CASHFLOW OR CAPITAL APPRECIATION? - WHAT IS THE TRUE VALUE OF STEEMPOWER?

in investment •  2 years ago 

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Not too long ago, I was a paycheck-to-paycheck marketing guy who had an almost "unhealthy" obsession with cryptocurrencies. Fastforward 3 years and my life has become a completely different picture. Because of L.U.C.K (Labour Under Correct Knowledge) combined with the perfect timing, I was able to position myself among the top 100 hodlers of STEEMPOWER since May 2016.

Even thou I know more than 99% of normies about cryptocurrencies...I'm still trying to grasp the true value of things. Below are some of my reflections and I invite you to pitch in the comments section to help us all understand what we are dealing with.

WARNING: I will be upvoting good comments generously

CASHFLOW OR APPRECIATION?

What is the true value of STEEMPOWER(SP)? I'm asking you this because since HF19, the power to direct income any way we want has been multiplied. It also never been as easy to climb to "dominance hierarchy" of the STEEM ecosystem.

Is the market really taking into account the value of SP or is it oblivious to it? Is SP more valuable as a source of income than it is as a source of capital appreciation? What would SP be worth if it was a dividend stock? These are all questions that I have.

Influence, Power and Income VS Profit

Let's say you put $1000 in an ICO and you make a 200% within the 2 weeks. You come out with $2000. You made a $1000 profit with which you can invest or spend as you please. If you don't depend on that money to live, you can try to invest it in another ICO and hoping you don't make the wrong move at the wrong time.

Fundamentally, playing that way is gambling. You never know what your impulse or wrong thinking will bring you. But if you are good and lucky, you can keep making profit that way.

Let's compare that with STEEMPOWER. In exchange for locking in your funds, you get a fix interest + the ability to direct income wherever you want...even to yourself. You don't have control over the value of STEEM and how much you can send in USD terms but you can create over time a steady stream of income via upvoting your own content and curating other people's post.

Someone who has $1000 worth of SP can send about $75 of income per month. (10 votes of $0.25 per day) That's 7.5%!

For me...who value cashflow, security and reliable returns...Steempower seems like a no brainer compared to all the other speculative investments out there.

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The Crux of the Matter - What Is The Valuation?

I'm not an financier or an investment expert and this is why I'm asking you this:
What is the real value of an asset that allow you to send $100 ten times a day to anyone you want? (or $30,000/mo)

Since we cannot do an apple to apple comparison with other types of assets out there, I've looked into How to generate $1000/month in dividends

Here was the answer I found:

Assuming that a portfolio constructed today yields 4% and has a future annual dividend growth rate of 6%, investors need a $300,000 lump sum investment in order to generate $1000 in monthly dividend income.

So let's say that SP is somewhat comparable to a dividend stock. To have the same results as one who can allocate $30,000/mo via Steem...one would need to have 9 Million dollars in the stock market. (I've checked with annuities and it's very similar)

From the personal numbers that I've gathered, one would need about 30 times more money on the stock market in a dividend portfolio. Is the market taking that into account? Are you when you wonder where you should put your money?

Please Share Your Thoughts Below

I have the habit of rewarding good and thoughtful comments that help me clarify my thinking and everyone elses. Please correct me where I am wrong and let me know about your strategy to acquire SP if you have one or why you would rather invest in different cryptocurrencies.

Let's Steem it up!

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I would have to agree with you that the reason why people are invested in Steemit through Steempower value cash flow more than capital appreciation. Personally, I value Steempower more so than the capital appreciation of Steem simply because I prefer consistent and reliable income so I can leverage on the future cash flow to acquire more assets. By snowballing, what may seem like a trickle will eventually become a stream then to a monsoon river.

However, from an investment point of view, it's hard to actually evaluate the intrinsic value of the platform Steemit since its value proposition is unlike any products we've ever seen on the market so far. Current valuation model relies on discounted cash flow where the interest rate plays a vastly important role on current valuation (I refer to investopedia for the formula).

Alternatively, you can also calculate valuation via dividend discount model. Both ways of calculation should yield you a different valuation.

Now, the fundamental assumption for using such models is that the business has a "proven" history of the business. In the case of Steemit, what is the value proposition that it's providing to the marketplace? Is it somewhat like Facebook where it's generating advertisement revenue? Or is it like Twitter? (Note, Twitter haven't really been able to generate revenue that's why its stock price is free falling)

I would have to say that Steemit is creating a revenue stream through user acquisition via tokenization. The valuation model that I mentioned depends on actual "fiat" revenue. Since there's no way to actually value Steem directly (you have to trade Steem for bitcoin and then to fiat), the models don't really work in this context.

That's why financiers and many banks are slow to adopt blockchain technologies and cryptocurrencies. There's simply no way to actually value the marketplace other than pure speculation. From the risk perspective, investing in Steemit like investing in a pool of mud: it's extremely risky and the outcome is very very unclear.

Besides, if we were to evaluate Steem dollars like fiat, then the runaway inflation of Steem also pose a huge problem (think of the returns of investing in Steempower like interests gained in a bank account). Honestly, banks truly truly hate risk unless they know for sure that they can make money with a high probability of success. Furthermore, cryptocurrencies are a threat to traditional way of banking which makes bankers detest them even more.

That's why most bankers would dismiss Steemit as a scam and a Ponzi scheme. I would say treat any investment, be it in crypto or traditional asset, as money you are willing and can afford to lose.

