Come for the STEEM, Stay for the Steem Power. This is Getting Unfair for Bitcoin, Ethereum, Reddit, and Facebook.

in steemit •  3 years ago

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Steem Power is so good it's nasty. No "competitor" has a retention bonus like this.

Welcome again to so many new users! As you may know, Steemit’s liquid currency, STEEM, has been tearing up the cryptocurrency charts. Could it top Bitcoin and Ethereum? In time, that’s possible. Bitcoin and Ethereum both have utility, but only Steemit has created its own economy + a social media platform to rival Reddit and Facebook + it pays people to use it! To understand why Steemit is growing with such traction, you also need to understand its killer app: Steem Power.

Two of the major questions we are getting from new folks are “What is Steem Power?” and “What are the advantages of Powering Up?” Yesterday, @cryptoctopus made a post linking to one of my older articles on Powering Up, making me realize how dated it was already. I have written before about Steem Power, plus I authored that section of the Steemit 101 e-book that’s on Amazon: https://www.amazon.com/dp/B01HC47NLU (link). But the economics have changed these last few days, magnifying the importance of Steem Power.

Not understanding Steem Power is costing some people money. If you’re only holding liquid STEEM, then you’ve either made a short-term decision (e.g. you’re thinking of selling it soon) or else you don’t understand what you are doing.

I’d like to help you understand SP better. Let’s get down to business.

Quite simply, the content on Steemit is AMAZING and there are many other reasons to love Steemit, but from a financial perspective it has two major attractions for most people:

1.) You get paid to post and vote on good content, and

2.) You get paid much more for voting, plus you get a stake in the future growth of Steemit (who wouldn’t want that?), plus you get paid the lion’s share of the new money that’s created every day, plus you are not heavily exposed to dilution(deep breath)

…if you hold Steem Power rather than simply the liquid STEEM.

Number 1 above is the Reddit and Facebook killer. PAYING people to use social media? Are you freaking kidding me? :)

Number 2 above is the killer app that might just launch Steemit past Ethereum and seriously challenge Bitcoin’s dominance. It’s a big-time retention bonus that none of them have.

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Have you ever heard the expression, “Come for the food, stay for the pie?” When I was a kid, there was a pie restaurant that advertised on local radio and TV; they used that slogan. Maybe they still do. The phrase has another meaning in the slang category (going to someone’s house for other reasons and then staying for the…), but I won’t go there. Instead, let me get to the point.

A social media platform can only succeed by doing two things: Recruiting people well and retaining them at a high rate. Reasons to come and reasons to stay.

Why do people come to Steemit? Why do others buy STEEM?

They don’t come for the food. They come for the great content and the awesome community. But even more of them are coming because they’ve heard that this is the social media site that pays you to post and vote on good content.

And I suggest that people who buy STEEM as an investment are seeing the same things. They are speculating that the currency’s value will go up in value as more people find out about the profit opportunity.

Why do people stay on Steemit? Why do most people “Power Up” into Steem Power?

People stay for the great content and community, but also because they get a piece of the pie. Everyone who posts or votes on good content gets a slice of it. That pie is Steemit and the pieces are called Steem Power, a virtual stake in this platform and its explosive growth.

pie

Steem Power is Part of the Steemit pie; STEEM is just crumbs.

STEEM is cash that gets diluted as more money is created; Steem Power is the investment that puts your money to work, amplifying its value.

If you really believe that the Steemit platform is something special, and you do not need the money right away, then you need to be in Steem Power (not just STEEM). The reason I mentioned the time element is because Powering Up into Steem Power means locking up the value in the virtual equivalent of vesting shares. You can only cash them out over a period of two years in weekly Power Down cash-outs, so each week you can cash out only 1/104th (2 years x 52 weeks in a year = 104 payments).

Don’t worry; your piece of the pie will look bigger by then. One of the advantages of holding Steem Power for a while is that you get paid more Steem Power just to hold it! If you post and vote on good content, you will get even more. Effectively, you are paid 10% interest for holding, and that is supposed to protect you from any dilution/inflation as new money is created.

But drawing interest suddenly becomes a very valuable option when Steemit is growing as fast as it is right now. Your Steem Power is denominated in STEEM, and as the demand for liquid STEEM increases, that “interest” is suddenly worth a lot more also.

