Earning Steem with Delegation: Introduction to Delegation.

in #delegation5 years ago

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Hello Steemians,
Today I would like to talk briefly about delegation.. While the most commonly known and understood way to make Steem is through content creation (author rewards) or content consumption and upvoting (curation rewards), there is a third way of earning Steem called Delegation. When you earn Steem through delegation, you don’t create content and you don’t upvote content. You invest money in Steem, you Power-up your Steem to Steem Power and then you loan Steem Power to other people or businesses on the Steem blockchain, through a loan process called delegation. The people or businesses you delegate your Steem to, make money and give you a percentage. That’s delegation in brief and I will describe it in more detail below.

Delegation explained
To understand delegation you need to understand that unlike many other cryptocurrency blockchains which have one coin, the Steem blockchain has three called Steem, Steem Power and SBD. Influence on the Steemit platform depends on how much Steem you have “Powered Up” or converted to Steem Power. Steem Power determines how much your vote is worth on the platform. Because it’s our Steem Power and not our Steem which determines the value of our vote, we delegate or loan our Steem Power to businesses or projects and they pay us Steem or SBD for borrowing our Steem Power. We loan them our Steem Power through a special loan process called delegation.

The Safety of Delegation
I have loaned people money before and it is always risky because once you give someone your money. There is a risk of them not returning your money or the business fails and you lose all your money. The wonderful thing about delegation is that you when you delegate Steem Power you still control it. So you can take it back anytime you want by Un-Delegating it. You don’t have to ask permission to take it back and you don’t have to wait for someone to give it back to you. You just Un-delegate it.

Examples of Delegation
When you delegate your Steem Power to a project or business on the Steem blockchain you get a daily or weekly share of the profits. . Many people delegate their Steem Power to upvoting projects like UpVoteBuilders or Qurator or Bid Bots like the Appreciator, Postpromotor. If you go to www.steembottracker.com. You will find a listing of over 20 bid bots which run on delegated Steem Power.
I think it’s a good time to talk about it because the author/curator reward split is changing from 75/25 to 50/50 with curation doubling. Since many recipients of delegated Steem Power make their money on curation, now is a perfect time to discuss delegation.

Delegation is a Passive Investment
The other great thing about delegation is that it is passive. You delegate to a project and then you earn Steem if the project earns Steem. Now you don’t have to do anything else.

How to Delegate
The simplest way I know to delegate is by using Steemworld. I type www.steemworld.org/@shortsegments into my browser and then hit return. Then once my personal page loads I go to the section called delegation and choose who I want to delegate to and how much. Then a box opens and I have a choice of using Steemworld or Steemconnect to delegate my Steempower. I advise everyone to use Steemconnect for all transactions involving moving money out of your wallet with your active keys for safety reasons. You have probably figured out that most people and applications use Steemconnect for moving Steem out of their wallet to prevent theft of their private keys and loss of their Steem. There are several reasons, but one is Steemconnect doesn’t save copies of your keys on their server, so once your transaction is done your keys disappear.

Un-Delegating
When you want to take your Steem Power back you use the same delegation section and replace the amount of Steem Power you delegated with the number zero and you get all your Steem Power back. So if I delegated 100 Steem Power and I wanted to get it back, I would go in and delegate to the same person again, but this time instead of delegating them 100 I would delegate them “0” or zero Steem Power and get all my Steem Power back.

Delegation things you should also know.
You can only delegate Steem Power you own. So you can’t delegate Steem Power you leased or Steem Power someone delegated to you. Once you undelegate Steem Power the project or business you delegated it to loses that Steem Power immediately and can no longer use it. However you won’t be able to use it for 4 days. This is a safety feature to protect the blockchain from people who would abuse this delegation system.
You can delegate just a portion of your Steem Power for passive income and use the other portion to reward content creators or people who comment on your posts. I am active on the platform creating content and upvoting others, but I also delegate a portion of my Steem Power to make passive income.

Now while this is a short and simplified version of the process, I feel it hits the important points you need to understand about delegation.

Questions?

Additional thoughts or Comments?

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Hi
I think I understand it now. This explains why so many whales use bidbots. Your Steempower determines how much of the curation you get and Bid Bots have lots of Steem Power, so they make lots of Steem upvoting people’s posts and they get paid to vote. It sounds very lucrative.

Hi Shortsegments
Thank you for this explanation of delegation. I think that few of us think about delegation because we are focused on content creation and earning Steem for our content. This method you describe sounds like a way rich people get richer. It is a bit foreign to people who make money from wages paid for hourly work. But that’s why we are here, to escape wage slavery. So we want to understand ideas like this. Thank you and please keep writing and explaining.

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I agree with this comment, and it speaks for me too. Thank you

I miss my delegations. :( I still have enough to make my solo vote count though.

I miss mine too. When Steem was cheaper. I leased a lot of Steem too.

Very nice information for biggeners who don't know how to generate a passive income from STEEM.

Posted using Partiko Android

I delegate to UpVoteBuilders also and I agree that’s a good deal. I also delegate to a-bot and TIPU. They always return a higher vote then I paid for have some of the highest delegating rewards. TIPU also pays you a TIPU token which TIPU backs with Steem Power so 1.0 TIPU equals 1.0 Steem Power.
You accumulate TIPU tokens and it increases the amount of accumulated delegated SP, so you delegated stake increases daily. It’s new this month, but so far it’s a good deal.

Posted using Partiko iOS

If you delegate to someone new (redfish), how is the return on investment calculated?

What wonderful flowers :)

Thank you

I read this comment and I cannot say it better, so...

Thank you for this explanation of delegation. I think that few of us think about delegation because we are focused on content creation and earning Steem for our content. This method you describe sounds like a way rich people get richer. It is a bit foreign to people who make money from wages paid for hourly work. But that’s why we are here, to escape wage slavery. So we want to understand ideas like this. Thank you and please keep writing and explaining.

Thank you, please explain more about Bid Bots

another beautiful flower thank you :)

This look so beautiful

Thank you.

I'm always interested in the best places to delegate. I think the best deal I have found is @upvotebuilders and @share2steem . I have delegeted to @steem-ua but I'm started to rethink that. What are the best that you know of?

I agree upvotebuilders is a good one. A-bot, TIPU and therising are also

Posted using Partiko iOS

I'll check those out

TIPU also pays you a TIPU token which TIPU backs with Steem Power so 1.0 TIPU equals 1.0 Steem Power. You accumulate TIPU tokens and it increases the amount of accumulated delegated SP, so you delegated stake increases daily. So the amount you earn daily increases even though your not adding additional delegated SP. It’s new this month, but so far it’s a good deal.

ok. I'm going to look into it. I always wondered what it was and how it worked

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