Why Minnows Don't Buy STEEM

in steemit •  last year

If you owned Facebook stock when their platform was the same size that Steemit is today, would you have cashed out a portion of your investment to make trivial purchases, like to buy some new clothes?

Would you have even considered selling a single percentage of your stock for any reason other than an absolute life emergency?

I'm guessing you wouldn't.

Yet, I've seen many folks profess their absolute faith that Steemit will become the next Facebook... and then watch them sell what little profits they've earned for seemingly insignificant reasons.

The other day, another user commented that many minnows aren't investing directly in the platform yet (buying and powering up STEEM). It got me thinking: Surely, not every minnow is penniless, or without a means to exchange fiat for crypto, right?

Well, there are some good reasons not to invest in Steemit:

  1. It will cost you money and deprive you of other purchases.

  2. It is a very high risk investment.

  3. It is inconvenient to have Steem Power locked up for weeks and months at a time.

Fortunately, the brilliant architects of Steemit paired those risks to some enticing rewards:

The more you invest in the platform, the greater potential you have to earn from its economy.

Right now, there are fascinating debates over the fairness of those rewards. Like, what is the appropriate weight for an upvote? Or, is self-voting fair?

The rules of the game will continually be tweaked. But make no mistake, there will always be a significant advantage for taking the risk of investing in this platform -- there has to be.

For without investments, the token would lose its value, the economy would collapse, and Steemit would be replaced by a rival platform that got the incentives right.


As a relatively new Steemian, I'm starting to grasp that the Steemit community is split into two groups: crypto and non-crypto users:

The crypto folks have past experience with coins that have seen incredible growth. They look at the potential value of STEEM, rather than what it's worth today. This is an investor's mindset.

The non-crypto folks -- at least some of them -- appear to be looking at the dollar value of their content, rather than the amount of tokens they're being paid out.

In their mindset, I suspect, a post that earns $10 today may pay a similar amount next year, much like a wage.

But what I fear they're not aware of is that the amount of STEEM they'll earn in the future -- should Steemit go mainstream -- will be a tiny fraction of what they're earning today.

To summarize this quickly:

There is a fixed amount of tokens allotted for rewards, and as more people join Steemit, there'll be less to go around. But because the network's growth will almost certainly raise the price of STEEM, the dollar amount a person earns, may not change much at all.

This should alert you to a window of opportunity that Steemit currently offers:

  1. You will never earn STEEM as easy as you can today, because your competition has yet to discover the platform.

  2. You will never earn as much STEEM as you can today, because there are still so few users competing for the reward tokens.


Deciding whether or not to invest in STEEM, or when you should cash out, for any reason, trivial or not, should be an entirely personal decision.

We're all coming at this from different situations. Some people have no money to invest; others have no time to create content.

I just hope that the potential value of STEEM tokens -- not just its current ability to accelerate earnings when powered up -- is not lost on certain users.

If you truly believe in this platform, and understand how its economy functions, I hope you will value your tokens more than I did when I took my first crypto profits some six years ago.

I sold all my bitcoins for less than $20 a piece.

I don't even remember what I spent the money on, but I'll never forget the consequences of making that decision.

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Yep. Been thinking about liquidiating my 401k. Stupid thing will probably get robbed by the state by the time I'm eligible to take the money out. Just like pensions. Steem seems like a better bet.

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Hey @Agrooed. I replied to @gigafart but that comment was for you too. Keep your 401k. I can show you what I'm doing as far as buying stocks inside mine. I'll actually being doing 2 posts later this week on 2 small cap companies I think are going to be huge. But yeah, I love Steem. I'm not even officially a month yet and you can see what I've invested into my account. Will continue to bump that number up. Bottom line. Stay Diversified!

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Get out of your 401K as fast a possible! I did that myself long time ago. It's fairly easy to do. Your 401K won't survive the next stock/bond market crash. Invest the funds from your 401K in real assets which you can control directly like crypto such as Steem, land, art, precisious metals, etc.

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I upvoted you but disagree with you @deepwaterscrypto (now i sound like @cheetah)! Your 401K is usually a good investment up to the value that your company will match. Crypto is a great hedge to the traditional asset classes because it tends to go up when the others go down. But it's volatile and if it's all you have you will feel quite sick when the numbers start getting big and fluctuate or worse stay low for a couple of years as they did with bitcoin after the initial euphoric rise. The answer is to learn to grow both.

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I agree I personally don't think it's wise advice to cash out a 401k for Steem, as bullish as I am about it I just don't think it's a smart thing to do. 401K if you get an employer match is pretty much a no brainer it's free money.

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Virtual High Five :hand:

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Crashed and burned on my first attempt at using emoji :)

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you have admitted your error and now you can move on from it and be a better person lol...

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I guess I've been making micro short-term investments in art & literature since I joined Steemit. xD

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You can still make solid money in your 401k. Don't give it up. You can now buy and trade individual stocks inside your 401k. It's not just mutual funds anymore. I can tell you more about what I'm doing if your interestes. Plus, even as great as any investment can be, you have stay diversified. Workers for Enron stuck all their money back into that company. We all know how that turned out. I love Steem.l and I agree with your entire post. I just don't love everything to place 100% of my money on it.