My 2 cents worth even though I did not work in the investment banking department.

Very good comment. Just want to clarify: the inflation is only 10% per year...it is no longer as it was in the beginning.

Inflation hurts everyone and people who keep harboring thoughts about "free money" should banish such ideas. The reason why people flock to Bitcoin is simplying because it has the value proposition to function much like "gold."

Scarcity is not always a bad thing though. I look forward to read more high quality post from you and engage in though provoking discussions. :D

Also, the inflation of any currency, be it fiat or crypto, needs to be justified by its demand. If there's no demand then on the long run, its value will be essentially worthless. Now, if we were to treat steem dollars as a "proxy" for fiat money, 10% rate of inflation seems extraordinarily high.

Inflation of the Euros and US dollars are below 5% per annum. If the number of active users stop to grow, it will definitely hurt people who are deeply invested in this platform.

Bitcoin's inflation rate was 30% to 50% before 2011. I think we are okay.

Future expectations for inflation are also critically important for a currency and everyone knew the disinflationary path that Bitcoin was coded for. I'm not sure we can say that as easily about Steem, can we?

U.S. Inflation averaged 1.9% over the past ten years. I don't think the Euro has been much different. 10% inflation per year causes your purchasing power to drop by half every 7 years, not good.

I also find it difficult to assess Stem as a way of earning. It's not known what price will be in his tokens in a year. Yes there, even after a week!

@cryptoctopus your comment about ICOs and gambling is spot on. This is no different from the early 2000s tech boom when IPOs on websites went for insane amounts of money.

The idea that you put forth about what it would take to have $1000 dividend monthly is what struck me. Steemit isn't a platform on which you make money doing nothing. Dividends in the stock market are effectively you putting your money in the stewardship of others. Increases on Steemit are directly tied to your own decisions, which gives an added layer of freedom and, on some level, mitigates risk.

Good post, thanks for organizing some thoughts around this. This post could very much be used when friends or family ask, "Why Steemit?"

That is why I am excited sharing Steemit to my family and friends 😀 I am new here and full of hopes. 😀

Thanks for the compliment @chefcryptoshark

Well written @cryptoctopus and certainly bringing the focus of the community where it should be - on investing in ourselves as a whole, investing in steem power.

Let me build a little on what you are sharing by adding something maybe small but of great value.

Dividend stocks payout a small percentage of income. Steem power as noted is paying out a large sum (7.5%!). A big difference. Here is a much bigger difference. The majority of dividend paying stocks are not growth plays. Rather established corporations giving back to shareholders not through late expected future growth but through dividend payouts. But Steemit...

Steemit is a ultra growth play and by investing in Steem Power you not only give yourself the ability to create more growth in your investment but the future growth of Steem alone is not quantifiable. Yes the early adopters have seen exceptional growth already but starting out today as a new user you are still an early adopter and are set to see huge growth over the years ahead.

Good point. We win both ways. And if anyone thinks we had phenomenal growth wait until there are millions of daily users! (We are at about 20k a day right now)

20K a day is awesome! I have only joined and began spreading the word. This article inspired me to write about what 7.5% growth can do (you were mentioned of course and linked to!) for us as an investment.

I think it is very relavent to the readers of this article too (if you don't I greatly respect that just let me know and I will remove it), https://steemit.com/investment/@jordanlindsey/how-investing-in-steem-make-you-a-millionaire-compounding-7-monthly

In my position using SP to generate Cashflow make the greatest sense.

However I was fortunate enough to stock up on SP before the massive bull-run we're currently in. Generating cashflow means I don't need to try to second guess what the market is going to do.

Any sideways or upwards movements in STEEM means good weekly returns if you have a decent amount of SP. If you enjoy posting and write well it's a no-brainer to hold on to your SP. Even if the Steem price drops, the returns are good. If Steem completely crashes, you have Bitcoin and/ or fiat to pick up cheap Steem with.

Ultimately, I don't want to spend my life trying to second-guess what the crypto-market is going to do. I'd like to earn doing something I enjoy and have a major say in how much I'm compensated (rather than having to rely on the whims of others). SP offers that.

Sidenote: I'd caution against greed. It's important to remember that any rewards allocated on the Steem network are subject to the implied consensus of the community. Systematically allocating disproportionate rewards to posts/ authors that offer little value can quickly backfire. It's inevitable that people will start to downvote those who take the piss. I think as long as you're prepared to offer value, rewarding others that offer value and not be a complete dick in the process, you're golden. Afterall, the best way to increase the long term value of your capital is to ensure Steem/ Steemit can continue to attract and retain quality content creators to the platform.

I completely agree with you. We are in a big game with a lot of diverging opinions about what is okay or not. I just try to not poke the bear too much.

dividend certainly not always guaranteed to increase every year however, once a company has the reputation of delivering reliable dividends that increase over time, then the company start working hard so that it dosen't disappoint the investor.If we start with a penny on day one and double our"account" each day, we would be a millionaire within 28 days.
I think steem is still in the process of getting more reputation once it does it would be worth anything.
Still i can't say how much it would be worth

Absolutely...there is a point at which the dividend analogy fail.

One neglected aspect is that that $100/day rate is not a steady state and will trend down until we find equilibrium.

People are obsessing about the wrong things -- we need for people to have a reason to BUY Steem and HOLD Steem in order for it to maintain value. Whether that reason is advertising revenue that goes only to SP holders, or additional SP interest that flows much more highly to SP holders, or something else, I don't know. But this is the key graph that no one focuses on.

