Full disclosure: I'm a dummy when it comes to anything. In order to understand a concept, first I have to simplify it as much as possible to get my head wrapped around it. I need to see the big picture, or else the details are going to be Greek to me. In that vein (if you're like me), greetings fellow Dummy!

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THE BIG PICTURE

This pie chart below illustrates the payout ratio between the author of a post/comment, and the curators. A curator is simply someone that upvotes a post. 75% of a post payout is guaranteed to the author, and the other 25% is divided between the upvoters based on when they upvoted, and for how much.

Details on the intricacies of curation rewards will need to be explained in a future post, or other posts already out there on the topic.



So the next step is to figure out how much you will make on a post as an author.

So I'm looking at my Blog and I see that my super amazing post is getting $1000.00 payout. (stop laughing)



So how does this $1000.00 payout get broken down?
(this is where people's heads usually spin)

First, there is a difference between Steem Dollar payout, and Steem Power Payout.

Historical Lesson:
A Steem Backed Dollar (SBD) was originally meant to be pegged to the US Dollar. It is a debt token that was supposed to be exchangeable at any time for $1.00 US Dollar of Steem. The way you would cash out your SBD was to convert it to Steem over a 7-day process. You would get the equivalent of $1.00 USD worth of Steem per SBD, based on a 7-day rolling average of the US Dollar price of Steem. The conversion time period was shrunk to 3.5 days at some point, and that 3.5 day rolling average is still in effect (more on that in a bit). The conversion system is now deprecated.

These days, you can simply use the built-in Market to trade for Steem, or transfer your SBD to an exchange like Bittrex (although technically you are just sending SBD to their Steem wallet, and they credit your exchange account with that SBD).

These changes to the liquidity of SBD have made the US Dollar Peg impossible to maintain at present, and SBD printing is now adjusted by the miners (aka Steem Witnesses) to regulate the supply, and therefore the value. While some question why we still need Steem Backed Dollars, it is important to remember that Steem Power is not liquid, so if you were only paid in Steem Power, services like @minnowbooster, @steemfollower, and others too would be knee-capped.

So with that out of the way, assuming the author chooses a 50%/50% payout option, here's another pie chart that shows how things will be broken down further.

Because Steem Backed Dollars were pegged to the US Dollar, Steem still pays out SBD in a 1:1 ratio. It does not matter what SBD is worth on the open market in USD. So, let's update our chart:



At this point you might be asking, "wait, Curators aren't getting Steem Dollars, so how come I'm getting 375 Steem Dollars and not 500?" Well, as the pie chart shows, the author gets 75% of the total payout, and if divided between Steem Dollars and Steem Power, you divide that 75% payout in half, which would equal 375 Steem Backed Dollars in the case of a $1000.00 post reward.

So, that is the easy part. It also explains why on Steemit.com when you click on a post payout before the 7 day payout period, the "pending Payout" is wrong for both SBD and SP payout. The hard part is next.

To calculate our Steem Power payout as a post author, we first need to get the 3.5 day rolling average US Dollar price of Steem. We can find that number on Steemnow.com. I've drawn an arrow on the top right corner to that number, and if you click on that number a chart will drop down to show how that number is calculated.



We can see that the 3.5 day rolling average price of Steem is currently $1.97 USD. So while Steem might currently be trading on the open market for $1.51 USD, the 3.5 average takes time to catch up (or down, in this case), and reflect in the Steem Power Payout for authors.

So the rough formula to get your Steem Power payout as an author is:

SP Payout = (Total Post payout x payout percentage) x (payout ratio) ÷ (3.5 Day USD Average Price of Steem)

payout ratio is whether you choose 100% SP, or 50%/50%
payout percentage is whether you are an author or curator

In our case, this would look like:

SP Payout
= ($1000.00 x 75%) x (50%) ÷ ($1.97)
= 1000 x 0.75 x 0.50 ÷ 1.97
= 190.355 SP

Let's update our chart:

I should point out that Steem Power payout can be quickly calculated if you round numbers up or down. If the 3.5 day rolling average of Steem is worth $1.00 USD, you would get equal payout in SBD and SP as an author for the 50%/50% payout option.

Questions:

"What if you choose the 100% Steem Power payout option as an author?"
Simple. The formula is the same, except that the payout ratio is just 100% (or 1.00).

"What happens if the price of steem drops below $1.00 USD?"
Again, the formula doesn't change, but you would be getting more Steem Power than Steem Dollars if you choose the 50/50 payout. Remember that the open market value of SBD does not impact how much SBD you get as an author.

"What about Curators?"
Yet again, the formula doesn't change. You simply change Payout percentage to 25%, or 0.25

On that note, let's update our pie chart again, based on a 3.5 day Steem average USD Price of $1.97:

And here's how the pie chart would look if the author chose 100% SP reward, based on a 3.5 day Steem average USD Price of $1.97:

Finally, let's say the price of Steem dropped to 10 cents. I know that's unlikely, but let's just imagine:
(here's both charts)

• 50/50 payout if Steem was worth 10 cents
  

• 100% SP payout if Steem was worth 10 cents
  

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So I think that wraps up how Post Payout's work.

If you would like to see a great breakdown of your future post payouts, @dragosroua has made a handy tool called Steem Supply. Just type steem.supply/@yoursteemaccountname into your web browser, and wait a few moments for the website to query the blockchain for your information.

Thank you for reading. If you want to know more about how curation rewards are split between upvoters, there are a lot of posts out there that explain it well enough.

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Want to make money while helping to clean the garbage up on Steem? Report plagiarism, theft, tag abuse, comment spam, post spam, and other Steem abuse that degrades the Steem Platform to @steemcleaners with their reporting tool. If you provide good evidence, they will investigate and deal with the abuser. A week or two later they usually reward you in Steem Power. It's a win-win for everyone, just don't abuse the abuse reporting tool itself.

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Tip Jar:

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As always; good luck, good wealth and good health to everyone on Steemit. Stay positive towards others and help the community grow. Thank you for reading and sharing. Comments are always welcome.