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Amen. @aggroed I think that you should consider taking a multi-pillared approach to saving. I'm a CPA, not a CFA or CFP (so take any advice from me or others with a grain of salt), but I think it is wise to look at the following pillars when considering your savings:

  • Low-risk stable investments (savings accounts, certificates of deposit, treasury bonds (particularly like TIPS, or other inflation protected/indexed securities))
  • Stock market / 401k - as someone else mentioned, if you work at a company that matches 401k contributions... that is free money. make sure you max that. i know a lot of people on Steem are skeptical, but it is wise to diversify
  • Real property (real estate, precious metals, art, etc)
  • Currency
  • Health insurance

If you can diversify across those pillars, you will survive any macro-economic shock with minimal downside. It is always possible to look back in hindsight and say "if only I had invested more in XXX, I'd be on a boat right now!", but for every situation like that there are dozens of others that you don't think about where the reality would be if you had invested more in XXX you'd be worse off today. Saving is not a race, and a disciplined approach will leave you in the best possible position

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@canuckpride makes a lot of good points! I think being diversified across available asset types is a smart play as you never know what is going to happen in the future. My only caveat is that while I agree that saving isn't a race..... timing and when/where you start definitely play a huge role in how you finish!

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lololol Funny Man!

Great Post - You nailed it.

Big picture out look here....you looking beyond the present day numbers and into the potential future.

And I like the observation and analogy - the previous crypto experience people and the non crypto people. Steemit is indeed an on-boarding platform for supporting a lot of newbs into crypto which is a real game changer in my opinion.

Great Post.

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Good move! Starve those wall street wolves with alt investments which don't cost fortune in commissions.

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Dave Ramsey would be very mad at you. haha

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I'm actually thinking about doing that! I just hate that I will have to pay about 50% in taxes and early withdraw penalties.

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I don't know that I'm ready to jump in that deep, but you have a good point. The long term gains on Steem or other cryto currencies maybe a very good way to hedge your bet against one countries economy and it's tax treatment of a 401k and the limited number of investment options they provide.

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I would have done it in a heartbeat, given the opportunity.
My $50,000 would now be worth $3.5 mill. The Australian government owes me the difference.

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We call it Superannuation here in Australia, and I've been trying to get mine into bitcoin since it was at $50 in early 2013. They won't let us invest it ourselves, but they assure us it's still 'our' money.
Infuriating.

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I can't get into the housing market, thanks baby boomers and foreign investors, but good thing I've got $30,000 in super for my retirement when i'm 120

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Please don't do that. By all means invest in steem but it should be a small % of an overall well diversified asset allocation based on your need, willingneess, and ability to take on risk.

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I transferred mine into a silver 401k for this same reason.

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Agroed, i would cash in(and have)my 401k recently, but not for investing. unfortunately i had to pay for what was left after ins. for my rotator cuff surgery....and the 20wks. of rehabillitation. Mine was a self funded 401k though, as the last time my company was sold we had to sell off the 401k and reinvest in the new companies policy...so i just self invested with vanguard...anyhow, my ROI on the 401k was far less than my investments in stocks.. while i wasn't lucky enough to have enough discretionary income to invest back in 08, when stocks were super cheap i still managed to make roughly 58% gains on my financial stocks(of which i have taken the profits off the top because i believe we will have a market correction here in the next three months, and financials are overheated and have less than 7% to the upside shortterm.... I would do like others have mentioned... diversify into stocks, metals(silver is close to attractive for me to start buying again, it seems to have neared a bottom, platinum would be my next choice, as i do not see gold going anywhere anytime soon if the global economy continues to heat up.) if you look into financial stocks look into the smaller regional banks, i see a possibility for some consolidation to take place in the banking sector, and the small banks are still relatively cheap, but are vulnerable to takeover, and even a slight bump in the economy... As for the crypto-currency markets as a whole, Aside from BTC, the market as a whole is still in it's infancy....the risk is very high, but adversely the rewards could be phenominal... Aside from my growing SP here i am not currently invested in crypto yet.. the crypto market has to do a little bit of stabilizing before i'm willing to risk any serious amount into it. with the exchanges going down, troubles trading on one exchange(the one in which has steem paying highest atm..) halting trade of steem, and other things that keep the market unstable keeps the risk/reward ratio just a little too high risk for me atm....but i mean, if you got a little disposable cash lying around that you wouldn't miss if you lost it then by all means buy you a little bit of steem...

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cool. Side note. You can use the enter/return key to make paragraph spacing for an easier read.

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yes headmaster aggroed! lol... such a grammar nazi you are ... i have become so used to the interwebz being that grammatically lawless land where spelling, structure, and punctuation meant nothing.... time to brush up on my structure and punctuations. Why do i now feel like i'm back in ENG.1 this morning.

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I just want to be able to read you comment. Take it as a compliment.

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i do.. because if i can improve my writing, i can improve my quality....

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did u cash out ur 401k yet? lol i shouldnt have been so angr about it before, i just love tellling people what to do with their money, especialy when i know for afact it will make them rich! and i know u already know thi, but other minnows readiing this should see how people like u are converting 401ks o steem and that will amke steem seem loike more of a serious investment!
especialy with steem prices so low...i know u are waitingf or them to drop to $1 or below before u buy a lot, i think many of us are waiting for tht! as soon as it drops to close to $1 we will see it start rising to $2
dude someone with Megatron's face as theeir avatar should get into a flaame war with you! it would be cool and then seeing some other autpbots come in and decepticons to join the fight!

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It really depends on what your financial goals are. Everyone needs liquidity of some sort for short, medium, and long run.

A good way to structure your potential payout is invest a small amount in long-term risky investment which you have no control over, ie. Steem. A medium portion of your portfolio should go into investment that yields medium returns like crowdfunding, etc.

If you have no liquidity issues, you can skip investing in the short term like trading cryptocurrency, etc and simply hold fiat money.

