Steem Power my perspective... is likely flawed in some areas.
Today @thecastle asked at what point does steem power start to do something. I responded to him, but I find that my thoughts on this have continued flowing even after that response. We do have some new people joining so I wanted to provide my thoughts on this based upon my knowledge and observations since I joined steemit back in July.
Initially my response to @thecastle was simple. I told him that when I reached 200 steem power back in July my vote to someone became worth $0.01. Now I am at 6000+ steem power and my vote does not award even that amount. I told him this was tied to the value of steem, yet I quickly reflected and realized it is more complicated than that. There are also some hidden beauties and benefits to accumulating steem power that begin to appear.
Every day X amount of new steem is produced and some of that flows to steem power holders automatically, some goes to miners, some goes to witnesses, and the largest chunk goes to pay content creators (blogs, upvotes/curation, comments).
Let's refer to Y as the amount of X that is awarded to content creators. As of the fork on Tuesday in December this will be 75% of X.
Let's consider your voting power as A and should be tied directly to your steem power.
B is the combination of all of the As spread against all votes during the payout time period. In other words B is the total combined steem power of ALL votes that happened during the payout period.
How much your vote should be worth should be whatever percentage of B that your A vote adds up to multiplied by the current value of Y amount of steem.
SIMPLIFIED:
This means that the more votes that are cast, the more diluted your votes will be. This means the more people using steemit and voting the more the impact of your vote is diluted. This can be offset by the more steem power you purchase, or acquire by content creation.
This may seem like a non-winning game. That isn't the case at all.
Consider this... X is fixed in size. This means only a certain amount of steem flows into the platform each day. As the amount of people using steem increases then the value of steem should grow. So the net result is that your steem power should become financially more and more valuable.
Your vote may seem like it is worth less, but let's face it a person getting $31K for a makeup tutorial in July is likely not a sustainable or realistic thing. The currency and platform are so new that the currency is still adjusting. As it goes down then you have opportunity to buy more of it at a lower price if that is your desire. As the number of people using it increases and X stays fixed in quantity the demand should cause price increases to offset this demand. This means your steem power should become increasingly more valuable.
The earlier you get into the platform as an author the easier it will be over time to build up steem power and followers. As an investor if you buy in when the price is down then you will have an easy quick route to potential earnings.
The main thing to remember as an author is to post about things you know and are interested in. Have fun. If you are getting paid anything that is more than places where you get paid nothing. As a curator, vote on things you like and are interested in if you want to encourage authors to provide more content you are interested in.
As an investor. I never have extra money to invest or I'd have more to tell you. All I can say is I think Steem is a good investment.
Steem On!
EDIT: All art in this is original and made by me. I used 3D assets to make the bulk of it, but I also did quite a bit of work on it.
This is why it's so important to have an increasing steem price. The current system is totally unsustainable as the more steem is printed the harder it will be to for the price to increase. The fork will solve this as it will make the coin scarce. However we will still have another problem down the road which is that it will be more difficult for people to gain influence in the system as the price of steem rises.
Financial incentives though will work regardless of the price.
Edit : I want to add another point too. New users need to buy steem power to be able to vote, so the dilution of votes you refer to is basically equivalent to the dilution of steem/steem power. If more people want to vote they will have to buy influence from existing supply thus increasing the price.
I never used it much, but I was a tsu.co member from the time they launched until the day they went dark. IIRC, their published expectation was that the typical user would make about a nickel per post on their social platform. In the long run, that's where I suspect steemit will eventually land, too. If so, it implies two things: (i) Until the market settles into those levels, we early adopters have a huge opportunity for arbitrage; (ii) In the long term, user retention is going to need to based on web site quality and network effects, not on rewards.
In mass-user-land, we will swim with the whales. ; -)
I was on Tsu, too. (Hi, TSU veteran) At the end, they had burned through their venture capital money. Their income to split with creators was only Google Adwords. Good luck with sustaining people with that, lol. The connection with digital currency investments makes Steemit a lot more sustainable, in my view. And setting Steemit it up, clearly, as an experimental platform - and even as a game itself - that allows developers to test and build out the underlying blockchain foundation, and other applications. So Steemit can evolve its payout, just like with this hardfork, as problems reveal themselves.
I actually forgot to use Tsu for a pretty long period of time, then came back right before they closed up shop. It's a shame they shut down. They had turned into a fairly sophisticated site.