This and onboarding high quality new users are everything:

https://plot.ly/~lukestokes/96/withdrawal-to-deposit-ratio-by-user-count-over-time/

HT @lukestokes

I'm not sure we are bound to trend down. With the new features coming out + new front ends, I wouldn't bet on things slowing down anytime soon.

Talking about buying STEEM is almost a taboo topic on Steemit. It’s weird, and I’m trying to figure it out.

I understood about half of what you said, and I'm fairly new to steemit, but even I have seen the potential in SP, so much so that this week I am in the process of investing $5000 in SP
2.500 done 2.500 on the way. Is see this as a long term investment, and because I can't panic sell my SP it feels better for my blood pressure :)
Great post

Yes, I like that too. I made some terrible move buying at the top and selling at the bottom. Now I just focus on getting as much SP as possible and move forward with what Steem Allows me to do.

Wow that sounds just like what I did, when I first started trading I made a nice profit, It must have been luck because after that I just started buying high selling low and lost most of my profits. I have now given up trading and are focused on long-term holding. BTC STEEM & EOS

As far as I can tell, once new investment/re-investment slows down and the selling off of steem or SMDs increases (whether it "trickles out" through "powering down" to steem or leaves as rewarded SMDs which are sold off) the price of steem will have no choice but to go down. This may take a while since so much of the Steemit network is locked up in SP but I don't see how it can be avoided.

Some may take issue with viewing Steemit like a business. Bitcoin for example doesn't require continued investment because it provides a wide variety of abilities which create a demand for BTCs. Steemit also has utility because it allows a means to reward content contributors, however the network is designed to promise everyone more than they put in. The only reason contributors can be rewarded is because there's a constant flow of investors who expect to be paid out later.

I think the discussion of whether or not Steemit qualifies as a "ponzi scheme" is irrelevant. Of course, you don't have to put money in to get paid if you are contributing content. Nevertheless some people do have to invest in order for the Steemit network to function, and if everyone putting money in is eventually expecting more out then there's no way for all of them to get paid.

For the record, I'm not a Bitcoin maximalist and I love seeing new projects in the crypto space. I have no skin in the game when it comes to Steemit. I've just seen a lot of people promoting it and I don't understand how it will end up working. I apologize if I've misrepresented Steemit because I'm getting things wrong on how the network actually functions. If that's the case please feel free to disagree or correct me.

Users and attention. Most people decide to powerup and therefore reduce the supply. Demand for SP is easy, upvote for getting more attention on your content. The blogging is only a distribution mechanism to bootstrap a real digital currency and economy.

thanks for your this great input

  ·  2 years ago (edited)

Thanks for writing that. I’ve been thinking since I got here that this blogging contest is just a foot-in-the-door technique for Steemit’s true ambitions (achieving bitcoin’s dream).

One thing that must be factored in is that you can only send that much money if the payout proposal is not objectionable enough for someone else to oppose and counter the vote. Steem payouts are intended as a consensus system, not just money to spend on any way you like.

very good point

I enjoyed the reads and like your thoughts. I am not an expert, but i noticed one thing. Never underestimate the dumbness of the people.
One example: Every month on fullmoon since January 2017 Byteball is paying "Bitcoin owners" for holding bitcoin. On 9th. of July every bitcoin owner gets currently more than 60$ in return just for owning 1 Bitcoin, so 6000$ for 100btc (2-3%) just for signing the ownership. That will repeat 1 month later. How does this work? The normal conclusion would be a massive drop in price after the giveaway. But it never happened. Sure its gambling. Is the stockmarket any different? I believe the stockmarket is the "casino" for guys who would not go into a "casino" :))).

Yeah - I've been pondering that one myself. Is this where the term "Fullmoon Party" comes from...heh.

Excellent article. For me, Steem is the Wild West, where those who never could quite get into that world of $300,000 lump-sum investments in order to generate dividend income actually have a good and reliable (if they put the work in) chance to make a go of it. The folks that tend to understand cryptocurrency, even if only on a visceral, non-technically savvy level, tend to be a strange of breed of individuals with an almost prescient and gut-level sense of real opportunity in new, as-of-yet untried/unproven things and ideas.

This is why Steem is so valuable to me. Because I cannot even understand the full value of its import yet, but know that the general concepts and ideas are ones that are bound to flourish and expand almost like fractals. To others I may look like a nutty prospector with little chance of success. From my little spot by the Steem creek, though, I almost look at them with pity. They don't realize this is a new kind of gold dust, not limited simply to what's in the pan, as in the past, but implicit in this new gold dust is the value of the idea of gold itself.

I feel exactly the same and everyday I try to grasp what all this really mean.

You bring up an interesting thought on the ICO's. I often read Doug Casey who talks about speculation and he is the ultimate speculator. He doesn't talk about crypto's too much, but he is starting to more and more. He has found a few guys who are more knowledgeable so he can focus on real estate and gold miners.

He is in the camp about putting a small portion of your income into speculative stocks that have huge potential. He likes to find 10 small junior mining stocks and puts a percentage into them. Even after doing the due diligence he knows 3-4 will fail for one reason or another, another 3-4 will probably break even and maybe have small profits, and then 1-2 have the potential to go 10,20,50, or 100x.

With this thought in mind it is certainly a form a gambling, which some individuals can stomach, but most cannot.

