It's time to SELL SBD instead of powering up

in steem •  2 years ago 

From my understanding, when you earn rewards and choose the 50/50 option, the SBD you earn is always valued at 1 USD, regardless of what it actually sells for on the open market.

When SBD and Steem were BOTH trading at approximately $1 USD and your article earned $10 (let's forget about curation rewards for simplicity sake), you would earn
5 SBD and 5 Steem
$5 + $5 = $10, for which you could then trade your 5 SBD on the internal market for 5 Steem and power up with 10 SP.

However, if we now assume BOTH SBD and Steem are trading at $10 USD each (which they are close to now), that same $10 earning would be paid as
5 SBD and 0.5 Steem
$50 + $5 = $55, for which you could then trade your SBD on the open market for $50 USD and the 0.5 Steem for $5 USD for a total of $55! If you were to buy Steem with that $55, you would only get 5.5 Steem or SP!

Sooooo...

For those of you who are trying to grow your SP, this is NOT a good time to do so.
I must admit that seeing those large numbers in your potential rewards notification LOOKS great, but it isn't so great for growing your SP.

If you are like me and want to grow your SP, it might be best to hold your SBD as SBD until things change. I'm hoping SBD stays high and Steem drops so that I can exchange my SBD at an advantage over the near 1 to 1 ratio.

Of course, it is all speculation and if Steem stays high while the SBD drops back to $1 USD, I'm in trouble! That would mean I need to pay several SBD just to buy 1 Steem!

SellSBD.jpg

For those who have SBD they want to cash out, this might just be a good time to do so. I'm hoping that a huge sell-off won't cause the SBD to drop or I'm actually shooting myself in the foot by posting this!

If only we could see what the future holds!

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O am frozen man, don't know if power up or sell hahaha!

Trust build trust!

I'm hodling but not powering up...
IT is maybe stupid because i am not escaping while the price is high (with seems not to hold... ) neither using it to benefit others with increased votes...

Pumps are never good at least before it was only one that got pumped now its one after the other.

Maybe it is time to look back at trading your SBD for sTEEM or the other way around, if we start a volume of internal trading we might drive interest into it, if we stop the bleed to FIAT and BTC they will hold at a bigger price...

Even more use the internal market the fees are tiny, but look at the bandwidth use.

To be honest, I think that putting it into SP is always the best (at least for now) unless you have so much that you can afford to play along with the big boys and buy / sell with the tide. I was holding my SBD wondering what to do when I could have traded it 1.7 to one. I decided that as long as you get more Steem than SBD, then you are winning, so made a decision and sold the little I had at 1.2 to one for Steem and powered up. I'm worried that the SBD might go back to being $1, but Steem may never go back to $1. Then it will cost more SBD than the Steem you get for it. Think how hard it is for a newbie to grow if every Steem costs 4 SBD or more!

I've been powering up with sbd and will continue to do so but your point is valid! However, I feel Steem will stay quite high as it has already fallen around 12%. But the sbd value could increase very thus decreasing the ratio. All is speculation and I'd prefer to stay safe with my Steem!!

I'm hoping Steem goes up, I recently bought 1btc worth of it to trade and I might use some of it to power up if it increases a lot!

I wanted to buy Steem long ago (when it went up to $4 months ago) and found too many obstacles in opening an account at an exchange, so skipped the idea. Now I'm hoping to be able to earn enough to become viable (get past that struggling stage). It feels as though I'm about to break through.

i bought steem at a bad time LOL
it fell from around 7USD to around 5.50 USD now haha
but hey, you win some you lose some
I believe in Steem and I might keep some more of it to power up :)

Thanks this was insightful. I'm such a minnow that I barely comprehend the differences in SBD SP AND Steem.... so this broke it down nicely

I'm always happy to help people understand and learn things. Thanks for reading my post!
In case you don't know of its existence, there is a wiki for Steem that might be a good resource for you.
https://www.steem.center/index.php?title=Main_topics

Wishing you good luck and a wonderful 2018!

thanks for the post @happyme. I was wondering why my 50/50 split looked good - until - payout .

I'm still learning. So there's the open market value of Steem, around $7 USD currently. then there's an internal market for Steem Power, worth $??? usd, where do I find that info?

and then there's SBD that's worth around $9 usd, is that an internal market valuation too, that is, it is only exchanged inside Steemit?

I can see that I still have lots to learn

Thanks for reading and responding to my article.

an internal market for Steem Power, worth $??? usd, where do I find that info?