I agree that the cyryptocurrency connection changes the equation. So does the curation and reward structure with power-users incentivized to think long term. But in the end, the value of our content and attention is mostly the same whether it's built on the blockchain or on facebook proprietary databases. Another swag is fb annual revenue of $18b / 1.8 billion users = $10 per person per year.
Don't get me wrong, I definitely think steem-related currencies will gain in value because new applications will come along, and these currencies have two very desirable characteristics: free transactions and price stability (SBD).
I just think it's going to get progressively harder to get steem by blogging and curating, so steemit (the web site) is going to need to come up with other incentives and attractions if it wants to retain users. Think about how bitcoin mining started on CPUs then switched to GPUs then switched to specialized appliances. I expect blogging and curating to follow a similar path of difficulty.
When Kim Kardashian and PewDiePie are posting on steemit, how much of the reward pool will be left to trickle down to the.masses? Your point about setting it up as sort-of a game fits here. One of the points in the original post is important, too. Build our audiences now, before the competition gets here. ; -)
I will be so swamped by any celebrity, no matter what, lol. So I'm actually very OK with this platform staying in beta for awhile. It will get harder, for sure. It will be interesting to see what happens, no matter what happens. Seeing what other applications evolve will be especially neat.
I believe you are likely correct.
The same thing happened for me as far as giving money for voting power. I had just reached 200SP and was giving $0.01 almost every vote in August. Now that I have over 2000SP I rarely get to see the amount go up.
I'm hoping that all changes after the hard fork though. Hopefully the price goes back up to at least $1 for a good while, if not higher.
We still may not see it as it is a combination of the amount of votes (aka number of users) and steem value. So if the steem price goes up, and the quantity of users we may not see much. Yet in such a case having a lot of steem power will be valuable. It will gradually shift more towards the quantity of people voting for a post as opposed to individuals with immense power dictating the rewards.
the more votes that are cast, the more diluted your votes will be
true...and the more votes YOU cast the less power they will have..
so let's see...I can vote eighty times in a day....
vote twenty time...
whatcha want to bet that my eighty votes are worth more than my twenty?
maybe not intrincily..but generally. Exposure and participation counts...PARTICULARILY if I comment on each vote....
I have received upvotes on comments....and it seems that when I comment it powers UP my vote power.
The dilution effect I was referring to is basically as follows...
If your steem power is A. If you vote B times at 100% power. Your total committed steem power to votes is.
Sub Total = A*B
The reason I said Sub Total is because the Total is actually all the Sub Totals of the people that voted during that time combined.
Value of steem power per vote = Amount of Steem added to platform / Total.
That would give you how much 1 steem power was actually worth in STEEM during that time.
So you could find the total steem power voted on a post and multiply it by that amount to determine how much STEEM it is actually worth.
The dollar amount is reflected in DOLLARS or SBD. So to get that you multiply the amount of STEEM the post was determined to be worth by the current market value of STEEM. This gives you a $ or hopefully SBD amount.
I understand that, but many don't. It was explained to me once that if you vote more than (say) x times. then you waste your vote.
Not true...each vote counts...just a little bit less than it did before.
forty full power votes is worth less than forty full power votes PLUS a hundred MORE votes of decreasing power.
the first forty are 'low hanging fruit'....then you get out the stepladder.
I stopped counting my votes. I tend to up vote blogs I like 100%, and I up vote comments 33%. At the moment that is where I sit. :) I may change in the future, but it seemed too much of a task to keep track of it. It'd be nice if the platform had a visual tracking of such things built into it. ;)
I agree.
Someone made 35k off a makeup tutorial?? -_-
July was crazy. There were posts breaking $10K every day. Yes, though @guerrint made $31K on a makeup tutorial. It was good, but $31K (I inflated it to 35K in my memory) is crazy. There was a lot of crazy stuff making insane amounts. There was a flood of people joining the platform and posting makeup tutorials.
:P
https://steemit.com/beauty/@guerrint/the-first-steemit-makeup-turtorial-bringing-youtubers-to-steemit
@roelandp posted a male makeup tutorial follow-up that was funny... and cleared $10K.
https://steemit.com/beauty/@roelandp/the-first-steemit-male-makeup-tutorial-bringing-youtubers-to-steemit-roelandp-is-back
I was here in July... but I never came close to that. My best posts maybe cleared $300.
I kind of doubt that will happen again, but if the value of steem increases and you have a lot of steem power then it could prove pretty lucrative.
This is purely insane to say the least.
There were some people during the July/August area that did so well on all their posts I know they made significantly more than I make all year long at my job. Yet that was not sustainable.