Steem's Market Cap, Money Supply, and How To Calculate Your Slice of The Pie

in #steem8 years ago (edited)

Your Steem Power is like owning a slice of Steem's market-cap (or like shares in the company)

As Steem's market cap grows... so does your slice of the pie!

Here's how to figure out what your "slice of the pie" is worth:

Step 1 - Go to https://coinmarketcap.com

Step 2 - Apply This Equation:

Your Steem Power / Available Supply = Your Percentage

Step 3 - Then apply Your Percentage to the current market cap to see what your Steem Power (your slice of the pie) is worth.

Example - let's use 3 Steem Power (SP) since that's the amount everyone starts with right now

3 (SP) / 114,926,045 (Supply) = .00000003 (or .000003%)

.00000003 x $170,265,234 (Market cap) = $4.44 US dollars

Therefore your slice of the pie (your 3 SP) are currently worth $4.44 US

How Much Could Your Percentage Be Worth in The Future?

Here's how your 3 SP slice of the pie would grow in relation to the growth of Steem's market cap (assuming you can avoid dilution which I'll talk about later).

(Edit: correction, bitcoin's market cap should be on the 10 billion line of this chart)

This means that if Steem's market cap reaches the size of Facebook's current market cap, then your 3 SP today will have grown to be worth over $10,000 US (provided you can avoid dilution).

The Magic Rule for Avoiding Dilution:

For every 9 steem that are distributed into your Steem Power account (sorta like interest), you have to earn 1 steem to avoid dilution.

Again... For every 9 SP that magically appear in your account... you have to earn (or buy) 1 SP

"Avoiding dilution" just means... making sure your slice of the pie doesn't shrink.

(I'm not going to go into the intricacies of dilution here, since lots has already been written about it. This is just a simple rule for any user to use in order to see if they are avoiding dilution or not.)

Let's break it down further:

If you have 3 Steem Power (SP) right now, your SP will naturally grow over time (without you doing anything) as new steem are created and distributed. By the time your 3 SP grows into 12 SP, you will need to have earned 1 SP through posting and curating content in order to avoid dilution.

Avoiding dilution is easy for minnows, hard work for dolphins, and basically impossible for whales.

Minnows can easily grow their slice of the pie, dolphins have to work hard to maintain it, and whales have to share their piece of the pie in order for Steemit to grow.

This is the beauty of Steemit... it pushes everyone's piece of the pie towards the middle.

So if you're just joining Steemit now... keep in mind that the more you can grow your Steem Power through posting, curating, or powering up... the bigger your slice of the pie will be.

Sort:  

Also probably worth mentioning... I think your number is actually right, but its interesting to note that you can also figure it out from the opposite direction as a percentage of new steem power.

You simply have to earn X% of new steem power where X is your current marketshare of existing steem power.

It is easiest to see this if you assume we start with 100% marketshare of SP. How much of newly created steem power must we earn to keep our 100% marketshare. obviously 100%.

This is an OK post overall. that said, i really really wish people would stop confusing crypto currency marketcap with corporate marketcap... they are two entirely different things. Comparing FB's market cap with steem's is like comparing apples and oranges... or comparing apples and something thats also called apples but its not afruit and its not like a fruit in really any way whatsoever.

coinmarketcap.com has an outdated supply number, they probably update once a week or something. steemd.com shows total_vesting_fund_steem is about 125 million. So one formula to calculate one's share is

(Steem Power) / total_vesting_fund_steem

or, if you have your Steem Power expressed in VESTS:

VESTS / total_vesting_shares

1 billion is the size of bitcoin's market cap? I think you mean more like 10 billion. Also, why does everyone refer to the shrinking slice of the pie as dilution and not inflation?

You're right, I meant 10 billion. Thanks for catching that mistake, I put a correction note under the chart.

Your right, work hard and you'll be rewarded.

It would be awesome if Steemit got to Facebook's current market cap. Yet, that's a pretty big number. What is the projected growth rate for Steemit? Is it going to take one or 20 years to achieve the same market cap as FacebooK?

Coin Marketplace

STEEM 0.17
TRX 0.13
JST 0.027
BTC 61297.02
ETH 2687.45
USDT 1.00
SBD 2.59