I think these ICO's are the same way. Even though the technology may be strong, the coin may be solving a problem, and the developers may be solid there are so many other factors that going into whether the coin will be profitable. Since you have been in the cryptoverse for so long I am sure you already know that, but I feel that you're better off going with Steemit and investing in this platform than the ICO's. Gambling is fun and addicted, but at the end of the day, the house usually wins.

With all of these ICO's it seems like we are in a bubble, but it may be early in the cycle. It seems like every day there is another ICO.

Very interesting. Will look at what Doug Casey as to say about crypto.

You think in terms of interest rate and return on investment, which is exactly the same why I do. I've only been on Steemit for two weeks, but it became evident to me that I wanted to be vested in this site through steem power. If you become part of this community, and buy into this concept of steem ownership, then your rolling a snowball down hill. Your investment is going to grow quickly, faster than you could ever dream of in the stock market. Thanks for the great article!

Keep going man, with a lot of SP comes a lot of responsibilities. (and $)

Speaking of CashFlow, hey everyone here in this thread, you should ALL show @cryptoctopus some appreciation by carpet upvoting ALL of his recent comments

https://steemit.com/@cryptoctopus/comments

He has really done alot to help alot of minnows with chainBB and resteems more of other peoples posts than he even posts himself! Lets ALL give him some upvotes like i just did! (Hey octoopusi gave u a shoutout in my latest giveaway post! if it hits sixty bucks i ca give out forty five bucks ;) lemme knwo if u can help with it, i think u will like me last 4 posts being giveaways!!!!!

Very true. Huge appreciation :)

I'm still trying to get the hang of SP and will continue doing some additional research on it. I'm slowly raising my Steem power and will continue doing so.

I have also noticed that some of these so called Whales on Steemit has brought some steem power directly, giving them more leverage. So, I can see it as a way they give themselves an advantage over the average joe.

One of the big problem with buying stocks is that you have to pay tax on capital gain (20%). It's even worst when you invest into 401k. Company such as fidelity charge you a .02% -1.9% quarterly fees, and these fee are the hidden cost. Don't forget you can't redraw the money until you are 65-67 years old.

Thanks for the posting Cryptooctopus.

95% of my SteemPower came from content production. So, it's possible if you labor under correct knowledge.

That's good to know. I was watching one of the Whale actual buying some steem to increase his steem power. I still don't understand how somebody on steemit can get pay $200-300 for below average contents.

quality content is a subjective notion and it's not just about quality but also popularity (just look at youtube trending)

Yes, it's based on popularity. I also read there another player coming around the corner called kin. Seem like a legit player into the social media space.

https://kin.kik.com/

Interesting read about SP and although I'm really new here, I am considering investing a little in SP but it also occurred to me, correct me if I'm wrong, SP takes 3 months to power down to steem and in 13 installments so it also mean that the value of our SP is subjected to market conditions in that 3 months that it takes to power down? Of course, I'm not planning to acquire SP and power down the next day but that is a consideration should an emergency happen that requires cashing out. But with 3 months to power down, even the value is hard to have an accurate estimate as a lot can happen and change in 3 months. Thoughts?

for sure. SP takes 13 weekly installment to completely cash out. Which of course as to be priced in if you are investing money you can't afford to lose.

  ·  2 years ago (edited)

Comparable analysis is nice, but the answer to your question lies in this: when you sell STEEM for USD, it means that someone on some exchange is willing to buy STEEM and give you USD. As soon as you know/understand why they do it, then you know your answer. I have mine, I believe that the only reason STEEM can sustain the price in the long term is because sooner or later it will be a marketing tool and will sell either ads or influencers' posts to large companies. I believe this is the only reason why it makes sense for someone to buy STEEM. As of today "why selling STEEM" is obvious (you cannot go to the grocery store with STEEM), "why BUYING STEEM" is not obvious.

I would suggest for you to look beyond the social media aspect of STEEM. The social media aspect is a distribution mechanism to get a digital currency in as many hands as possible. To the extent that STEEM is able to do this, business will be built on top of it. It's a crazy fast blockchain with 0 fees after all. Add to this dozens of interface doing different things, wordpress plugins, chrome extensions and also the benefits of holding SP as a source of income(via posting and curating) and you have the reason why people would buy STEEM.

Thanks for the clarification, indeed distributing the currency is something STEEM is doing so much better than other cyrptos, you are right!
As a speculator I prefer to keep it simple, maybe one day there will be STEEebay or Amazoneem, but for today the most simple scenario is a currency to pay influencers, makes sense and I'm in:) 0-fee is not necessarily a good point, but anyway time will tell!

Nicely done. Steady cashflow is where its at and steem power could provide that!

I agree with you: People are invested in Steemit through Steempower value cash flow more than capital appreciation.

I prefer consistent and reliable income to acquire more assets.

Congratulations!

There's a lot going through my head while reading this, so here it goes...

My first thought is that I think another comparison that could be made is real estate investing. You have the speculator and the cashflow investor. The speculators are out here in California buying $3 million homes and losing money each month with the thought that it'll go up in value each year by 10-15% and make it all worth it. Meanwhile, in places like Arkansas, you have cashflow investors buying $90k homes and making 200-300 per month in net profits on about $20k down. Obviously, the cashflow play is a much smarter and safer form of investment over the long term since you're hedging against any potential depreciation in the price of the real estate with the cashflow.

My second thought is the difference between a dividend stock and SP. You have to actually put in work to make that SP generate that income. You don't have to do a single thing for that dividend stock to generate income. I think that's a very important distinction to make here.

