RE: Steem Power Interest Is Not Compound Interest!
To clarify a bit for those that are new to STEEM I will add this detail.
When STEEM pays out 1$ worth of rewards (whether from posting, commenting or upvoting) it simply creates the new units "out of thin air". This has the effect of diluting everyone's STEEM holdings since the supply has increased but your personal wallet's balance has not.
The way to protect yourself from this dilution is to Power Up.
What does this do you might be axkin'?
Well, for every 1$ worth of STEEM created to pay for content & curation there are 9$ worth of STEEM created to send to those that have powered up.
So you should only hold STEEM if you are planning on selling it, or sending it to someone. Don't hold it for a long time since it is being diluted little by little by everyday's payouts.
Power it up and you will lock in your value.
Hope this helps complement the main post!
But this means that SP also gets diluted. So at constant price, if you're inactive, you'll be down after a year. (correct?)
.
... of course 1 Steem stays 1 Steem, but it gets devalued against any stable currency. That's what I meant in my original comment.
.
.
.
STEEM is just a short-term, highly liquid part of the puzzle. I hope people realise it's not designed to be held. In the short term, we may see the exchange market value STEEM highly against the Dollar. But long term, once the 100% inflation kicks in, I expect STEEM to start devaluing.
Steem Power is the best long term investment - but of course not everyone will be OK with waiting 2 years for powering down. It only works if you are invested and believe in the long term success of Steemit. If that comes to pass, powering up now will pay off massively later - no crazy compound interest required.