This does not constituent an investment though. Here's my 2 cents worth of my investment approach.

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Talk to the guys at perpetual assets. They can show you how to convert that 401k into a self directed IRA that you can then purchase steem or gold, most any asset, that you will be in physical possession of.

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Do it. I just got a fat 401K loan and stopped my contributions to the damn thing. I encourage you to do the same. We put my wife's into a checkbook IRA and she can buy whatever she wants. She may even buy an ETH mining contract.

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what's a checkbook ira?

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A checkbook IRA is basically an IRA that you can put anything in you can write a check for. Watches, bullion, crytpo, a business, a rental property. There are a lot of folks out there who specialize in them. I used Broad Financial myself. If you have a 401K from a job you don't work anymore, you can roll it into that.
Then you can drop like 50K a year in there pre-tax. So if you make 150K on Steem, you could put 50K into the checkbook IRA, buy bullion, and no tax.

For anybody who can take an angel investors view, investing in Steem may be on the agenda. But many of people do not have the mindset of an investors let alone the mindset of an angel investor. The way Steem is setup still has to proof if it is the right setup; This includes the SP pyramid and concentrated power, the reward distribution and the lack of tools for all the minnows to get noticed with their posts and comments. That is why investing in Steem requires a angel investors mindset and that limits the amount of people tremendously.

You mentioned FB. An active FB users is valued at around 225$. Assuming Steemit has by now 25k active users, an active Steem user is (by coin value) valued at around 16k$ (416M market cap today). A Steem user is valued 17x over a FB user. If we would assume similar value to a Steemit user as a FB user, we should have around 1.7M active users.

What do you think the value of Steem could become?

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Thanks for your excellent comment!

Without a gatekeeper to collect ad-revenue and sell private data, I'm not sure how the value of users can be easily measured. But if people (including non-members) spend meaningful time on the network, there's obviously a value.

For instance, I see ICOs being "introduced" here all the time. What is that type of direct advertising worth? And now I see an active market for delegated coins.

Also, the coin's value could one day decouple from Steemit if the blockchain is used in other apps and for other purposes beyond this social network. Maybe STEEM will be used widespread as digital cash, fulfilling BTC's original vision. That's already happening on Steemit, but soon it will likely go external.

(Likewise, the Steemit network has a value independent of the coin, even if it's currently very small. As the user base grows and the network acquires features [in addition to being censorship-resistant and ad-free, etc.], this value increases.)

Steemit has proved that they can hard fork corrections on a regular basis and appear to have a supportive and resilient core user base. HF19 radically rebalanced the rewards, and it appears the network has benefited. I am optimistic they can continue to solve problems this way.

Having said all that, buying and staking STEEM is incredibly risky, like everything else in crypto. If the gamble pays off, I get to help change the world, and probably live a much better life.

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The potential for Steem and Steemit is huge.

Steemit can become the FB of the crypto world. It requires quite a bit of additional features and a major upgrade of the UI as well as native phone Apps and IMHO also native desktop Apps, the offline functions will help the frequent blogger/poster a lot. When Steemit can also land commercial business; Maybe even take fiat money from them for services and tooling provided to them to make Steemit another social media channel to interact with their fans, Steemit has the cards to sky rocket.

Steem potential is indeed much more then 'just' supporting Steemit/social networks. Payment will be very interesting indeed. In the end I think a few coins will be used throughout the world, and many of them will compete for being one of these. To become that payment coin, a lot is required. With BTC we've seen a very slow and still very limited adoption. Even the number of ATMs are very limited. POS requires support for the crypto coin as well. Steps are made by various parties with debit cards, and BTC ATMs as well as some POS systems supporting cryptos. But for mainstream adoption also the volatility of the coin is important to be reduced. The mass cannot and will not cope with the constant value crashes that we see with BTC and all the Alt coins. But in time, crypto will become part of our daily lives as a payment currency, and Steem can be one of them. BTW, I see another challenge for cryptos as a payment currency, the huge numbers behind the dot/comma. People do not like a price bing 0.000345 Steem or BTC. Steem is not having the value for those small prices but with the limited supply Steem will have, the only way to become a payment currency for Steem is to get values like BTC has, otherwise the coin is to small for such position.

HF19, I think this was a great release! Time will tell how the whole thing settles in, but I think for by far the majority of our community, positive things happened with the increase of rewards one can earn as well as one can give to others.

High Risk: Crypto is still at the start of what it will become in the future. It is before the chasm, ie it still needs to proof its position in our world. The cards looks good for crypto in general. For each individual coin, it'll be a little harder to predict their future.

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Im really glad for you post and your support towards we Africans. As me my African friends initiate our quest to touching lives in Africa here, your support is really appreciated and thank you very much. I've posted quiet a little on my blog and I'd love it if tou could check on my blog and see if my post is okay so that our friends who would join wouldn't make any mistakes here. Your comments will be my motivation and inspirations. Thank you

Good article. I had a very similar thought the other day. Please check it out:
https://steemit.com/steemit/@bi5h0p/how-to-get-yourself-unfollowed-on-steemit

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There's always going to be users and content we don't agree with. Fortunately we have the tools to prune the network, a click at a time, to shape it to our vision. Enjoyed your post.

I think a lot of people in the crypto world are trading a lot of their coins on a regular level. Powering up your steem and therefore locking it down makes this impossible for 3 months so it is not very inviting for them.

As I am new and very unexperienced still, in steem and crypto and also trading, locking up my steem is quite a good thing for me as it prevents me from doing anything stupid and I am looking to hold for a long time as I enjoy my experience here a lot.