My next thought is about investing in building up SP coming from someone who just joined last month. I've been studying the STEEM charts a lot over the last month and the trends keep showing a gradual decline since the peak on June 7th both against the USD and BTC. This makes me hesitant to want to start putting any real money into it until a real bottom forms. What's to say that it doesn't go back to April's numbers, which based on historic numbers seems to be where it's been more often than not. I really want to build my SP, but I just don't want to be that sucker that buys in for $10k SP that's worth half that in 3 months because it kept falling. Then think about how much longer it would take me to recoup that value even with the cashflow from the voting. Now if I'd be here since January, I probably would have happily put that $10k in because at least it was stable even though it wasn't worth much.

My last thought that I want to share here is that I do have faith in the long term viability of the platform thanks to people like you, @jesta and the other great minds that are building outside of Steemit. It will be niche audiences on custom domains built on top of the STEEM blockchain that will create the demand that STEEM needs to keep thriving. For example, I have a page on Facebook with 1.7 million fans that makes me $600/day just posting links to sites like Bored Panda or LittleThings, but I can't send them Steemit.com and make money because 1. no one has accounts to vote 2. views mean nothing without votes 3. no one in that audience understands cryptocurrencies or blockchain. Steemit.com just confuses them. That's the major hurdle we face here!

And now that I've written all this, I realize I should probably take most of this and turn it into an actual post. :)

Where did you come up with the acronym: LUCK?

  • Labour Under Correct Knowledge

Never heard it before - I really like the concept - Will be using it!

I’m not really good at numbers but all I can say is you have a great content. Keep it up! 👍🏻

Nice work, very articulate. In my opinion I feel that capital appreciation is better than cash flow. That is why I choose to convert any little steem I get to steem power, hoping that the value will apprentice in the future, and that will mean more money to me, it will also help me to climb the steem ecosystem wish is very important in this community. I work hard every day by being active in this system, reviewing other people article but recently I just posted two article which I couldn't get enough upvote even when I know that the article is rich. I must continue to move on building friends and steem power in other to become great in the future. I will go for capital appreciation. Every business person will want his or her capital to appreciate. Thank you so much for the several up vote you have given to somany people, your so generous. It has really encouraged many people who have not make much from the system to have hope. Weldon sir, already following and have upvoted.

  ·  2 years ago (edited)

@cryptoctopus onec again you have judged correctly and thus deserve a worthy follow from me. Steem power is the place to be hence why I power up always and am seeing the benefits daily. Cryptos are very volatile and there are lots of shit coins. I even believe that powering up is more profitable than minning altcoins with Genesis (however it depends isnt it). If all goes well according t plan, I see steem reaching 50 to 100USD by end of next year and this wull create lots of millionaries ( @cryptoctopus )
amd multimillionaires (me haha). Great post buddy, thanks for sharing.

Yes I think it's greatly empowering. If the value of SP goes up we can have both capital gains and cash flow, guess it's possible to have our cake and eat it too :)

  ·  2 years ago (edited)

I see people posting articles that look right out of your emails spam folder on the trending with $850 payout, major self voting and group circle jerks, i start doubting the merit of HODLing Steem power, then i see posts from people like @aggroed, @gktown , @dwinblood , @gmuxx , i really start believing in the platform again.

You can just tell there are people who really believe in this and are willing to put in the effort to make it work

I'll eternally be on the fence.

"Now faith is the substance of things hoped for, the evidence of things not seen".

There's always a few bad apples in a bunch. At least with steem we have an orchard of good content, growing every day :)

Hi @cryptoctopus thanks for sharing this! Great expansion for LUCK!

In one of your paragraphs, you mentioned that SP gains fixed interest. If we look at our wallets, the SBD and Savings accounts mention an APR value, while the SP account does not. Can you tell us more about the interest on SP and how much it is currently at?

Thanks :)

@cryptoctopus

I truly appreciate your post as its also quite informative and thought provoking...For me, steem is not only about steem power but freedom from servitude...By this I can explain with my personal testimony which also is my strategy. being new in steem and relatively unemployed for a long while even with my masters degree! I joined steem just 3 weeks ago and started with a little amount i saved ...currently, thanks to hard work and daily engagements with other people's contents through constructive comments, curation and posts, i have covered over 450% ROI and counting buying steem power daily. As such, I no longer search for work but steeming hot. This means, I am my own boss as a stemian!.
My strategy is increase my online presence from 6hrs to 10hrs on steemit daily, reading interesting posts, art works, salivating on good foods and responding with my thoughts and following replies, as such i have built a growing followership that is helping me succeed.
Daily engagement has earned me over 500+ followers in less than 3 weeks and i target my first 1k followers, God willing soon. So this is my strategy to build myself by trying to gather enough followers through positively engaging on daily basis for long hours and encouraging new members thereby getting some good upvotes daily. I do see steem as an arena or community where hardwork pays and not complaints. My few posts didn't earn much as such i adopted new strategy to build followers first and then start posting great contents...

Enough of me and my strategy (sorry to bore you guys) now back to your message.

some few lines struck me which i wanna analyze... the first is "In exchange for locking in your funds, you get a fix interest + the ability to direct income wherever you want...even to yourself".

also...

"You don't have control over the value of STEEM and how much you can send in USD terms but you can create over time a steady stream of income via upvoting your own content and curating other people's post."
This is my future target in steem to build enough steem power to be able to help new comers as most of you great guys are doing. Glad to be following you to be getting such wonderful posts.