Another way to see it: Imagine someone is dumping money down from the sky. Do you want to try and catch a few coins with your hands? You will. If you want to put a bucket under that money spigot, then you'll catch a lot more. Steem Power is your bucket.

In times of stagnant growth, your relative stake in Steemit will remain about the same, not diluted by new money being created. (In other words, you will have more money, but your relative portion of the whole will be about the same.) In times of fast growth, which we are seeing now and which could continue for as long as it takes Steemit to become the next Facebook + Reddit, then you want to hold Steem Power because you’re getting paid more of it for being there (even if relative stake stays the same)!

And we’ve barely touched on the added voting influence you get from holding Steem Power. There is new money coming in every day; when you have Steem Power, YOU get to decide where a chunk of that goes. When I started on Steemit, my upclicks didn’t even move the needle. As my Steem Power increased, I could vote on a post and pay the content creator a few cents. But I’ve been writing my ass off and putting it all into Steem Power for weeks. Now, if I vote on a post that is already doing pretty well, one of my votes is worth a few dollars.

Pay yourself. Pay your friends. Pay someone who is making good posts and needs the money. Find some promising newcomers and encourage them to stay. But most importantly, help decide which good content gets rewarded on Steemit. When you Power Up, you become a serious curator.

I still don’t get it. How exactly does this work?

You can “Power Up” in Steemit, either through depositing your own money (buying Steem Power) or re-investing money you have earned from your posting and curating work on Steemit. (You are paid partly in Steem Dollars, which must be exchanged in the internal market or converted into STEEM. Then you can Power Up your STEEM into Steem Power with a few clicks of a button).

Below is a screenshot of my wallet a few weeks ago. Your wallet shows your balances. When you click on the arrow next to your STEEM balance, it gives you a drop-down menu with the option to Power Up. Then you will see a pop-up screen showing your balance and asking you to enter an amount to Power Up. Similarly, when you want to Power Down, you can do so via the drop-down menu next to your Steem Power balance.

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When you Power Up, you are moving your STEEM into Steem Power. Steem Power is a form of vesting shares; you can think of it as a Certificate of Deposit (CD). You will earn a return and have greater voting power by locking up your value in Steem Power. The catch is that you have to keep it locked up for a period of time, just as with many CDs. Again, you can only cash this out in weekly payments over two years, which represents 104 weekly payments.

So that’s the case for Powering Up and a fuller explanation of Steem Power. I’m just about out of analogies, so hope these ones made some sense. Come get your slice of the pie. Once it grows, you can have your pie and eat it, too!

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Also really liked it...

I've just finished SteemStream.com - a live peek on the realtime data on Streemit (posts, upvotes, money transfer, mining, new users, comments):

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This is awesome! I knew Steemit was gaining traction but seeing it represented like this graphically really got me excited about investing!

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That's great so new sites and apps are being made just for steemit alone . Why didn't I see this before going to have to buy some steemit still love me Liao as well though ! ;) please keep making updates for the site. We need some real time data.

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reddit is probably trying to make karma points a crypto coin now loool

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CEO of coinbase was at reddit or the otherway around i believe

Great stuff. Its all a little confusing for new users at the start but this is a very clear explanation. Thanks for posting.

Wow. Great post. You always have a brilliant way of breaking things down to the basics. The ELI5 king you are. :) Its been 'ages' on Steemit but still nice to read a refreshing perspective.

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I Couldnt agree more

Very good way of explaining things. Somehow it's not easy for people to really "get it".

I really liked your article, and have upvoted you.

I wrote something that talks about where Bitcoin & Steem are going here:
https://steemit.com/steem/@intelliguy/bitcoin-and-steem-are-both-going-up-this-month-just-watch

Thanks! I am starting to understand much better! Steem power to the rescue!!!

Yes it is very good but at the same time i think it is unfair. I have asked many to look at my post i spent so much time with research and writing and get nothing but a chick puts 2 lines and a pic and she gets all kind of steem. Please take a min to check a few of my post and correct me if im wrong please. No one can give me an answer

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Your post is thoughtful, but so far Steemit voters seem to prefer longer posts. Also, controversy does not necessarily get you voters; not everyone will agree with your opinions there. Don't forget good formatting, also, including some images and subtitles. If you'd like to discuss writing and formatting, send me a direct message on the Slack channel and we can discuss more.

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Perhaps over time, there will be so many women trying to make easy money on their sexy pics that they will each get less and less, and in the meantime, you might gain more followers, assuming you continue to create worthwhile content.