Also I will totally upvote my own comment since I dont see it as unfair. I invested, I locked my investmant so I am in it for the good and bad times now, my vote is my mining and I earned it by taking a risk.

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heh, you know I never even thought to upvote my own comments! :)

That is a good point, powering up does give you at least a barrier to prevent yourself from panic selling everything while still allowing you to get some money out if you need it.

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I ve read an articel about commenting and there was suggested to do it and explained why (cant find it anymore though)

But especially if you start out most of my rewards I have gotten so far are from my own upvotes. And as great as steemit is, I would be lying if I said I dont want to make some money with it either.

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I was just searching for articles, seems there isn't a consensus on whether or not it's within steem etiquette to upvote your own comments, thought people seem to agree that it is okay if you would otherwise not use your full power votes that day and/or wish to push your comments closer to the top to highlight what you feel is important information/good content. I think I will still try to mostly upvote others but might try the upvoting comments thing in certain situations like they described. I am curious what other's think about the self upvoting??

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Self voting keeps you from voting on other content, and that keeps you from generating relationships. Those that find their rewards are coming mostly from their self votes might note that their own votes are limited in number, but the votes of the community are limitless.

For folks that have a grip of SP, self voting is self defense. If your vote is worth $100's or $1000's then not self voting seems like wasting opportunity, and that makes poor business sense. However, you're then trapped by your SP, and unable to curate and grow Steemit in the direction you want it to go.

What really chaps my hide atm, is VP decay. I haven't voted in days, and my VP is barely above 50% last I checked. I consume a lot of content on Steemit, and want to upvote everything I like, even a little. This becomes hundreds of votes per day, and my VP will not recharge, meaning my vote becomes motivationally meaningless.

TBQH, that's a lot worse than self votes, even though self votes account for a far greater concentration mechanism for wealth. The network effect of getting many minnow votes is very motivational, even though ppl want the whale votes (of course. Who doesn't like money?).

Disempowering minnows from voting, as has been shown in my example, dramatically reduces curation, which is the lifesblood of Steemit.

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Thanks for the response. Hmm, yeah the voting power decay and recharge cycle are an odd wrinkle/dynamic in Steemit. On reddit, I can upvote all day long and a vote is a vote. Here, there are a lot of posts that talk about limiting your per day votes so that your VP is stable and/or is able to recharge. I am not sure what the answer is though. Hmm...

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Last week I was still upvoting profligately, as had been my practice from the get-go. However, I read the white paper (which, apart from some relatively simple math, is not too impossible) and learned that if I didn't reign in my voting, my VP would continue to be debased and never recharge.

It seems that voting until your VP is down to 70% or so, and then waiting for recharge is about the best you can do. Your read of the white paper will prolly give you a better answer than I can.

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It's not only self upvoting there are old circles they are upvoting each other
It's a form of insidertraiding
I saw an article that someone offered a bot to do the upvoting in the best possible way for the groupe
It is a way of mining and you expected to invest your money first
Otherwise you get nowhere

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The question is if the guys on the bottom of the pyramid are ceep coming

OMG this post is brilliant! I'm so sad I barley found it !
I agree! As I become more invested in Steem With my time, I get a little concerned. Part of me is terrified that the platform could fall, The other part of me feels that it will be the next facebook for sure and I need to keep it here.

So my strategy has been to keep as much as I can in the platform but take enough out where I still feel "paid". That way I feel like even if the platform falls, I got some money out of it. As well as made friends and boosted my writing skills.

I know some of these minnows your talking about, Withdrawing everything they have. I feel like they'll regret it later!

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I think your strategy is very reasonable. Betting the house on Steemit is not very wise, but nor is missing a potential life-changing opportunity when it's right under your nose.

But it's great that, regardless of Steemit's outcome, you can walk away with better skills and new friends. Time well spent!

you have an original and interesting perspective. I think you may very well be right. It's not easy to see the forest for the tree sometimes, but if you believe, it's worth putting your money where your mouth is..

I agree. especially since steem power gains interest too

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Thanks, I didn't even mention that! There are like a half-dozen ways to make money on this platform.

When word gets out, I fear they'll be the mother-of-all-waitlists, regardless if they improve onboarding...

It's a real tough time for liquid Steem right now @gigafart and I'm going to feature this in my Daily Dose today. We've not broken to the downside yet but were damn close! A classy post. 100% upvoted plus resteemed :)

Good job at trying to explain HODL to non crypto users... $20 tho 😭... hopefully that drives home the point even more... still upset about all that ETH I sold at $18!!! some people will never learn

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Ouch, tops are extremely hard to pick in cryptos

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yea, stupidly thought $1800 was a sweet price to sell 100 ETH for...

This is brilliant, and exactly what has been on my mind lately. If minnows are patient, produce good content, and hold even half of their payouts I don't believe it would take very long to become a dolphin. Great post, upvoted and followed.

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I just found out that I am a 🐬
I keep it all locked ....for now

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Nice! Curious, do you know what the requirements are for being considered a 🐬?

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I asked the same questions today and got this answer

It's actually really simple. What kind of fish you are in Steemit depends on the amount of Vests you hold. Go to https://steemd.com/@yourusername and in the right corner , you will see ho many (Mega) Vests you hold. Currentl, https://steemd.com/@mammasitta holds 24.84 MVest, this makes you a Dolphin also. When you reach 10MV you are a doplhin. 100MV makes you an Orca, 1000MV makes you a whale.

