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Minnow University // Post Rewards // The Difference Between 100% Power Up and 50%/50%

Greetings Earthlings and Steemit friends! We have received several questions lately about this subject from new users so Shane (@swelker101) asked me to make a post about it for this week's curriculum. I'm sure many of you understand this already, but hopefully the new users who need this information will see this post!

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The External Market Value of SBD

In order to understand which post reward option to choose, you need to know the current external market value of SBD.
1 SBD is usually pegged to 1 USD on the external market, but during the last month or so SBD has risen in value on the external market.

However, within the Steemit payout system, SBD is always pegged to 1 USD and Steem is paid at its external market value in the form of Steem Power (SP).
Steem Power (SP) is powered up Steem.

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100% Power Up vs. 50%/50%

On the bottom right of the Steemit posting page you will see your reward options.
The Default option is set to 50%/50%. You can also choose to Power Up 100% or Decline Payout.

For the sake of simplicity, I'm going to give you two examples using fictitious numbers that are easy to work worth.
(These are not the actual values of Steem or SBD at this time. I will give you a link to find the current values of Steem and SBD at the end of this post.)
In both examples, 1 Steem will be worth 5 USD, 1 SBD will be worth 5 USD, and the post reward value will be $100 after the curation percentage has been taken out.

Example 1 - 50%/50% Default Option

In this example the 50%/50% Default Option was chosen upon posting.
This means that the $100 post in this example will pay be paid out with 50% Steem and 50% SBD.
In this example, 1 Steem is worth 5 USD and 1 SBD is worth 5 USD.
So you would receive 10 SP (50 Steem divided by 5 = 10) because Steem is paid at its external market value in the form of SP.
And you would receive 50 SBD because SBD is still pegged to 1 USD for post payouts.
However, on the external market the 50 SBD that you received is actually worth 250 USD because 1 SBD is worth 5 USD on the external market.
(50 x 5 = 250)
So the true value of using the 50%/50% option is 10 Steem plus 250 USD.

Example 2 - 100% Power Up

In this example, 100% Power Up was chosen upon posting.
This means that the post rewards will be paid 100% with the current external market value of Steem which in this example is 5 USD per Steem.
So, the $100 post value will be paid with 20 SP. (100 divided by 5 = 20)

So, as long as 1 SBD is valued over 1 USD on the external market, it is much more profitable for you to choose the Default 50%/50% option when posting.

Even if you want to completely power up it is still a better option to choose 50%/50% because you can exchange your SBD for a more profitable return on Steem.
So, going back to Example 1, since the 50 SBD you received upon payout is actually worth 250 USD on the external market, you would be able to exchange that 250 USD for 50 Steem which you would then power up. (1 Steem = 5 USD, 250 USD divided by 5 = 50 Steem)
Add that 50 SP to the 10 SP you received upon payout in Example 1 and you get a total of 60 SP as opposed to Example 2 where you would only get 20 SP total.

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So what the heck are you trying to say here Isaria????

When SBD is valued over 1 USD on the external market, you should choose the Default 50%/50% option when posting.

When SBD is valued under 1 USD on the external market, you should choose 100% power up upon posting.

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How to find the current market value of Steem and SBD

You can use https://steembottracker.com/ to find out the current external market value of Steem and SBD so that you can make the best decision for your post payouts.

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I hope this blog has helped you. I look forward to your feedback!

Minnow University is brought to you by witness @swelker101 with support from @isaria and @kubbyelizabeth to help new Steemit users understand the concepts and basics of Steemit and other STEEM blockchain platforms. We have working relationships with MSP at PALnet and The Writer's Block to help educate minnows on how to grow their accounts without resorting to spam or practices that may stunt their ability to flourish on the platform. Please join us at our Discord Server.