Also your explanation of SP is as comparable to a dividend stock is awesome and really hit the nail at the right head...Now for all these, its no more rocket science to understand that one needs to build his steem power to be able to pay people through curation and also earn something for that, as such...why cant we all join hands together following your statement in your post to build "one nation under steeem"!

My question now is...how can we use this power in steem power to help and encourage those posts that are sent by those with very low steem power which does not even get read by anyone and no upvote...how can we use steem power to encourage those minnows who work so tirelessly day & night to come up with good contents and it disappears into oblivion...cant we have a separate header where best 100 best written posts with low steem power especially from minnows are published and those with steem power are encouraged to upvote and get a higher % of the curation more than when they upvote themselves... while not allowing more than 5 self upvote daily...Just my thoughts which i wanna share through your blog since I know you are part of the big guys with big heart...

Thank you for reading...
@kenhudoy

When the lights first came on for me regarding the ability to benefit from the growth of Steem Dollar value and the ability to basically vote yourself a dividend, I realized that powered up Steem could be an asset like no other. I think it will be incredible to watch the value of SBD as this realization spreads. Thanks so much for sharing.

I learn from you, I just started 30 days ago. I am motivated to catch all the whales, your idea about buying steem than these unproven ICO's is good stuff :)

Steem power is good investment for future..like other currencies if the difficulties increases than the value of the crypto become strong
As steemit Algorithm improves and more the people joins the steemit and they will have to buy steempower to compete with others in efficient way ..the demand increases and the steem value surges..
Remember that the value of steem and steem dollor is different...steem dollar is Align with US $

Simply we say that both factors drive the steem value

How do I get interest for locking in SP? I haven't seen any interest yet, unless it only applies if you have a minimum threshold of SP. I really wished I had found this platform earlier. :(

Theres no interest, that was the old system, thats gone now!
u earn on steempower from curation and making ore curating posts before they get popular, like @thejohalfiles he has zero posts and just upvotes content an comments and makes over $2000 a week incurationbut he has $3 illio in anindrect wway frn US dollars worth of steepower BUT back in march he only had 100,000 worth fo stemppower and now es a multi millionaire so u may not see a direct beenfit of steempower if u arent popular or hav followers

u neeed to realize that when u have steempower, and u can upvote someones post and give thenike $1, they remember u! they LOVE u for that and they follow u! people notcie wen u give them 41 or one comment they wana follow u and uvvote all ur posts backk! these minnows save up their earnings and one day wil have alot of steempower tp uvote your posts and return the favor!

also steempower helps steem price grow! as we lock of money away, first of alll it helps us to NOT spend it FORCES us to save, SECOND of all it he;ps steem price grow! and the steempower lets you upvote ur own comments if u want! but u canmake friens with people and REALLy gain the benefits of ALLOT of collowers!!!

So just worry about he;;ping others, u wiill benefit from heping others directly or indrectly!

just try showing posts about heping someone in a strggling developing nation! sow about how u paid the internet bill of someone in thrid world who ant afford internet! this will help make u look good and help u make money off ur post! i just gave away five SBD to a few minnows and made a post about it ad i ended up making $14 off giving away $8! so i can now gve out more! see how that aworks??

but if u have lots of steempower u get curation rewards AND u makealot of friends who become your followers and end up upvoting all your posts in the future!

I made friends with @gigafart and then he bought his way to a whale! now he can give out $10 at a time with is upvotes and i believed in him BEFORE he beacem a whale, and so u haveto believe in peeople! pbeieve that someone wo may be a minnow,lie, in march, can raise to becoome a pre dolphin, ii have a few thousand dolars now and im saving up ALL my steem as steemppwer and its OLLY beena great benefiit! and the price of steem WILl g up to $10 before thee end of this year and we will have 1 million users before deceber!

ok i must go watch Alien Covenent now!

have fun and SERIOULSu gagve fun posting! find a good forum with people talking about a subject u enjoy ad just post lots of photos and fny Gif!
like this! I found out we canplay CHESS inside steemit posts! hha jut copy the image, paste in MSpaint and cutthe piece u wanna move! Lets play! here its your move!

15% of the 10% inflation created per year goes to SP hodlers.

This is what I am curious about too. How often is this paid out?

Always just check out someone with a lot of SP and refresh the wallet you will see a greater number
@wiedy

So it is constantly increasing? Interesting. Thanks.

yes

Hey, just want to say thank you for your upvote. Really appreciated!

i did upvote u and i intersted in ur articles...i will be glad to follow me also and upvote . thank u x

in furtherance i forgot to thank you for this post and to say I sincerely appreciate what you have been doing...as such, the little i can do is to resteem and keep following and commenting...
thanks and God bless you and bless all Stemians!
Cant stop loving all of us...

Just Followed You. You Have Good Quality Content man. I liked Your Posts. This One is Really a Good Strategy no doubts about it , i am into it. The Picture edit is Awesome. Keep your Good Work Up. Have a Nice Day. :)

To invest in Steem power the game does not change. You still have to work your ass off to get what you own. Like in other crypto you just buy and wait basically and cash out for profit, here the game is way different. And you have to play the it. You want to earn big, you play big simple as that.

To be a whale you have to pay for that!!!
So my first earnings will use for power here.

Just invest in Steemit , thats all,peace!!!

