6 Things You Absolutely Must Know About Steemit! (My 3 day experience)

A Little Background

I signed up for Steemit about 3 days ago and brought about 400 ethereum with me. At the time that was worth the equivalent of 1500 Steem and about $5200. After learning about the inflation of Steem (see below) I promptly powered up with the full knowledge that it would be a two year commitment.

What does Steem Power buy you?

On Steemit, it allows you to have influence and direct where money will be diverted. Currently with 1500 Steem my up votes have the power to give people about $0.04. It turns out I can also give myself $0.04 for every posts. In addtion it also hedges against the inflation of steem (more below).

Where does the money come from?

Steem has a 100% yearly inflation built in and adds 1% more through mining rewards. 90% of the inflation goes to those who have steem power. 10% goes to all the upvoted posts. So it's really just a redistribution of wealth that is going to the content creators.

Am I making tons of money with steem power?

I started with 1500 Steem power 3 days ago and now I have 1540. That appears to be a 40 * $3.30 ~= $120 I made just by holding on. Actually no... it turns out I am just hedging against this extreme 100% inflation. Even though the amount of money appears to be increasing steadily in your wallet, its actually diminishing. With 100% inflation 90% of it is going back to myself, but 10% is being drained and going back into the system for "the content creators".

Why you are not making any money on your posts

So you spend an afternoon writing a really good piece on some novel idea you've been thinking about. It's a hit and you have 52 up votes, and 10 comments. But wait, you've only made $0.04, same $0.04 from your own vote. Whats going on? It turns out that my $5200 is only worth $0.04 for an upvote. That means to make a $1 someone needs to have an investment of about $104,000 and thats not going to be your average person. The average person will have around the $10 they got when they started.

Why are others making a ton of money.

Some of the original creators have so much steem power, that one upvote is worth anywhere from $10-$1000 a piece. People call these people whales. And they are what really matters on the platform. Make friends with one of these people, or get their attention and the money will start flowing in. I have yet to get their attention and you probably will not either.

So how will I ever be successful here?

I have a feeling its not just about being a quality writer, but also about getting the attention of one or more of the whales.

It will probably take a lot of hard work and trial and error. It kind of reminds of youtube, the people making a lot of money are the ones who are doing lots of hard work everyday (almost obsessively), but most people who aren't willing to put the work in will walk away with a few cents here and there.