Put it away: Why to Power Up a little continually

I am going to have to do the "This is not financial advice, this is opinion" thing here (perhaps ranchrelaxo will upvote me? kaboooom!) as like anything future based, this is speculation. This is also not an in depth look at the mechanics of how Steem works, just a basic idea.

The reason I am posting this is because it seems to have helped @tezmel get a clearer understanding of why powering up is potentially important. I had said to her in a comment to 'put some away' and she asked for clarification as to what I meant. I explained and she said it would be good for others also.

Many people are critical of me not taking into consideration the life positions of others less fortunate than myself as if I live in world of privilege and fancy. I am not blind, nor am I inexperienced with personal hardship and it is because I am thinking of people in hard situations I do as I do and will continue to do so in a way I think will eventuate in less suffering for as many as possible. Not just now, but in the future.

I have mentioned before that some people use this place like an ATM without powering up but, as prices increase so will competition, as SMTs arrive, so will more pressure on price. As mainstreaming takes place, the taps will close and all but dry up. What will be left to distribute from the pool will be STEEM POWER holders. People think it is hard to get noticed at the moment but, this is just the start.

People also think that the small amounts that allow them to survive will continue on or, they can just use bidbots to 'earn' more. The small amounts will become smaller, the bidbots riskier or, with a small tweak of code, gone faster than they arrived. Those who are using them and not powering up some of their gains are going to potentially kick themselves hard.

The reason that it is so hard to earn now is combined with the pool being largely commandeered by maximizing bidbots and circlejerks, there are very few accounts powering up enough to be able to support others. A 100 SP vote is worth 2 cents, a 100 of those add up but, the *vast majority of users here have much less than 100 SP and many don't have much more than the 15 SP Steemit Inc provided them for bandwidth. Many have even less as they have created alts with 2 SP... Good job people, good job.

So the goal is that when the taps close, there are enough people holding enough SP and able to support others. If you look at the chart on the post from yesterday, that is not enough people at any of the tiers and way, way too many people in the 0-100 category needing/wanting support.

But, i am getting off-track a little. So, what I did for @tezmel in regards to the clarification of putting some away was to breakdown a scenario as to why powering up is useful, even in small amounts. Putting some away means to save a little for the future, a rainy day or hopefully in the case of STEEM, a very sunny one.

Let's say there is a 10 dollar payout after curation
(both at a market rate of 2.50 to make it easy)

paid: 5 SBD / 2 STEEM (=5 SBD)

5 SBD has a value 12.50 US /the Steem has a 5 dollar US value

assumption: 2 years from now the hope is that Steem is ~50-100 dollar value each.

So, you have 2 steem but, with the SBD you can buy (in this scenario) 5 more.

That means that if you exchange all to steam you will have 7. That is a future price of (at 50 dollars) 350 US. Not bad on a 10 dollar payout, is it?

But, you need some money right now to live.

Instead of living off all of the 5 SBD, live of for example, 4 and buy 1 more steem.

That means you will have 3 steem with a future value of 150 dollars and 10 dollars US to spend now.

It also means that your account is growing faster and in 2 years when there is potentially that 50 dollar steem, your vote will be quite valuable and you won't need to worry as much and can also support others. It is a risk of course but, the payoff could be enormous for you. People are selling their SBDs for 2.50 when they could invest into Steem and potentially have it worth 20 times that amount in the future plus use it to earn and support others. So, if I was in this position that I needed it, I would try my hardest to not need all of it and I would power some up for the future.

In that future, a vote would be able to sustain others on the platform to do the same. But without SP, you are always going to have to work for every dollar and can't support others as well as being vulnerable to various influences like competition and code changes. This is a big part of the issue.

Support is low for so many because people aren't powering up enough to be able to support others. Currently, 100 Steem is a 2 cent vote but that is a 40 cent vote at about 50 dollar Steem. Does 4 dollars a day make a difference in your life? What about the effects on your real world community? Does powering one STEEM down for 50 dollars help more in 2 years than powering one down now? Most people only have the delegation Steemit gave them but fail to recognise that as prices increase, that will decrease further or just disappear.

There are many places where a dollar a day makes a difference but this means that working even slowly towards holding potentially valuable SP can make an enormous difference. 100 Steem at 3 dollars can help some one for months but, 100 Steem at 50 dollars can help them for years. the goal is to get to the 50 but that future value will only be accessible to those who hold Steem, those that have some stake on the pool. Those without are going to have to keep working and hoping for the favour of others. I don't want that for people, I want as many as possible to be able to support themselves and their communities as possible.

People who want better futures for themselves need to start building it now and there is always risk in this since the future is not yet written. However, the future of Steem looks much brighter and healthier if people invest even small amounts into their SP if they can, when they can. The small steps and personal investment build the community, create the engagement and raise the chances of long term success also which back the investment and help it grow.

Steem was not a revenue possibility until recently and for many, until very recently yet, people are already relying on 100% of their rewards here. Struggle just a touch more and rely on 80-90% instead and power that little bit of SBD up. I am pretty sure that Steem will eventually rise significantly but, I can't say if SBD will go up or down. Just remember though that SBD is supposed to be always be valued at 1 US dollar. What does that mean?

Well, under 'normal' circumstances, the ratio that people think is bad:
1.4 SBD : 1 STEEM would be 2.5 SBD : 1 STEEM

My very long-winded way of explaining things that many might see as basic or unnecessary is because like @tezmel mentioned, she had the feeling that it takes large amounts to invest and have any real significance. This is similar to the guy that thought 10,000 bitcoins to buy 2 pizzas was once a bargain. Yes, there is risk as I keep mentioning but, there is a future to think of and that takes work and investment into it. Here we are lucky because even though we might not have the real world collateral to put in, we can earn it on the platform. But, this isn't going to last for everyone forever.

At least, consider powering up a percentage of what you get, and that includes the people using bidbots. If I did boost my posts, a percentage of the earnings would be going into SP at every payout so one day, I might not need to rely on the bidbots to earn at all. And if they disappear, I can still survive.

The current health of the platform is not great but, it isn't going to change until there are enough people holding SP to distribute. That chart shows there are not enough willing participants yet. It is going to take a healthy range of people to grow at all tiers and remember that even if you have zero today, 2 years from now there is the potential to be able to help many, as well as yourself. I am now aiming for that two year point in my approach and you can do as you please also.

@ranchorelaxo? Anything? No?.... ok.

Taraz
[ a Steem original ]