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Nice, looks like I just made dolphin status! Didn't think I was there. Now hopefully on to Orca status lol. Thx for the info!

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Hello Hellooo Lets Jump together and entertain the crowd! ❤️ It so far. How many vests do you have?

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Looks like 10.79, just barely made it :). Sounds good, I just followed you. Haven't made a real post yet but plan to introduce myself soon and then off to the races I'm hoping! I'll look out for your posts 👍

This is very nice to read article. This community has a lot of space to grow. I quote what you said

Would you have even considered selling a single percentage of your stock for any reason other than an absolute life emergency?

This is truly what I'm thinking, I buy and only hold to the coins that really believe in, and steem is one of them. This is the time we must keep our steem token especially in down market like this. Very well said I upvoted you and resteemed your article! @gigafart

I don't have any money to invest in anything, only my time and my art. If I can create enough value in my content that is translates into a payout, I am not planning on cashing out anytime soon, though. It isn't even costing me, except for my time, which I was spending on other social media platform anyways, and that isn't going to give me shit!
I remember thinking about buying bitcoins when they were around $100 and I had the money at that point in my life and I didn't because it seemed complicated and risky. If only I had bothered to get to understand it better... I wont be that lazy or complacent this time around! Thanks for the great post, I am following you for more good info!

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Many (most?) people who join Steemit in the future won't have any money to invest upfront. They will do exactly what you're doing -- adding value to the platform with social connections and unique content.

The platform was designed to accommodate and reward participants of all types!

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I hope so, excited to see!

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Voila 2x !

yyyyyup. I've gotta nice bitcoin story like that... worth about $15 million USD today. And the best part is that I never intended to sell it at that price...my significant other at the time wanted to cash out before leaving me -- Oh well :D

These two points: "You will never earn STEEM as easy as you can today, because your competition has yet to discover the platform. You will never earn as much STEEM as you can today, because there are still so few users competing for the reward tokens." These are major reasons why I have been buying up STEEM and investing it into STEEM Power. Everyone who has joined recently or is considering to join SteemIt today might think they're late to the party but they don't realize the potential of this platform five to ten years from now.

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Considering we are a bit over a year into STEEM and Steemit it is kinda funny that many believe they are 'late' to the party. Relative to it's future potential we are all pioneers considering the community size if but a measly 200k. Crazy thinking :) Huge potential as you said

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If you look at active users, we are still a tiny tiny network! Everyone right now has an amazing opportunity, whether they invest with money or with their time.

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Absolutely agree. It will pay off. Unlike many other cryptos in the space STEEM is being used in something that works today, by a sizeable community no less. There is no better proof of value created than that. We are heavily undervalued and it will be proven as the years go by.

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I see you've but some serious "coin" on the platform. And now your upvotes are worth $2.87.
Kudos sir. Classic money where your mouth is.

STEEM On!!
Dave

p.s. I'm going to copy your plan

Wow, very insightful post! I am on the platform a couple of days and I am still trying to wrap my mind around the whole concept. It is mindblowing to realize that it is possible to make hundreds or thousands of dollars by posting texts and images.

What I am seeing is that this crypto revolution, and all the money involved, will change the way we think about the internet and technology.

One point that does worries me a bit is the fact that the early adopters make so much more. Fair enough, the early adopters take all the risks. But this kind of creates the incentive for the community to keep creating new platforms and protocols for the sole reason of becoming early adopter over and over again

What is your view on this @gigafart ? Any ideas how to conquer this?

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It's said that humans spread all over the globe via population budding, like when a sub-group splinters off of the main group in search of better conditions. Or after a disagreement, probably over resources.

Could contentious hard forks, or a ceaseless cycle of new coins be inherent to cryptos?

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One reason for people to not invest more is fear. I am personally thinking of investing more and more in cryptos and steem certainly is in my radar right now. It is clear that it is far from it's potential still.

We need to realize one thing: Why are Facebook, Whatsapp, Snapchat and Instagram worth so many billions of dollars? One reason:

The Community

Therefore I have high hopes for Steem!

I started investing in steem within the first week of my account. I saw it drop to below $0.50 if i remember correctly and bought really cheap. Within a week or so it was up close to $2. It has been up close to $4 and think it will again soon. So why did i purchase steem as a minnow (still am a minnow). I did this like you said @gigafart to invest in a platform that i believed in and thought I was also investing in my self.

The more you invest in the platform, the greater potential you have to earn from its economy.

This is a very cool perceptive and relational for new members to consider. The example of facebook is amazing. I very much dislike facebook but love steemit. I wouldnt invest in facebook for that reason. I am hoping that I can keep all my steem power invest, though some life situations are making it look like i may need to take some out to pay my rent and eat. I would rather be investing more though if possible.

Thanks again @gigafart and keep supporting great content and writing it too.

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I'm sure I'll be powering down at least some SP in the future, for any number of reasons. But I'm going to try avoid doing that during the rapid growth phase of Steemit, which we've clearly started.

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yes very true. I agree totally and i prove this by by banking of some steem sitting in my account as we speak. I am trying to avoid taking it out if i can hustle some other way b/c we should only go up from here. Best of both worlds; investing in an altcoin that i totally believe in with a purpose as well, and also a coin that I am earning in addition to the growth of the coin.

@gigafart I think your post illustrates some very important points. The line that you end your post on is perfect! It really drives the message home! It reminded me of similar errors I have made in my life..... where I wasted money on products for momentary gratification instead of building up for financial freedom.

