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RE: I Called John McAfee & He Won't Join Steemit Because Of This Flaw...
That's funny, the thing most people are saying about Steemit is that it is a scam/ponzie scheme and that there is too much Steem and it will quickly be worthless because of it! John is saying the exact opposite.
I think he refers to cash liquidity for the exit scenario where you need $$$ to buy the steem dump.
But I don't think he gets the concept because if you buy, there's no reason to have it in STEEM. It's devaluing compared to Steem Power (which inflates in parallel to the total coin supply, to protect the investor from dilution, albeit slightly slower). So once you buy, you go to SP. And when you go to SP, liquidity (in cash) is no longer an issue because you can only withdraw 1/104th per week - so some level of cash liquidity will be able to cover a small dump like that.
this is kind of an absurd answer. The guy says "theres no liquidity" and you say "well thats the idea, there isnt supposed to be liquidity its SP"
Please explain to me how you can withdraw 600k in steem power in one go. You can't. At most you'll get close to 6k per week, and yes, there is 10 BTC liquidity to do that.
If he thinks about STEEM, instead of SP, then STEEM is the wrong investment (SP is the correct one due to dilution protection). You don't hold STEEM when you can increase them through SP at a very fast rate.
oh duh ok it was steem power, not steem im stupid. Well, i mean with the steem power its just an issue of flat out liquidity.
Youre buying something for value that you won't be able sell (for whatever reason). That non-liquidity makes it worth less than it otherwise would be.
His problem is he can't cash it out if he wants to. That decreases its value. I actually had the same issue recently when i was considering buying some old miners, but decided against it.
Im not neceessarily saying i agree, but pretending his liquidity concerns arent founded is still absurd.
Hes basically forced to hold his investment regardless of how he thinks it will perform.
Yes, hes remunerated for this with SP incentives, but thats cold comfort with double digit %age drops happening every few days.
As an example, i recently was talking to a guy about biuying a bunch of miners with around 100btc worth of SP. I passed on it for essentially the same reason... because he was only offering me a 20% discount on their steem balances and it wasnt worth it for the reduced liquidity.
Edit... im HOP. he was talking about 600K steem power.
And this is what I've been saying for a while.
Vest transfers are unnecessarily restrictive.
People should at least be able to transfer Vest ownership. Like shares.
This doesn't conflict with the objective of limiting tradeable liquid Steem, and it makes SP more liquid.
Encouraging investors to buy-in, with comfort in the knowledge that they'll be able to cash out.
While we're on the subject, could someone explain to me what my options would be if I made a post that was worth $10000. How much of that money could be cash in my pocket within a week? I plan to power up, just curious.
75% of the money goes to you, 25% to your curators. Of your 75%, half is allocated to Steem Dollars (which can be immediately liquidated to fiat via an exchange) and half is allocated to Steem Power (which are tokens that increase your influence on Steemit).
And while I have your attention, the more steem tokens and steem dollars I have, the more I get? I see in my wallet that every day I have more steem tokens. And powering up is turning steem itself into steem tokens?
I believe you're earning more STEEM tokens because they're being held and interest is accruing.
the interest rate for holding steem power is 90% per year
How is this even possible? Where is value coming from?
If you made $10000 post. $5000 of that would be SBD which you can change into steem in the local market on steemit (partnered with Blocktrades) and then you could send that steem to bittrex, poloniex or anywhere else and convert it to bitcoin (easy to do), or some other currency that you use a site that will let you sell the bitcoin for US Dollars or whatever your currency is and deposit it in your bank account. Different places report different time frames. 3-4 days is common.
I haven't done this myself though I have been researching it. I want more steem power so have mostly reinvested into that. Plus, I haven't landed any monster posts. :)
I have bought some things with bitcoin that I purchased with SBD. :) That works quite well.
The other $5000 will give you steem power based on what the current value of STEEM is in US Dollars. So if each STEEM coin were $2 your $5000 would give you 2500 steem power.
So in a $10,000 post you'd get $5000 SBD which you take steps to cash out immediately, and you'd get 2500 steem power (if in the example STEEM was going for $2/steem).
I hope that helps.
EDIT: This was also based on $10000 being the amount you received AFTER replies, votes, etc had received their cut.
I've done quite a bit of trading of Steem and Steem Dollar tokens. $5000-$10000 is not that hard to sell. If you had to do it right away you might have to take an extra 5% haircut or so. If you did it over a few days you could sell it with hardly any extra liquidity cost.
Yeah, I won't really worry about it until it happens, but I just wanted some quick info so thanks to both of you guys for giving it to me.
Good to see you curating and not just posting, respect.
That's because he's used to a world few of us know about: the part of high finance that includes illiquid investments (investments made illiquid deliberately by regulators.) Eg: restricted stock