How To Increase The Value Of Steem - The Ultimate July 4th Strategy!

in #steem4 years ago

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We all saw the other day, what happens to the value of our posts when the price of Steem increases; it was good, very good. For those of you who didn't realise, Steem rose by about 30% and so did the value of our blogs.

This is obviously a good thing for anyone writing on Steemit, especially as it happened so close to the Independence Day, July 4th payout. Woohoo, we're all going to be rich right?

Illusion

It can be said that life, is a series of functioning illusions, which help us approximate, what the hell is going on, which in turn helps us to navigate our lives. From the way your brain processes light, sound, colour, movement and a lot more, is just an approximation of the way things actually are.

These illusions aren't just perceptual, they are conceptual as well, like for instance the value of money. If you go back 100 years or so, the paper and non-precious-metal, money that was being spent, was based on the gold standard. This meant that the paper in your hand, represented a proportion of the gold held in the country's gold reserves.

Around 1933, the American President, announced that Dollars would no more be held to the gold standard, probably about the same time people were realising that there was much more money floating around, than there was gold.

Before this point, it could be argued that money wasn't illusory, that it had a very real value, however since then, you can boil down its value to, supply and demand.

If more people want dollars, or sterling, or euros, than are available on the markets; then guess what? The price goes up, if there are more people selling a currency, then, you guessed it; the price goes down.

Steem Power

July 4th is looming, it is happening on Monday, the big Steemit payout, there will be no doubt, many Steemians, including myself, who will want to realise the 50% they are getting of their blog value into cash. However this may set up a very unwanted scenario.

Because if $500,000 worth of Steem is suddenly available and there are only $50,000 worth of buy orders out there, then the price will fall and it will fall dramatically. In this scenario, you could see the value of your blog and therefore your Steem Dollars halve.

How can Steem Dollars halve when they are always worth $1?

Steem dollars are made up of Steem tokens, this is the way that the SD is kept at 1 USD. So if 1 steem token is $0.50 then it takes 2 steem tokens to make up a Steem Dollar, if they cost $.025 then it will be 4 Steem tokens to the SD.

There are 21 times more of Steem tokens than Steem Dollars, this means that Steem could fall to a price of under $0.05 and still be enough to peg the SD to the USD. However the more tokens that are needed, the less Steem is worth, which in turn affects the value of our posts.

Holding Strategy

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For me what needs to be done, is we need to hold off on selling our Steem, straight away, I'm NOT saying don't cash out. By all means, take your Steem of Steemit and stash it on the Bitrex exchange, however, don't try and sell immediately.

The reason for this, is we want to create a demand that is bigger than the supply, in other words we want to keep things just as they are. At the moment, it is very difficult to purchase Steem, as there is hardly any available, that isn't being held by us.

So hopefully, there are lots of gagging traders out there, who want in on the action, what we have to do, is keep them hungry.

So even if it's just for 12 hours, don't put out your sell orders, the more people do this, the higher demand will go, the higher demand goes, the more your Steem will be worth.

For me the ideal time is no less than 48 hours, in that time, Steemians will be reporting back to the wider world that they've been paid and that Steem is great. As they come, the demand will rise and rise, but the supply will still be short, slowly rising, getting people salivating, perspirating, dying to get their hands on Steem!!

Moving On

If this happens as such, you might get some of us, in fact you WILL get some of us, reconverting back to Steem Power because we realise that cashing out might not be in our best interests.

Remember, the payout is taken from 10% of the market cap, at the time of writing the Steem market cap is $16 million, with a market volume (how much Steem is being traded) of just $4,458.

So come July 4th, if it stays roughly the same, there will be around $1.6 million, worth of Steem in our pocket. If we all try and sell at once, then the volume will go up from a few thousand to over one million. Just like when you go to buy something and they say get it while stocks last, they are trying to conceal from you that there are shit loads of their product, because that devalues it in your mind.

So people need to know that there is over a million dollars woth of Steem out there, but the volumes are relatively low. Then pow over the course of a week or so, we can keep the price of Steem high and what's more, peak the interest of would-be speculators.

Game

Of course you could be reading this and thinking "yeah right, you just don't want me to sell my Steem, to clear the way for you to sell yours."

There is absolutely nothing I can do or say, that will shake that thought from your head, because that is classic game theory thinking. Do it to others, before they do it to you.

You're right, you shouldn't trust me, as I might be trying to game you, however, you know this is a good idea and makes perfect sense. So what should you do? You should put buy orders for no more than 25% of your bounty.

What does that do?

It enables you to tell the story of how you joined Steemit, wrote, posted and voted for however long and then got paid, in real cash. This story will spread and people will come to Steemit and speculators will go onto the exchange.

When a speculator comes onto the exchange and sees that only $400,000 of a potential $1,600,000 is on the market. That is going to make the speculator want more; this will be our equivalent of shouting;

BUY NOW WHILE STOCKS LAST!!!!

We are the custodians of the supply, let's create demand together, we've stood together for this long, let's keep it going through July 4th and beyond.

And remember.....

Together Our Steem Power Is Unstoppable!

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Till Next Time, Keep Steeming, Keep Dreaming.

Your Friend,

CryptoGee

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Everybody should be also aware that an interest is paid for Steem dollars if you hold them. That's what I'm planning to do, unless somebody is selling something nice for SD or I want to tip somebody.

