This article discusses some investment strategies I've used. I'm not a professional adviser, so this is not "investment advice", and you should ensure you do your own research before buying any security. Buying Steem involves many risks, including loss of the USD value of Steem and complete blockchain destruction.
This is not a new topic for me to cover, but it is nevertheless an important one, and if there is anything I have learned about teaching people to adopt new habits, it's that sometimes repetition is not as tedious to the learner as it might be to the teacher.
The best long term strategy for investing is to buy assets that produce (or will produce at a future date) cash flow. This can come from dividends (stocks), rent (real estate), and interest (CDs) in the most common situations. The best investments allow investors to retain their principle investment, using the cash flow to either build other investments or to live off of.
In a more ideal world, we'd spend our working lives saving and investing like this, and live off the cash flow in our retirement, passing the principle on to our heirs and building nice multi-generational wealth.
Bitcoin, like gold, has no cash flow. Furthermore, it never will offer holders any cash flow, because it is mined by a small handful of mining companies that are positioned to scale their operations. Some tokens, like QTUM, allow users to stake their holdings and earn more; this process is called Proof of Stake. It is closer to having cash flow for cryptocurrency, but the returns are often random and it can be difficult to plan around irregular returns.
On the other hand, Steem's Proof of Brain allows people to mine cryptocurrency through interaction with the blockchain. This is usually done via Steemit.com, where most users write blog posts or share pictures of food and travel. There is also Dtube, which is a YouTube clone that appeals to video content producers.
Many of you Steemians already know how this works. But there's also a way to make passive income from your Steem Power! Passive income is a topic you're interested in, right? If it weren't, I don't think Pat Flynn would be so popular.
I think this passive income solution makes Steem one of the easiest blockchains to invest in today.
How It Works
Steem Power is influence. The more SP you have, the more your upvotes affect the rewards pool distribution. Some people have hundreds of thousands of SP, and when they upvote somebody with full power, that person can receive $20-$100 or more from it. These "whales", as they are known, are the Borgheses of the Steem blockchain, and their tastes determine a lot of what gets into trending.
A lot of these whales, however, are not actual user accounts. Instead, they are bid bots, which allow users to send a bid to receive an upvote. Bid bots are a contentious topic on Steem, and you'll see some users rant against them as "abuse", while other users see them as a feature that can be used or ignored as desired.
Whatever way you fall, however, it should be obvious that Steem Power has value. The more SP a person has, the more they can directly influence others. But many of us don't have time to fully utilize our Steem Power, whether because of work, family, or other reasons.
Wouldn't it be great if we could lease our SP to other users, and receive Steem in return?
This is the genius of SP delegation: the SP never leaves your account. Instead, somebody else pays you for the opportunity to use it and upvote under their name. It is safe, and the Minnowbooster leasing market is the easiest way to do it. I've even made a video on how to use it.
It doesn't take a lot of SP to delegate; there are currently requests for 100 or 200 SP, which can net you 2-4 Steem per month of delegation. This is a great deal, as the annual percentage yield for lease requests changes from 14% to 25% (I've delegated at 33% a few times!), which is much higher than you'll see in most other markets.
Once you've got your delegation set up, you don't need to do anything. Minnowbooster will send you Steem daily, and you won't be able to utilize the amount of SP you delegated until the delegation period (usually 4 weeks) ends. This means if your upvote was once 5 cents, and you delegated 80% of your SP, your upvote will now be 1 cent.
If you want to grow your SP long term, you can power up the Steem you get and grow your stash over the long run. Between Author and Curation rewards, and delegations, you should be able to grow your SP quite rapidly. Of course, you can always send your earned Steem to an exchange and sell it for another cryptocurrency, or cash, if that is your preference.
For Those Leasing Steem Power
The other side of this trade is for content creators, generally. I would recommend leasing SP to creatives who are building a brand and want to find ways to grow followers and attention. User @d-pend is a good example of how to use leased SP to grow an audience: he has over 5k followers, and for a while he ran a lot of contests that allowed him to reward budding poets.
There are a lot of creative ways to use the influence that even a temporary amount of SP can give you that go beyond upvoting your own posts (although that is a legitimate use of SP). However, anyone leasing SP should have a plan in place on how to best use their short term influence boost.
How to Get Steem and Steem Power
If you're a brand new Steemian, you'll have 14 Steem Power that is delegated to you from steemit inc. They do this so you can actually interact with the blockchain...SP also determines how much you can post, so those with brand new accounts won't be spamming the blockchain with HD photos at zero cost. You earn SP by getting upvotes, but you can also get it by buying Steem and "Powering Up". When you power up your Steem, you lock it away for a minimum of 13 weeks.
Steem can be purchased on an exchange like Binance, Bittrex, or Poloniex, then sent to your account. Steem is free to transfer, and it tends to arrive much more quickly than Ethereum or Bitcoin. Transfer a small amount (1 Steem) first before transferring a larger amount, to ensure you're doing it right and not making a costly (and irreversible) error. As I mentioned above, you can also send your earned Steem back to an exchange and sell it.
Delegating Steem Power gives daily rewards in Steem, and can allow users to grow passive income, even in a bear market. In a bull market, it can be a rainmaker, as your delegated amount continues to be paid back in appreciating tokens. SP delegation allows market forces to act and distribute SP where it is most needed, and gives investors a reason to buy and hold Steem for longer periods of time.
It involves risks-the risk of losing your Steem password or getting your account hacked, the risk of the price of Steem dropping so much that your original investment can't be recouped, and more. This article discusses the benefits of delegating SP and some of the possible outcomes, but it is not advice saying you should buy Steem. Do your own research!
Personally, I began writing on Steem in 2016, but didn't get super motivated until a year ago when a few of my articles on Ethereum got a lot of attention from some whales. Those $5-$10 upvotes got me hooked on writing on here, which in turn gave me the opportunity to build an audience and even get some paid writing gigs.
Posted from my blog with SteemPress : http://steemmaker.com/using-steem-power-to-generate-passive-income/