Who risks profits. Steem should be a stable investement for the long-term. People cashing out now are just too excited and can't believe that something like this exsists. People also like to share things they enjoy on the social media. Same applies to the ideas, and when other people see the money...more will flock under the Steemit banner. The thing is, crypto market is highly volatile, it's important to get everyone to learn about it so that they don't panic sell.

We will also need Steem debit cards in the future. This community could manage to crowdfund it along with some serious crypto investors. This would distance us from FIAT-BTC-STEEM condition and would get us into the mainstream much faster.

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The fact that we can crowd fund our own marketing and development blows my mind!

@jerrybanfield raised money from upvotes to advertise Steemit on Facebook.

...speechless

Your post has caught me right in the middle of my conversion from a non-crypto person to a crypto person. I think most users are just thrilled to see up-votes and earn a little steem from their post. But it doesn't take much to make a convert. I think many, like me. will slowly learn that powered up steem could be a very valuable asset. Thanks for the great post.

Thank you for that very enlightening explanation. My best friend has been asking me and asking me to tell him how it works. I've been too busy having fun posting, commenting and learning about the platform use that I haven't read much on the technology and structure behind SteemIt. With your post, I think I can safely leave my Steem in my account as an investment rather than pulling it out for a little bit of money. I'm fact, I've been looking at which coin I wanted to buy next after my Siacoin and verge purchases yesterday. I may just put it in to Steem after reading this article.

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Steemit has a working product and a user base. That puts it ahead of just about any crypto project that I'm aware of.

That doesn't necessarily mean it'll reap the most profits in the short term, especially with the current ICO market.

But parking coins on this platform and earning from it (even just passively), is an attractive lower-risk option IMO.

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Thank you, I'm convinced to put my next purchase into steem.

Just bought some steem from poloniex but it was stuck for more than a week ... now I am scared shit about transfering it out ... did a small transfer and it worked ... guess will be transferring more. Steem is the best investment one can make for sure. It is a gaint in the making. Right now flying under the radar of most people but I am sure one day, this will the ony way creators will accept ... no middleman. Upvoted and followe d you. Thanks again for sharing.

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I've been using Bittrex more and more since Polo has had their problems. Unfortunately, they've had many other issues beyond Steem wallets. I'm a bit nervous to leave any money on there, tbh.

Creators will flock to Steemit when word gets out. I will be writing more on this soon!

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Steemit could cause a revolution in the crypto world. It is by far the easiest way to get involved in the concept of cryptocurrencies and it is extremely easy to get hooked once you have an account.

It will be a test for the network once a bigger flow of users will arrive. Exiting times are ahead of us.

Personally think the bubble is still gonna pop a bit. The masses are not gonna buy steem, it is still too complex. Check my posts from yesterday Crypto in the real world, when? A checklist with some points we still have to overcome before we can really start see mass growth in crypto..

This was proven when some didn't choose to participate when the price was low. I got to put a lot of 7 cent steem in my wallet, because not many were blogging. Now that it is safely stored there, I can't tell the 7cent Steem(s) from the 1 dollar Steem, but they were much easier to earn.

Good post, I didn't agree with everything, but you made some great points.

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I enjoyed those "cosy" days 🙃

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Me too. I also look forward to the growth, but that was a nice phase. :) Grins.

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I could see the "trees and not that forest"!
I stopped upvoting the ones who left and came back. I like loyalty!

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Interesting. I felt snarky about it, but didn't go so far as not upvoting. Loyalty is something I admire as well and it matters to me. (As long as it doesn't go too far)

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It sounds a bit harsh but that's how I reacted at first. I'm only human after all 🙈 I continued to focus on good content as always anyways. I am here since 8!!! months and never cashed out a dime, still counting maybe one or 2 "super powers" on my articles once in a while but I became a dolphin and proud ! So proud! Hard work but Fun times

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I didn't think it sounded harsh. I was glad someone else at least felt snarky. lol...

Congratulations on becoming a dolphin!!!

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🐬🐬🐬 at least we are honest!

Some people cash out to prove steemit does pay as you blog so they can get their friends to join. And to start keeping some as SP. Some exchange their steems to help their friends get an account on steemit like anonsteem, steemconnect and i know there is another one thar came out in a post 3 days ago that goes for 12 steems.

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Those are definitely SOLID reasons to cash out some Steem!

Great post and great points. I've never cashed out a single steem coin, although I did go MIA for a while which in hindsight was VERY costly. For people like me who never owned bitcoin until needing it to buy steem, the lesson of those who sold bitcoin early has been helpful. But back then, who could have thought bitcoin could hit $3k?

Thanks for sharing your wisdom and insights.

I'm a bit confused after reading your post @gigafart. Your article starts with a great caption, which pushes users to read your article, thinking that they'll be told how great Steemit is & that they should invest money into it, but it seems like the ending leaves much to be desired. From what I could gather, your ending is suggesting that we should invest now but cash out when the competition catches up to it or when it goes mainstream which in my opinion doesn't make sense. Hope I'm wrong, lol.

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You got my intentions a bit wrong, but actually, I enjoyed your response. As an investor, it's important to remain objective and not get too religious. Steemit could one day hard fork and take a direction that doesn't align with my principles. Or a competitor could arrive that better serves my needs.

As of now, though, Steemit is so far ahead of any competing product, I highly doubt I would cash out any time soon, barring some unforeseen catastrophic event.

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Thanks for clarifying your statement @gigafart. I think you're the only genuine user I've met on Steemit who doesn't take offence to a comment that has a slightly different view-point.

