Holding STEEM POWER -- why it is good for you, and all of us too. (Commitment Rewards Explained)
It's easy to forget the reasons why you want more steem power. It's not just about having a powerful vote either.
Introducing STEEM POWER
....and solving misconceptions about the importance of it.
This is what most people are familiar with:
1) The more STEEM POWER you have, when you upvote someone, the more money value you give them.
AND
2) The more STEEM POWER you have, when you cash out later and power down, the more money value you get
Those are both correct, but they are not the most important reasons to accumulate STEEM POWER:
3) EARN EVEN MORE FREE STEEM POWER
QUOTE July 1/2017 from @jerrybanfield "75% of Steem inflation goes to authors and curators on posts and upvotes while 15% is given to Steem Power and 10% to witnesses. This means out of the 9.26% current total inflation, about 7.1% of all new Steem "printed" is given out to users making posts, comments, and upvoting through curation. Before 16.0 the inflation went mostly to Steem power with authors, curators, and witnesses getting a few remaining percent."
Translation: Even if you did nothing each day, but just held STEEM POWER, your account would probably (and does) earn more STEEM POWER (SP) simply by keeping as much SP as you can in your account. Just watch your SP grow over time.
4) HIGHER STEEM PRICE
Holding Steem Power keeps liquid steem OFF the market. It ties it up so it can't be sold while it is earning interest payments. This makes steem less liquid, which impacts the supply, which directly impacts the price.
Lower supply of steem on market = higher steem price (so when you do sell STEEM later, you get more for it)
5) HIGHER NUMBER OF FOLLOWERS THAT WILL COMMENT AND CURATE YOUR STUFF
Everyone seems to want your upvote when you have a lot of steem power, because you have more power to direct where curation rewards go. So having some friends and followers with high SP balances helps you to earn if you are an author, poster, or commenter.
People with high SP Balance generally have a high number of followers and commenters. Look, and you will see this happening all over the place.
6) MORE RESPECT
This is controversial, but I'll say it anyway. If you have a tiny account, worth less than $100 USD your words and thoughts are often taken more lightly, than someone that has $100,000 USD worth of steem power.
This isn't always the case. However, it often IS the case. Bigger SP holders (especially whales) seem to have more attention when they post something, because everyone is hoping to be noticed by them. So there is an unspoken added respect given to them. (deserved or not)
7) BELIEF AND SUPPORT OF THE STEEM BLOCKCHAIN
Holding (and not selling) your steem power shows that you believe in keeping your investment here... That shows user and account retention. Wealth retention. Without it, STEEM would be worth $0 - the more people who hold STEEM POWER, the better. We want the majority to be holding SP, and only a minority to be powering down or selling STEEM.
So only take what you absolutely need today. Invest and keep your holdings safe in Steem Power for your future.
Steem Power is good. The more you have is good. When all of us do it, it's good.
Great post that explains everything in plain words. It took me almost half a day to find relevant information to explain how everything works by watching YouTube vidoes and googling all the relevant information. Shortly afterwards I realized that there is no point to keep my steem without transfering it to steem power. Hopefully more and more people will realize that they can only benefit from that in the long term as the price of Steem keeps climbing up. I see very bright future as the posibilities beyond Steemit being only social media platform are endless. Steem on and have a great day!
Excellent. Sometimes I don't know if I explained things well enough until people tell me so. I do appreciate the comment.
Yes, I think so too.
I'm there with you !
Had to share this on my facebook page. I want all my friends to join steemit I am also hoping to convince more musicians, poets and artists to join. I keep telling my friends that not only am I earning money, I am earning it as Steem, which earns me more AND it is going up in value. I have a friend that keeps his money in cash. I pointed out to him that his cash is going down in value while my steem is going up in value. No pressure bro.
: )
So awesome. STEEM BABY!!!
#payitforward
I'm glad you did it.
I would definitely never sell the Steem power that I've created so far and am seriously considering buying some Steem to boost it. This seems like a long term game to me... after all where else can you create and consume great content and get paid for it. Seems like a winning combination to me. Thanks for a great reminder to get more Steem!!
