn small amount of SBD I will cashout as much as it is needed to pay my bills and expenses
- If I earn more than 1000$ daily, then I will cashout a necessary % of SBD to pay my expenses and the rest will be reinvested into SP
- All the SP I earn, I keep, and I have no plans to Power Down, because the interest SP earns is just too good to lose it
- I will curate many posts on a daily basis (at least 27 is recommended by experts) until I have voting power, and all the SD I earn from curation, will be reinvested into SP
This way we can get into SP early, until we have less than 100,000 users, after Steemit goes viral, it will be very hard to get into SP, as everyone will come with big investments to acquire this media "Power". So in my opinion better get now into SP, because later it will be harder and harder to get a piece of Steemit's voting power.
I might also adopt this strategy later on after I start earning more on Steemit, because I am definitely committed to the long term success of this platform, and for that I think Steem Power is the best suitable deal!
Disclaimer: This is not an investment advice, it's just my opinion and analysis. I am not responsible if you lose money!
Thanks for your perspectives. Upvoted and now following you. I have little time to blog but try to curate about 12 great posts each day. I think your plan as a full time blogger is solid!
Thank you, i hope it will work out for anyone reading this!
I'm still deciding what to do, I have a few steem dollars in my wallet not sure what to do with them. You sound very positive about your plans. Good luck
Well one plan is certain: earn more!
After you earn more SD and in a more stable way, then it will become easier to decide!
My goal is to earn more
That is a good goal, first you earn more SD, then you will have plenty of time to decide what to do with them.
I am trying my best just hoping the next one will get more attention :)
I'm with you on powering up, but I don't understand why it would get harder to get into sp.
Because, more and more wealthy people join us, who will buy steem power, so your % share of the entire steem power pool will be less.
Sort of like investors buying up stocks after stock split, your % ownership get's lower. Your Steem value invested is the same but the % gets diluted. So that is why in my opinion it's good to buy SP when others are powering down.