Very well put. I myself, well, I invest what I can at the time. Only if I really need to, I will sell a portion, to pay bills. But then, I reinvest to keep on track . Checks and balances. But I see myself STEEMING full-time someday soon. That's the goal. Great post. And thank you for the insight. Very valuable.

I great post, i joined Steemit a month ago and decided to buy some STEEM on Poloniex to allow my upvote to have more power. I wanted to reward good content with more than one cent.

Yeah good point, maybe if you could buy steem with dollars then more people would be up for investing as a lot of people don't really get the bitcoin thing. Then also have steem convert straight back to dollars, is there any exchange that is going to do this?

All in All the investors, AKA People Who Own Steem Power, will be rewarded handsomely for the risk like @gigafart was talking about.

Take this minor correction as a buying opportunity for some SP.

Excellent post! I'm in to win it.. Keep On Steemin On!!

I have a Master's degree in a healthcare profession and I am living week to week. Everything is a life emergency. I really don't have a choice but to be the way I am with Steem. I hear exactly what you are saying, but I struggle to buy diapers and pay bills. If that means I'll always be a minnow, so be it. In this economy, any value I can glean from any activity needs to be liquid.

Please consider that your peers in this medium may not be your peers IRL.

Man you must reflect daily about the mistake to sell all your bitcoins for less than $20 a piece. Guess you won't make that mistake twice like with steem coins, right?

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I reflect daily on how my parents wouldn't let me use their debit card with my own money to buy 100+ btc at 80~ cents each.
I'm sure all of us who knew about btc back then think of times somebody fucked us or we fucked ourselves.

The classic and tragic dilemma of FOMO. Some people are afraid of missing out on a temporary experience (i.e. selling steem for a fun spa weekend with friends). Other fear missing out on the potential longterm gains. The beauty is that both positions can be perfectly OK based on one's goals for life.

Gotta love freedom to choose (both for the good and for the bad)!

I guess that I won't cashout unless I really needed some money. Investing in here really is an excellent option and it requires discipline and self-control.

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Steemit is a game changer, because almost anyone can work on the platform to earn coins, even if they can't afford any upfront. But varying levels of discipline, and delayed gratification, might really separate the pack over time.

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Yes sometimes we have to look at it in a different perspective. A long term goal truly especially here will definitely pay since it actually at present, doing more than excellent,we just have the option to choose the better one too.

I'm not cashing out a single STEEM. All will go into SP.

Steem, Steem Dollars and Steem Power are still confusing to me. I just keep posting and collecting them without really know what they do and how they relate.

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I'm new too, I'm sure we'll pick it up over time.

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You can sell your Steem Dollars for STEEM, and convert STEEM into Steem Power.

It's confusing as hell for everyone at the start. Don't give up!

Well explained. I was lucky enough to receive similar advice at the start: to re-invest all my earnings back into steem.

Although I must confess that I have been cashing out liquid steem to invest in some other currencies and for conducting experiments. Even still I believe that powering up is the smarter move! Especially for the long term gain and strategy.

The price of Vest doubles every year right!

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Diversifying is always a legit reason to cash out. I will eventually do the same.

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Ya, that's why I did it. I Felt like I wanted to use a bit of what I earned to branch out but really didn't have the cash to invest ~

Steemit makes it easy... SBD -> STEEM (in the internal market) -> exchange -> to BTC or whatever else.

Hey, me too! I think I sold most of my bitcoin when it was around $14. I really needed the money to pay bills though so it had to be done and while BTC is worth way more today it could have just as easily been worth $0. If you believe in Steem and/or the Steemit platform, feel free to invest but make sure you do your own research, are aware of the risks and do not invest more than you can afford to lose.

How much USD worth of STEEM turned into Steem Power would one have to buy to make a significant impact? Are we talking $20, $100, $1000, $10,000?

Also on kind of a related note how much does one need to put behind a "promoted" post in order to really make an impact?

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You can go to Steem Now, plug in your username, and play around with the slider to see what your upvote is worth.

ATM your power is at 29%, and a 100% upvote is worth 4 cents. So we might expect a 13 cent vote when you're fully recharged.

If your goal is to have a $1 upvote, you'd need to have something like 8x more SP.

@gigafart <BTW, typing your username made me giggle. Good work.

Joining Steem (and the cryptoverse) in general got me seriously thinking about the junk I spend money on. Eating out has been scaled back, and I no longer yearn for the next large-ticket purchases.

The investment mentality is one that is holistic, not just compartmentalized. Otherwise, cashing out on marginal gains will be commonplace and growth will consequently stop.

Thanks for the article, and for the wisdom it contains.

I think in the long run those who have been following bitcoin or other cryptos would see the hidden potential of steemit. 😀. Steemit already has a usable social media unlike most cryptos which are on development or even worse, just a bunch of empty promises.

I think so investment has greater roi potential rather than just trading steemit on the market.

Good post, it makes people think on what they are doing. Not just with steemit platform but steem as a company and how they are going to invest in the company.

This is too true.

On the upside atleast them offloading all of their profits makes steem less expensive for us in the meantime. I only wish I started investing when steem was less than $.10 last year

Followed! I cant wait to see more

Wah ,, I'm so impressed with your opinion ,, I will convince myself that the value of the steam tokens will continue to rise, my investment will not be damaged, at least in the next 10 years

How is the inflation currently ? 9,5% per anno? this is a point to consider too, otherwise your blogpost is just excellent, a worthy read.

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Yes, it is approx that much, this year. Then falling 0.5% each year afterwards. By powering up your steem, you earn interest, which is 90% of this inflation. The remainder is what makes up the daily reward pool.