I've translated your post to Russian language for ru community https://steemit.com/steem/@allfabeta/perevod-stati-pochemu-steem-power-stoit-derzhat-i-pochemu-eto-khorosho-dlya-vas-da-i-dlya-vsekh-nas-tozhe
I appreciate that you said where it came from, as well as notified me about it.
for sure, it's your post. How could I didn't mention you and link to an original post?
I just need to bring your words to our guys
Some people, without values, will steal a post for greed reasons and want to hide their tracks.
You, on the other hand, didn't do that... you're right. You need to bring this message to the russian community too. :)
Thanks for the info! I'm still trying to find out if it is worth it buy Steem and convert it to SP and if I buy it then how much. I heard it is not worth it to convert your SBD to Steem. I think I need to read more posts like this one!
This webpage should help you to better understand the conversion rates:
http://www.steemdollar.com/steem.php
The bottom line though is that SBD is converted not on a 1 for 1 ratio as I first thought as a newbie. The rate fluctuates with the market as intended. Therefore, buy STEEM to power up not SBD with prices as they are today.
The easiest way to add Steem Power to your account by adding your own investment is through the "Buy Steem" menu option under the three bar icon next to your account image in the top right of your screen.
As a newbie I made the mistake of adding money to Coinbase, buying BTC there, sending it to Bittrex, buying STEEM there, and finally sending that to my account at Steemit. I paid transaction fees twice that way. Oops!
Maybe my mistake will help others avoid doing the same! /blush
Thanks for sharing that... you're right. Each time you convert and transfer, you stand to lose a bit in transaction fees, etc. So you want to limit the number of "hops" or "transactions" you do, to get what you want.
When STEEM price is low, converting to SBD gets you more STEEM that you can power up with. That's a great time to convert SBD on the internal market.
SBD is also good to keep handy if you intend on buying certain products and services (now and in the future) that accept SBD as a currency.
When STEEM price is growing in price, and you plan on investing long term (more than 2 or 3 months) in the system, buying on the way UP and storing it in STEEM POWER makes the most sense, because as time goes on, your STEEM POWER accumulates even more SP just by holding it.
The "CONVERT" feature you are referring to, is if you want the blockchain algorithms to convert SBD to STEEM for you, based on average price feeds in the proceeding 7 days as published by witness nodes.
The CONVERT feature happens automatically when you trigger it, and gives you an "average" price, which is a very conservative way of getting a "fair" price. You can stand to lose a bit, or gain a bit than trading on the Steemit internal market instantaneously. So there's an investment method for everybody (both conservative and risky types of people).
Is there any simple formula then for us non trader non math wired folks to follow? I thought I had it figured out that as long as STEEM is over 1 US Dollar I'm better off buying STEEM, not SBD, to power up. Is that not true? Explain it as if I were a 5th grader please. LOL
"When STEEM price is low, converting to SBD gets you more STEEM that you can power up with. That's a great time to convert SBD on the internal market." <-- That hurt my creative math handicapped brain.
I'm still curious about the details behind "STEEM POWER accumulates even more SP just by holding it" too. Would I have the regular redeem prompt in my wallet when that happens, or does it just slowly go up on its own?
On its own automatically. The one you push is curation + author rewards only.
To see it happen, don't push the one that asks you to claim it. Write down the number of steem you have in steem power and come back in 3 days. Watch it go up and up. Over the course of a whole year, and without you having to do anything, it increases.
Does anyone have an idea what the APR is equal to then?
https://steemit.com/steem-help/@jerrybanfield/steemit-updates-summarized-from-launch-to-19-0
It's part of the quote I used above, but goes into more detail (which is what you are looking for)
It's not a fixed rate. It's a percentage that can change. In general holding steem power always means your power increases the majority of the time. Read that blog post for more.
Thanks!
Most of us are in for the long haul!
Let it grow, let it grow. A few days from my one year steemit anny, still have not hit that powerdown button!
This was very informative. You were clear in explaining the concepts to the users of our platform.
I've given out SBD as prizes and transferred some to other people, but otherwise, I haven't taken out anything since I've been on Steemit. It's taken awhile to build up, but I'm a baby dolphin now. It's an arbitrary threshold, but it's an incentive.