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I think its all about supply and demand, once the supply of a certain type of content is reached its quality degrades and is demanded less. Leaving a gap for new original content to may its way up.

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I might agree but we can already see the link bait articles floating to the top , humans it seems can't distinguish between good content and oh hay look boobs...

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I might agree but we can already see the link bait articles floating to the top , humans it seems can't distinguish between good content and oh hay look boobs...

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I agree on this. Some content gets overlooked while a girl showing some pictures of herself gets votes and earns steem.

This article is a good way to introduce new users. I'm sharing it on facebook. You should too.

People have always said things like.. "You can't have your cake AND eat it"..

The proverb literally means "you cannot both possess your cake and eat it". Once the cake is eaten, it is gone. The thing is... That you CAN do both on Steemit. Welcome to the future!

Im voting this for the BB-8 graphic. Great post as well.

Great explanation and greatly appreciated!

Great information thank you

Great post...Now I want to eat some pie:)

This guy gets it! Nice post:)

Congratulations, is a great post!

Do you like it?:
My God STEEM

steemit is the next facebook, apple, twitter, etc.
from community for community


visit my new post here >> #BEAUTIFULINDONESIA | bitcoin success stories | HOT GIRLS WITH COOL TATTOS | Everything about STEEMIT

I like the pictures... :)

Great post mate, really explains this platform in a way everyone can understand! thanks for taking the time.

best platform to join tho

Thanks for this helpful post! Steem can be confusing at first, but the more I read, the more I'm beginning to understand. At first, I thought I was just going to hold STEEM and speculate on price... not anymore.

great post, stay in the steem power on my wallet and invite more people to this site for make a grow community.

Excellent article and imagery used. I feel like this will help out a lot of people, including myself, get used and start to understand the power of Steemit :)
So if I'm not mistaken, STEEM would be the tradable tokens, that you would be able to sell and convert back into fiat or bitcoin, and Steem Power is the stuff you want to hold, that will show your prowess and will reward you for holding it. Also, how does that work, the rewarding for holding Steem Power, and how much do you make off of holding them? Thanks for your awesome article, hope my questions aren't too newbie :)

Finally, someone who's beautifully explained how it really works. Thanks!

Great and helpful post for a beginner like me.

Thanks for the solid explanation donkeypong. Much appreciated.

i love it. i like when i reading it

thanks good post!

Thanks for the post, it really did help clear things up. What i still don't understand though is the concept of "accurate voting", i've seen this mentioned on steem quite a lot but i don't really understand what it means. Also could someone please elaborate on how the relationship between steem power and upvotes/comments/new posts work with respect to payouts?

this is great, i like it very much

great post, i understand now, thanks

Slowly but surely, it begins to make sense. Thanks for sharing your insights.

Can somebody explain me when i get steemit i dont seem to get it!

@donkeypong Thank you so much for this rich content. I really didn't understand the different terminologies and how well they can serve me. Now I can make an informed decision on what to do with what I have earned so far on steemit. Thank you once again.

This post was excellently informative, great metaphors and analogies for those who dont know how to or where to even start.
I appreciate your time and effort you took to make this post!! I learnt from this!!

thanks for the great post. the more i read about it the more i like it!

I am finally starting to understand steem and steem power, thanks for all these articles.

This is such a great platform. Love the concept, execution is obviously coming along very quickly. I'm going to incorporate this into everything we do as an agency, structured finance company and for our clients and venture Cos.

True content will hash itself out through enough voters alongside the quality of posts. Imagine 8billion people that understand the crypto-rush~!

Ufff! u r right is NOT Fair. Started to Hang with the four Giants

Very good post. As a steem newbie i cant still grasp the whole concept regarding steem. But im getting there!

Greetings @donkeypong from Colombia.

As you know we are a country in development and the whole cryptocurrency concept is brand new and is hard to change the mind set of our citizens, but platforms like these will allowed our people to educate themselves!

Great post!, I've only been using this for the past 4 hours and I'm already seeing how interesting and powerful this will be in the upcoming months and years and with your explanation now I understand what's the purpose o Powering Up!

Post an extremely useful, I will try to learn
thank u

That's so funny.. I was actually thinking the same thing. I just learned about Steemit two days ago and upon digging deeper one thing kept coming to mind- "this is going to squash the competition!" I can seriously see steemit and everything associated with it's crypto assets taking the scene by storm in a major way. The whitepaper was a bit of a dry read at 44 pages but it has some seriously interesting stuff in there for anyone willing to read it.