One thing that certainly doesn't help is the reward shares always being displayed in USD on Steemit. It would be a big improvement if people saw their rewards showin in STEEM because that's actually what the payout is (or was, now it seems like SBD mostly)

"But what I fear they're not aware of is that the amount of STEEM they'll earn in the future -- should Steemit go mainstream -- will be a tiny fraction of what they're earning today."
Good point of view. Never thought about it that way.

I definitely agree with you @gigafart! You give us motivation to invest wisely... When the price of steem is less than a dollar I sold 50% of my steem power. Now I regret that decision. Lesson for me I guess.

What I know is I want to be part of something big and steem is big.

I lock my steem down by powering up as well. I think in the long run it will be more beneficial. Not only will steem be worth more a year from now than it is today, it also grants you greater rewards when upvoting and gives users a general idea of your reputation.

The risk takers will do this. The people that believe will do this. We have to show the way. They will all realize at some point.

This is one of the posts which makes you a bit wiser regarding Steemit & investments in general.

That's why I started as a minnow in 21 days ago... almost a dolphin, Invest people! :)

Most minows like me come without any investment money due to the lack of funds... I myself live in a somewhat third world country where 6Sbd is worth my daily salary... So I would be able to make any noticable investment..... It's way more efficient to gather so as you go and maybe make some on an exchange.
Cheers for the post and best of luck to you friend 🍀🍻
Goldie

This is excelent article. I am sure you will never forget that you sold your bitcoins with 20$. But this is life, we all have some bad moments. My example, when bitcoin was 200$ i decide to invest 200.000$ to build a building and not to buy 1000 bitcoins. 🙃

For many people, it is hard to believe that an investment could (almost) be risk free. For some, it is always NOT THE FEASIBLE time to invest. I remember 18 months ago, my friend begged me to invest 1~2k $ on Bitcoin (when 1BTC ~ 230$). For me back then, it was too risky investment and didn't want to spend. 18 months later and a missed opportunity later, people are SHOUTING to buy Steem. Not missing on this opportunity this time !!!

hello nice share I resteem it so get can reach more and more more of use Go Steeem

good post. for me it is all about the potential of the platform, so it is about the steem power. here is an opportunity to invest in coca-cola or mcdonalds when they were a start-up, except it will probably only take 3 years for it to go mainstream and world-wide compared to decades for coca-cola and mcdonalds

Dead solid right on. Of course, Steemit could be a flash in the pan, but on the off chance that it's not, if I don't have to cash out to eat--and I don't--I'm powering everything UP. More voting power, more influence, more strength to the community.

great read! thank you! i really needed this as a newbie here :) i will definitely buy some steem.. Thank you ! @camelx

Well said friend. Won't lie reasosns like this are why I believe in steem. Decided to take a risk and invest some of my hard earned money into it. But I think it will be worth it in the long term.

Good perspective. Disregard today's dollar value on our posts and think more about the Steem we earn from our posts, and what that value could be some day.

Wow!! Thanks so much for the insight. Seems like we all need to invest in Steem Power :)

One of the first thing I did was buy steem, right before the hardfork.
Only reason I'm not over 2k yet is polo.

I sold all my bitcoins for less than $20 a piece.

Ouch!!! :[

I have realized the power of steem on my 2nd day of steemit. Powered my steemit account. Also planning to power upto 500 in next week.

I'm new to the platform and currently manage my investments using poloniex. I have some steem on poloniex but withdrawals from the platform are disabled, which is why I can transfer to steemit and power up. I would love to have my steem on here but cant understand why i cant withdraw from poloniex. I'm new to crypto so unsure of other platforms to use and would have to sell my steem on poloniex to send using bitcoin, losing me money whilst the price is low

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I've switched to Bittrex, which is at least as reputable as Polo, imo.

I wouldn't rush to sell your current STEEM, unless you have deeper concerns about Polo's operations.

So why not, in the meantime, open a Bittrex account, and maybe transfer over coins if Polo doesn't fix things by the time the price has recovered.

Plus, if you keep coins on an exchange, you should at least lower your risk by using more than one.

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Thats great advice and your blog is spot on. It encouraged me to transfer using another platform... just took a bit of effort.... I see the irony in claiming that you're committed to steemit then keeping money elsewhere!!! Xx

Thank you for sharing your opinion ! Upvoted .

I bet this is how you feel about cashing out those bitcoins so early. I never bought any even when they was super cheap. My lose for sure.

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:]]]]

Excellent article. I'm in the "learning" process right now. ANd, this is all very interesting. I'm going to hold on to my steem currency as I think it will have great value within the next year or two. Like $10+. Thanks for the insight @gigafart

Only if i held when I was decent steempower...this post hit home and i'm holding on for longevity now, cheers @gigafart!

I think something that gets overlooked a bit is purchasing steem with bitcoins. That may not sound like a big deal to people with knowledge of cryptocurrency. However, for people mainly interested in the idea behind the site it can be an issue. It would be nice if steem power could be purchased without bitcoins. I don't think that would ultimately solve the problem but it may create alot more buyers. Also some people may think the price is too high.

Great article. Thought provoking and makes a lot of sense

Currently I'm lucky if I earn $1 on a article. Investing a large sum in steem is a bit risky for me now.

Great way to put that into perspective.

Your post added some perspective for me. I'm in it for the long haul with Steem.

The whole market seems pretty hot but actual real world use cases like Steem still seem pretty compelling.

Thank you, this is a very good explanation.