Einstein believes in compound interest – maybe you should too?

Good point, another reason to hold fast :-)

CG

The rewards are in STEEM Power and Steem Dollars. More than half of the rewards will be locked up in STEEM Power (half of content rewards are STEEM Power and all of curation rewards are STEEM Power). That's my understanding at least. If that is correct then only 25% will be in Steem Dollars.

No liquid STEEM... therefore there will be no immediate ability to trade on exchanges with STEEM on the 4th.

Steem dollars take a week to convert to STEEM if not selling them directly. Any market action would therefore take place on the 11th. The Steem market cap that affects the Steem Dollar allocation are the prices this week.

Steem dollars take a week to convert to STEEM if not selling them directly.

What? This is the first I've heard that. Any references or links for that painful detail?

Only when converting to liquid STEEM. SD can be traded directly when the token is itself tradable on an exchange.

Thanks for that Gavvet, I did originally put 25% but didn't want to confuse people, thanks for the info on Steem and SD as I'd forgotten that.

Still though, we want people to hold

CG

Might be worth adding support to the token before the payout as well, ignite the fire !!.

The other thing to consider is that 50% of rewards to top level post goes to curators; that payout is made 100% is Steem Power the other 50% goes to content creator in the form of 50% Steem Dollars and 50% Steem Power. this means that 75% of the 1.6 Million (base on current cap and 10% distro) will be added in Steem Power; this will push the price of voting power up substantially at the moment it cost 186 STEEM p/ Million Vest's that is ~0.06 BTC/ 44 USD

Thank you for this very engaging article. Every little bit helps :)

You know, you could have used that opportunity to trade and get some huge profits.

eg, Be one of the very first people to sell all your steem. *say you sell 50,000steem for 50btc. After a while, once the value of steem drops, use that 50btc to buy 70,000steem.

I just don't see how there isn't a win.

First of all, hindsight is a wonderful thing, it's easy to say, "you should have done that" after the event. Second of all, when I wrote this article, power downs took 104 weeks (2 years), so what you're saying wouldn't have been possible.

Cg

Very good post @cryptogee Just one question:

So the value of each post fluctuates depending of the steem price in the market?

Btw: could you explain in just a few words where does the money come from? I've read a lot about it but still don't know how to explain it to people who doesnt even know what blockchain is. It would be great to have an easy understandable explanation.

Thanks in advance!
Amín

Two things cause fluctuations, other overall votes (dilute votes before them) and fluctuation in STEEM market capitalization. Steem Dollar payouts are always based on a percentage of Market cap. Once payout occur daily these things will be less noticeable.

Will it be less noticeable because the Steem will be more spread out?

CG

we have seen the fluctuations over 2 months which have been wild, in future it will only be as long as up to 24 hours after the last vote for the payout to occur, a lot lest time for fluctuations to occur.

No problem @nolimit,

Yes that is the case with the Steem price, but you only tend to notice when there have been big moves, think of it like this;

If you have 10,000 Steem and each is worth $0.25, if the price goes up to $0.50, then your Steem is worth twice as much and you need half as much to make up the same amount of Steem Dollars.

I shall explain where the money comes from in as few words as possible, but I'm assuming you know what cryptocurrency is to make the explanation shorter.

The money comes from the cryptotoken called Steem, the Steem has been 80-90% premined and then given to Steemit. The Steem blockchain then dissemenates the Steem using an algorithm to determine who gets what, by way of voting and such.

This is why when you start an account you have 10,000 Steem, approximately worth $3, in the future, I imagine this won't happen, as this Steem has come from the original mine.

In the future, the money will come from the fact that Steem is being traded, like any other digital currency, so it's value will fall and rise as such.

Also there is the other 20% which is getting mined and so new Steem is coming onto the market.

There is more to it, but I think that's all you really need to know, as it gets hard to keep the language simple after that. I freely admit, that this is because I don't fully understand it past that point.

But if you have a head for finance and maths, then I suggest reading the white paper, which you can access by mousing over the 3 bars at the top right of the screen.

Cheers

CG

If the value of steem went up, how come the estimated value in my wallet went down?

This is what I'd like to know as well, I have the same amount of steem power but on a day where steem rose 4.something% in value my personal holdings went and dropped 30% losing about 100$ in value. Not to stoked on that, plus there was apparently a rise later on? I haven't seen my my valuation go back up though so.... I don't know what's going on.

You have to factor in dilution, as people who voted on your posts vote on others, the vote they gave you, dilutes.

The effects of this are felt less the more Steem Power you have, so a whale like @dantheman will dilute a lot slower than a newbie.

CG

Hi. I'm new to steemit and I am not a coder / hacker by any means.
I am trying to figure out how to master Markdown, but so far I can not even figure out how to add a picture to a steemit post. Does anybody have any insight?

You can add an image with the following syntax:

![text to show](URL to your image)


![this is a test image](https://3s1shj19s0di2dovmhkw15h1-wpengine.netdna-ssl.com/wp-content/uploads/2015/07/broken-bitcoin.jpg)



Here is the image based on the code from above.
this is a test image

Hi, read this article it will explain all Format Your Article And Gain Steem Power!

Thanks
CG

Its gone down again, it was at 18 million

the value of my posts is still up though

Values on steemit use one-week weighted average price feeds, so changes may be smoothed and/or delayed.

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