If you click the little arrow next to your SBD amount in your wallet, a menu pops out and there is a link that takes you to the internal market where you can see what SBD and Steem are trading for (and you can make trades there too). Steem and SP are essentially the same thing, so the price is the same. The difference is that Steem is liquid (available for use immediately) and will not add any value to your out-going votes. Steem Power is locked in (you have to power down to get your steem out over a year [I think that's the timeframe] in weekly increments) so you can't immediately access it and it does add value to your outgoing vote value.

Steem was supposed to be the actual token, whereas the SBD was intended to have a constant value of close to one US dollar so as to make it easy to use as a currency. (You don't want to be adjusting the price of your merchandise every hour or so.) However, the market is unpredictable and the SBD has become way more valuable than anticipated. Both SBD and Steem are traded on the open market.

The internal market is for trading between Steem and SBD and as far as I can tell is a bit slow to respond to fluctuations on the open market.

Steem and SP are simply the same token moved within your wallet. If you are ever hacked, you can lose your SBD and your liquid Steem, but it will take a week for the hacker to get the first bit of anything that is put into SP. That is a neat security feature! It gives you 7 days to reclaim your account.

The internal market doesn't require you to have anything other than your user account and your active key. The external market requires that you provide information about yourself and you need to open a new account with whomever you are using as an exchange. On the open market you can convert between the cryptocurrencies and fiat money using your bank. Having a hardware or software wallet is also a good idea for when you use the open market. It is not advised to leave your cryptocurrencies with the exchanges, so you need to have the appropriate wallet to store the type of cryptocurrency you plan to use. That's why I only have Steem; I don't need my own wallet. Steem makes it so simple to own a cryptocurrency. It's only when I want to withdraw my Steem to fiat that I would ever need to use an external exchange. I'm hoping that by the time I'm ready to pull anything out, Steem is a major currency and I can simply buy everything I need directly with Steem.

If I'm not mistaken, the price of Steem used to calculate your rewards is a 3-day average of the external market price.

wow! thanks for the info - for sure it will take me several reads to absorb all this - very much appreciated.

Many thanks for your good intentions with the drotto vote. According to my calculations it cost you 90 cents to send me 11 cents.

27 minutes ago Receive 0.100 SBD from watertoncafe https://steemit.com/steem/@happyme/it-s-time-to-sell-sbd-instead-of-powering-up

At $9/SBD, your 0.10 SBD is worth 90 cents. My upvote earned

drotto 2.46 % 0.11 $

11 cents, from which I will lose 25% to curation awards.

The only winner there is drotto! You would have made a much greater contribution by sending the tip to me directly. I don't understand why people use these nasty bots that just suck up the reward pool and leave less for everyone else. I and a lot of others think this platform would be a lot better off if people simply stopped using vote bots. Those bots are owned by those with lots of SP and they get richer while everyone else suffers.
Sorry for the rant, but it bothers me to see people getting ripped off like that.

thanks, I appreciate your rant. I was looking for a way to say 'thanks' for your very excellent information and thought I'd give Dr Otto a try, turns out, like you said, that did not turn out very well.

I studied for 3 weeks solid, 14 to 16 hours per day when I first started here. I made lots of mistakes that cost me, so I learned the hard way. I'm happy to help others not make the same mistakes I made. Things keep changing at each hard fork, so there will always be more to learn. Not to mention all the applications that are being written to run on top of Steemit.

Muy buena información, pero también existe la posibilidad que no baje si no que aumente

Sí, lo dije en mi artículo. Gracias por el comentario. Estoy usando Google translate, porque no hablo español.

that is interesting... I had not yet thought about that, seems like sound advice... hhhhmmm

I was looking at the disparity in the reward split and it got me wondering. So I did the calculation in the article and decided I should let others know what I discovered.
Thanks for participating in the discussion.

Yes, the ratio between STEEM and SBD isn't great if you want to buy STEEM.
However, there's no guarantee that STEEM will go down, of course! You could wait for it, but if they go down they might also both go down?

Maybe if you want to hold your SBD in order to buy more STEEM, consider cashing out a bit into something else. Then if it turns out both go STEEM and SBD go down and the ratio doesn't improve, you'll have some value stored in the other 'thing' which still lets you buy a lot of STEEM.

Of course you are absolutely correct, however, I don't have an account with any exchange, so I have no way to get my Steem nor SBD out at this time. By the time I set up an account, it probably will have changed to make it no longer worthwhile. I'm just an old fuddy duddy that doesn't want to get an external account so I miss out on all the great opportunities. I'm stuck within Steemit and am holding out for the long-term. I'm waiting for the day I can just buy stuff and pay my bills directly with Steem from my Happyme account! If I should die first, then my children can worry about how to get my Steem out.