Thanks for the post. I'm at the beginning of this journey kind of where you were 3 yrs ago. This is some serious inspiration to play the long game.

Nice post, I enjoy reading it. Check out my post on some Fun Facts
https://steemit.com/facts/@circiuboby/ifacts-fun-facts-part-1 It's a new series i'm starting and want to know your opinion. Have a nice day!

I believe in what Steemit is doing and the process. It has been over a year and the improvements continue. New ways of doing things sometimes make people hesitant because they don't understand how it works totally, me included. I do know this. I see SP as the best part of Steemit. I'm all in.

As you noted with your dividend math, SP yields an incredible amount right now. The return is so high that even with substantial depreciation of the purchase price, one can expect to profit from Steem if they hold.

There are strong incentives both to hold and to cash out, given the rate of "dividends". I expect we'll start seeing much greater price volatility soon.

What should be done to raise the steem power?

Purchase some Steem from an exchange and power up or produce content that others value and you will get some SP

my Steem dollar still small

keep powering up

I've never seen an analysis like this before, and it's quite fascinating!

Especially the ability to direct votes to yourself, allowing your SP to function like a dividend paying stock. Or almost like having a bond portfolio or an annuity like you mentioned.

Of course, there's a lot of volatility and variability not normally associated with traditional asset classes, but inherently more reward as well!

Followed and resteemed!

Overtime isn't Steemit going to down down as those other investments? Users are calling on a crackdown on self voting for both posts and comments while new forks are reducing the cashflow. Check the upvoting crackdown project here: https://steemit.com/steem/@l0k1/introducing-smackdown-kitty
Then view the hardfork's effect on reducing payouts here: https://steemit.com/steemit/@ilyastarar/frustrating-times-for-minnows-post-hard-fork-19-i-m-done-with-randowhale-are-you

The true power of Steempower... hmm... i wonder what is it.

Steem as a currency has a potential to increase your steem holdings in value over time because of the exponentially growing community. But i feel it is not the only reason that determines it's value. Frankly saying, if everything will be okey with recharging of the reward pool, i'd rather prefer steem to be stable. So we will be able to keep being a part of this amazing community.

Thanks for the information about steem power.... nice article. Followed you

This is interesting, thank you for sharing :)

I think until Steem will grow at this rate SP will be a good investment

Thanks for sharing! A link to your post was included in the Steem.center wiki article about STEEM Power (SP). Thank you and good luck again!

Thanks @cryptoctopus, I've debated with myself for days sometimes on which way I should start this process. You'll hear advice from one side that's in it for the money (Greed) and the other that's in it for the community (Growth). So we battle on with the 2 G's (in reference to the "Brothers G"; long story).

For me, I think I'm trying to balance both. Part of me sees this as continued growth, while the other would still like to see what the potential of immediate equity production is. You nailed it on a lot of points and in order for Steemit to grow there will be required that investment portion by it's users also. To just come into ANY social media platform with the idea in your mind of "Take, take, take"... you'll go nowhere.

I say give what you can to SP that makes you remain comfortable until you're ready to take the step that may be viewed as a risk, when in reality it's turning out to be more of a windfall. Following.

wow ,very useful information ,thanks :)

Yo soy nuevo en esto, apenas voy a cumplir una semana y me gustaria tener a alguien que me guie y me ayude en esto. Te felicito por tu post y por lo que tu has logrado hasta ahora.

Great article. I have a noob type of question......."Someone who has $1000 worth of SP can send about $75 of income per month. (10 votes of $0.25 per day) That's 7.5%!" These 10 votes I assume are to other people - so how does this amount to 7.5%.....surely the return is based upon how well the upvoted article does, and how long after the post was published' it was upvoted. Or am I getting it all wrong somewhere? I understand the blockchain eco-system has generated 7.5% extra.

no you are right. This is either to you or others. You can upvote the content you create or make money with the curation rewards (which become substantial as you power up more and more). I figure that if you combine the votes coming from other, one would get at least 7.5% a month. But it is far from easy to calculate since one cannot upvote his own post (1 a day) and 9 comments a day only without having some for of backlash for not spreading the love.

Thanks for the clear and concise delivery amigo :-)

Voted up and Resteemed. Great stuff. Thanks.

Thanks for thinking out loud here, @cryptoctopus, I want to learn as much as possible about Steempower (and voting power, too, but that's a different topic :))

I understand that SP is the most important thing here on Steemit, so the main goal should be to accumulate a lot of it. Add to that the annual interest of 9.5%. I actually bought some, to make my votes worth more and also because I believe that Steem will rise. So this is basically one of my savings accounts now.

I also understand that my Steem power is linked to my voting power, which I can now manage and influence with a slider. I have not understood how it helps me personally, to influence and increase my own earnings, though (and I don't really want to upvote myself ;) )

+++
Btw - tiny mistake:
Let's say you put $1000 in an ICO and you make a 200% within the 2 weeks. You come out with $2000.
Actually you come out with $4,000... 100% profit on $1,000 would make $2,000 :)

There is no annual interest rate of 9.5% on Steem Power. 9.5% was the starting inflation rate of the network after hard fork 16.

There is interest on Steem Power but it can't be accurately measured as 'percent annually'. Right now it is close to 1.5% annually in effect, but that changes based on how many people are holding Steem Power vs Liquid Steem.

Very well written post, I love it!

I just started with the whole cryptocurrency world just a few months ago, I've not yet put any money in steemit, but I try to get as much SP buy just curating and stuff.

