Steemonomics: Earn low, Play high

Some people have the Steem investment process upside down as they disappear when prices are low, and reappear when they are on the rise. While this strategy works for those who are remembered from some bygone era and their auto-voters, most people are likely not going to benefit much, at least in Steem terms.

When prices are low, accounts tend to consolidate their votes and narrow their spread. With things like the dust threshold, many who can't pass it will skip voting on comments at all as they don't want it to go to waste. People also tend to try and increase the value they place on votes, meaning they add a higher percentage.

I have covered this before but Stake is stake and the draw on the pool it has is the draw it has. What does affect it is how much other stake is drawing on the pool. This means that when there are many people selling and less people posting, there is less draw on the pool and, there is less competition on the posts. It is a win for people looking to earn Steem - not necessarily for those looking to earn Steem to sell Steem.

Steem doesn't actually vote, vests do. Let's say an account has 50,000 Steem Power, that is about 100MV and will deliver a 75 cent vote at 100% at the current calculated 3.5 day average price of 26 cents for Steem.

Complicated? Not really, but if you aren't following this now and are looking for earning on Steem - start learning on Steem.

So, when that account votes at 100% VP it will deliver 75 cents to the post. With current prices of 26 cents that is about 3 Steem. But if prices went up 10x to 2.60 - that vote would be worth $7.50 and and about.... 3 Steem. See how it works?

It is all relative,it isn't static.

While 75 cents on a post might seem fitting for that post, 7.50 on the same kind of post later might seem excessive. What that means is that the voter is more likely to drop the percentage downward and let's say they drop it to 50% - or $3.75. What happens is the post that used to get a vote of 3 Steem is now getting a vote of 1.5 Steem but, it is earning 5x more in payout figure.

The voter gets to play when high, that means that they are able to use their staked holdings to have some fun and I will let you know, it feels good to be able to reward people for their work significantly. Really good. Once upon a time I was leasing Steem power and could deliver something like a 10 dollar vote to people, but I wasn't. I was delivering a lot of 2 dollar votes instead.

My leased stake ran at a loss, while many of the people I voted on sold the Steem and profited. Will I vote on the same people next time when they are still unable to support others even though they have earned? Hmmm.

Everyone is free to do with their stake and wallet as they choose - including selling. But, everyone lives with the repercussions of their actions - including getting voted on. While I do think that people should be able to add a bit of a revenue stream to their lives, I also think that being part of the community is looking to be able to reward others that we consume from - and that means owning some stake.

But, this is the thing with investing into Steem. People who do actually buy, earn and power up aren't doing it because of the 1 cent increase in the vote they will get, they are doing it because one day that one cent will be 50 cents for their vote or - 5 dollars more a day. People should remember is that the payout numbers are misleading in terms of Steem earnings. There are many people earning more Steem now than they did earlier, even though the payout numbers are significantly less because they are attracting more stake on the votes.

When prices fall or skyrocket - quality goes to shit.

When SBD was booming at 20 dollars a coin, the amount of shitposts was incredible, so were the amount of alt accounts created by the circlejerks and self-voters to take advantage of the situation. When prices fall, the amount of whining shitposts shoot up as people complain about not earning enough, the good old times and herald in the death of Steem.

In either direction, shitposts increase.

But, there are some people who are consistent and reliable in their approach and while they vary their content over time, they understand enough that their blog is their brand. I am not talking about the "branding" people do on Instagram and end up buying some fake likes to seem popular and attract more hearts, I am talking about the people who build some kind of experience around their blog that people are willing to check-in on and consume often enough. It is these people who are likely also earning more now in Steem than they were earlier because, it is these people a voter can rely on to offer something of value.

How I see it is that it is just like any buy low/sell high investment strategy where the work is done and the risks are taken in the low times so that when things stabilize and improve, the play can start. I believe that too often these days people want to be satisfied 100% of the time, even if that satisfaction now is going to cost them investment potential and cause some level of suffering in the future. I am lucky, I enjoy both sides of the Steem coin, the low times where there is a lot of work to be done, and the high times - where there is a lot of work to be done.

I am looking forward to all of the people who did stay consistently producing and who did power up their earning or buy some additional stake to one day being able to go out into Steem and play with it, spread it around to those they think deserve it and actually provide significant value that people could use, without it costing an arm and a Steem.

If prices went to the previous ATH of $8, that 75 cent vote of the 100MV with all things remaining equal, would deliver a 24 dollar vote. How many of those will it deliver, when it could deliver 20x$12, 40x$6 or 120x$2 dollar votes a day?

Do you want a 100% vote from 100MV now worth 75 cents - or a 10% vote from the same 100MV when Steem is at 8 dollars and it is worth 2.40?

The difference is a 3 Steem vote, or a 0.3 Steem vote.

But, this is just how I see it - your thoughts on it might be different.

Taraz
[ a Steem original ]