This made me understand a whole lot more about Steem. Thank you very much!

gracias por el post estaba buscando uno de esta manera, que me ayudara a entender este concepto mcuhas gracias amigo saludos

nice post,vote back.. thx ^^

As a new user I think this has pointed me in the right direction. Keep them coming. Much appreciated

How often should one power up?

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Whenever you have the money and don't need to spend it elsewhere.

Wonderful man

Great intro explanation

I see steem as a great bridge for people who don't quite yet understand/accept crypto/bit. Awesome read thanks!

This is a great breakdown and perspective. Jaron Lanier would be able to sleep better at night if he was to read this. I'm sharing it on facebook

Awesome post. Very much on the money. The only question mark is if the community will buy into it.

So, I am still confused as to why I would want to convert my steem dollars into STEEM. I did that with like....$70 because I read that it was a good investment but now it's seeming like steem power is what I want. So, is it just to then power up and convert it to steem power? I suppose so.... (I am kinda asking anyone who can let me know. I am a noob)

Thanks for this mini guide, and was very helpful to understand how it works you have been so gracious

Good article. Since its written two years, if there is an update or more recent indepth article about the same topic, point me in the right direction.
Seems like the article is still valid, useful stuff. Thank you.

Very nice post. Thanks.

Thanks for this post. Convinced me to power up the majority of my liquid STEEM :)

Thanks a lot for the solid explanation and nice analogies!

great job with explanation

Thanks for the post! I love that the steem platform enables people to invest either their time or their money (or both) and be rewarded.

Fantastic and informative read, thanks!

This Great post. You always have a brilliant!

Top post, well written. Thanks!

Really great post! I understand seem much better now!

wonderful position, wonderful pie so easily explained

Thanks @donkeypong for the excellent post. The more I read your articles the better im getting with Steemit!

Great post, thank you!

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Awesome. Read your old article and powered up yesterday. This one is even cooler

Thanks for the great explanation! I just purchased some steem power with bitcoin. Im off to the races!!

I don't agree with statement, that steem can replace bitcoin. There are plenty of other startups that has its own currency and content and there will be even more. Thats why something like bitcoin which is not connected to any content will link them together. Steem is competition for gems or other content-coins, bitcoin will always stay as something you can exchange your alrcoins to.

just wondering how steemit pay their member. another social media pay their employeer from ads that's they earn, how about steemit

There's no "fair" in progress, as well as in business.

This really helped me to understand and swayed me to get more involved! Thanks

Thanks for the informative post! Being a complete noob here I'm still trying to figure out how everything works.

I was trying to explain this to my friends, but they didn't get it. So, after I have shared this with them, they were more like:

Thanks so much, i need learn more about this social media.

Amazing post Tom! You deliver value to the reader like only a few can! I'm learning a lot from you :)

Put it eloquently, entertaining and informative! Thanks for posting

The more I read, ​the more the penny drops! Thank you for the valuable information shared in this post.

good to know and understand

At least when a crypto is released at least have the power for usability and not just linux users and needed masses of programming experience to build a working wallet. Want people to use your stuff have a working Windows wallet and simple interphase or online wallet system that can be used by anyone with basic knowhow

Thanks for the info, I hope you find this information useful too, thanks

https://steemit.com/steem/@joiflores/how-the-system-works-part1-inside-job

One of the few posts that actually helped better my understanding here. Thanks!

I wish I could upvote this with each of my tentacles.

thank you

Wow. Great post.:)))

Thank you!!! Really, THANK YOU!
Best analogies ever, even I understood it, and I'm quite "green" in all this. :)

Hey @donkeypong! Along with your other post, you created a great introduction to the steemit world for newcomers like me!
Thanks for taking time to do this.

Awesome post bro. Steemit will be bigger than big coin one day.

I went to Area 51 to explain why Steemit is such a big deal.

https://steemit.com/area/@steve-mcclair/area-51-steemit-has-arrived

This is a great article!

I started to write a reply and it got Very Long!!! So I made it into an article which I hope is a helpful expansion of this one!

https://steemit.com/steem/@kenny-crane/what-should-i-do-with-my-steem-dollars-and-steem-power-expanding-on-donkeypong-s-article