Instead I use my money on SIA, Ripple and IOTA, maybe next month I will spend some on SP as it's really gonna BOOM! I think.

The only problem I currently have with all crypotcurrencies: How are they gonna get taxed by the government when u earn them?

@cryptoctopus in my opinion, for a newbie it's better to buy steem power first and then indulge in authoring and curating. Reason is that if steem power is less then visibility is less and viewers may not be interested in commenting or upvoting posts. There are many people who upvote and comment for rewards. So if a newbie invests on steem power then people will flock to upvote and comment for getting rewards. But in the long run, good authors and curators and big investors will win. I guess that ok if authors and curators are getting paid for Thierry hard work. Everyone is happy. This is my opinion only sir

The value of steem power is one of the best investment opportunity, it not only give you an immediate return on cash, but also gives you influence on a great growing groundbreaking community, a community that may be the new standards for future social media and economics revolution... If i had more money, i would not doubt it on powering up a good portion of my savings... Imagine how much will your steem power worth when steemit goes mainstream and millions of users arrive to the platform?...

It really is a no-brainer. Instead of investing actual capital, we produce our own value which goes to work for us. It's a beautiful system for those that have very little to start with.

Good post and very accurate. Cryptos and something like steem offers a uniqe opportunity which we could not easily find anywhere else. I think stuff like steemit is the future of social media meets crypto. When I came here I saw the potential as long term investment which is much more practical just like you mentioned. Glad to see others thinking this way.

Luar biasa, aku telah mengikuti mu kawan...

Pleasure reading this. Amazing thoughts. Will always support u. @crptoctopus

Good

Great post man, very interesting read. I am quite new here don't have a lot of Steempower but hopefully will grow over time, I have some new ideas and plan to make some posts with soon. Any profits if any that I do make here will be investing back into SP

  ·  2 years ago (edited)

I essentially did the same. Any profit in sp goes into sp, but all my sbd is sold on exchanges for other alt coins i believe have potential.

Advantage of Diversification + no fiat investment of my own.

Still new though, so gotta see how much I'm able to put in into crypto markets before deciding whether or not to invest Fiat currency

Thanks for your post! It helps man

hello~ nice to meet you^^
i followed you^^

It means this is value for money where.
If I put $500 of Steem power I will get approx 7.5% of interest but in some cases I have seen that people are having more than $500 in single post and their STEEM POWER is 100 . Yeah just 100.
How's that possible.
But I'm glad you shared such informative post with us. @cryptoctopus

other people are voting for them. Your SP only define how much you can upvote...not the reward you get when other people are voting for you.

Very thought provoking...well done. Resteemed.

Great Post. Interesting topic. I enjoyed reading this.
Followed..
Upvoted...
Resteemed to spread your precious experience and knowledge.
Thanks for posting such a helpful knowledge.

same here bro

lol

source: Giphy

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wow very impressive. Thank you for sharing your knowledge. Are you sure $1000 pays .25? I think it is half of that.

Cashflow first, and then Capital Appreciation ;)

Seriously, I underestimated Steemit and Steem Power. Now, I only wish that the eyes of my understanding had been enlighten long enough. Hopefully, I would'd made myself small smart fortune.
Great post by the way

I think it's a no brainer to invest in Steem Power. I put everything I earn through steemit straight into steem power and I add my own cash a couple of times of week as well where I can afford it. I think over time this platform is both a means of cashflow and a means of appreciation. You keep gaining interest and accruing the benefits of steem power while also accumulating cash flow through upvotes and followers. I wish I had come across this platform a year earlier but alas I'm starting now and making my ascent lowly but surely.

Thank you so much for the informative post ! Thank you so much for your effort !!

@cryptoctopus
get success for you
I am your loyal followers
@putrakhan

I think your comments are spot on and intriguing way to view Steemit. I would one other very real value comparison. As we can see the market has it's cyclical performance. Every 7 to 8 years , it seems to correct or revalue itself based on economic realities. So...if you were making such a decision today, why would I get into an overpriced market for "dividend sake" and see my portfolio value shrink over the next 2-3 years if there is indeed a correction. Especially, if one were to chase yield. The higher the yield , the more risk involved (which is the reason they have to entice with a high yield). Just some thoughts.

I like your your numbers:
"Someone who has $1000 worth of SP can send about $75 of income per month. (10 votes of $0.25 per day) That's 7.5%!"
I was thinking same way, I ve just never counted it so clearly. Thanks for that, I dont know to clear up anything for you, I can just tell you that with your sentences about how you reward generously good comments you make me read it all and really think about what I wanna say :) Bye

Very valid points made here. The thing is, we are in the year 2017, and people need to realize that we are not in the era of 50 years ago. Times are changing and there is a lot of money out there available for anyone to make.

Awesome post :)

I actually cover a lot of these concepts in my content. I have a confident feeling you might just enjoy a few reads :) Let me know what you think @CryptOctopus. I want to attract as many like minded people, such as yourself, as possible.

Also, just my opinion, but you really should post some more content a lot more often. You have incredible potential. You have 3000+ people waiting to hear what you have to say, who all value your opinion! Let's do this brother! I am as of today, 13 days into Steemit. Not going to stop here!! Let's do this brother! I hope we are able to connect :)

Hi, not much to contribute to the discussion. Just wanted to thank you about this post. This, and the comments helped me to get a deeper u derstanding of steemeconomics. Followed :)