I wish I had SBD to sell but no....that means I need to start writing more to get me some SBD ;D

  ·  2 years ago (edited)

Just as SBD shot up and the ability to buy 6 Steem with just 1 SBD became a reality, I gave away 17.468 SBD to the winner of my weekly contest. How I wished that I could use that to buy Steem for myself! Unfortunately, my sponsor pulled out on me just earlier and I was struggling all week to pay what was promised. I had zero SBD to sell and I was earning just 1 or less SBD per day, so each time I collected 1 SBD, I sold 1 SBD at a declining rate. The first day I got 6 Steem, then 5 steem, then 4 steem and so on until now where it is 1.2 Steem to 1 SBD. As pandorasbox said, I should be taking SBD right out of the system and stashing it as something else until another good buying opportunity comes along.

STEEM started to grow so fast, I thought it's gonna surpass SBD.
But now it doesn't look like it's going to happen soon.

Anyway, that was a good insight.
Don't you think that STEEM being high is good for you as your upvotes have become stronger ?

I really enjoy seeing my votes actually worth something! But since I'm not taking money OUT of the system, it isn't helping me nearly as much as when Steem was low and SBD was high. My intention is grow my SP and at the rate of exchange now I can only buy 1.2 Steem for each SBD. Mind you, I was paying 1.5 SBD for just 1 steem not all that long ago, so it is still pretty good. The big question now is: Am I earning SP faster than before or not? I suspect with bigger votes from everyone, I SHOULD be earning more than before, but since my earnings jump up and down all over the place, it is not so obvious if it is benefiting me or not. For sure I'm earning more SBD than before, but I'm also earning less Steem. By the time I convert it all to SP, I'm no longer sure.

Now it sounds much more worse !
I guess, it can't be helped !

But are you sure you don't want to cash out even a little amount ? All those hard works and no cash in hand ?
In my case, I had to cash out to keep myself from running away from steemit.
But, Now, I wish I had turned those SBDs into Steem power.

Absolutely NO. I do not want to cash out anything. It is already hard enough to get to the Minnow stage. As more and more people join the community, the reward pool gets divided into smaller and smaller rewards, so your growth will get slower. Added to that, each year the inflation rate for Steem is reduced, meaning the supply of new Steem becomes less (the reward pool gets smaller). This will also make your growth slower. When the price of Steem goes up, it will cost you more to purchase it, again slowing your growth. The sooner you gather your SP, the more Steem you have to increase in value when the price of Steem goes up.
Let's say you collect 100 Steem and then the price rockets to $100 USD. You would now be worth $10,000.
But if you managed to collect 500 Steem instead, your account would be worth $50,000. That is $40,000 extra for just collecting an extra 400 Steem. The more you start out with when Steem goes up, the more you gain!

Once you have $50,000 worth of Steem, you can easily take out the $400 and hardly fee the difference. But taking it out early means you really do lose a lot later!

  ·  2 years ago (edited)

If the reward pool gets smaller, won't it affect the curation award ?
In that case, we should rather hold on to the Steem rather than cashing out or powering up, don't you think ?

I think the price of STEEM and Steem Dollar is far from their potential !
It will drop a little bit and then by the end of the year, they will be worth more than now. That's what I think.

Keeping the SBD or selling the SBD, I wonder which is right at the moment !

If the reward pool gets smaller, won't it affect the curation award ?

Yes it will. Overall, everyone gets less. That is why I will not sell and am holding on to every little bit of Steem I get. Powering up just puts your Steem into a safer holding place (and gives you greater vote value). No harm there at all.

Keeping the SBD or selling the SBD, I wonder which is right at the moment !

ONLY if you want to sell or need to sell SBD, then now is a good time. Otherwise, as you said, it will go up more, so hold onto all you have. As for converting SBD to Steem and SP, you can try to guess when to do it, or just do it as you earn it and 'cost average' it. In other words, sometimes you will gain and other times you will lose, but overall, it will average out. If you try and guess, you may gain more or if you guess badly, you could lose more. It is a gambling game.

Yeah ! I hate gambling though. :D

I will take up your suggestion for now. :)

Thanks for the details about SBD & SP. By reading this post I can understand easily about the SBD, SP and Steem.

Glad to be of some help!

This post has received a 2.46 % upvote from @drotto thanks to: @watertoncafe.