Be Aware of the fine print before investing into Steem Power, know the risks

Be careful investing in Steemit if you haven't done your due diligence first, better idea to use as a free account first!

In January 2018, I joined Steemit and deposited $3,900 into my account as Steem Power thinking it would give me larger influence and help me make more money.

70 days later after continued hard work and powering up earnings back into more Steem Power I am still down with a loss of $2,300 and getting worse by the day. Of course, this is mainly because of the fallout in the crypto markets themselves, however there are other factors to consider and be aware about as well including dilution. You should know what that is and how it works before investing money into Steem Power on Steemit.

Here is what I've learned during my 3 months of using this platform and through the research I have done:

1.) STEEM the tradeable cryptocurrency is diluted daily. This means more STEEM is produced and released to the markets daily causing a higher supply to be available to the markets and thereby continuously reducing the value of the cryptocurrency.

2.) To counteract dilution you need to be active every single day in the community and earn more STEEM, SBD or SP every single day equaled to or in excess of the dilution rate just to break even. You can also do this through earning through Delegations of SP for passive returns. However, if you do nothing and just let you Account sit idly then you will lose money or value of your account every single day just to diluation, independent of changes in the market.

3.) As time goes on and more and more dilution occurs, the less and less likely it will be to see highs in the value of the cryptocurrency as with when the markets were up as high as almost $9 for STEEM. The amount of STEEM available to the market or the Max Supply doubles every year. Therefore, the highs of $8.57 will be long gone and out of reach very soon if they are not already...

4.) Combine the negative effects of just trying to keep up with dilution with the fact that the markets have dropped drastically and you have a receipe for huge losses.

5.) If that weren't enough to scare you away from investing, here's one more big one to consider....Steemit arguably shares a small characteristic in a way, to a Ponzi scheme in the sense that it promotes itself on the possibility of easy or passive forms of income in exchange for your investment into Steem Power only to lock your money up for an extended period of time at which you cannot access that money or withdraw that money. Presently to my knowledge it takes 13 weeks to be able to incrementally get your money out of the account. You can withdraw any time from STEEM or SBD but not from SP which is what you need to seemingly have any ability to make any money at all on the platform.

With traditional securities or cryptocurrencies you can still make money in a down market or at least have the chance to through shorting stocks, Bitcoin, whatever and/or by day trading / short term trading where you capitalize in small shifts in prices to slowly increase the number of shares or coins that you hold seemingly just by selling at a daily high or close to it and buying back in over the next couple days or so as the prices creeps back down a little and repeating this cycle numerous time over a long period of time.

While holding Steem Power you cannot do any of those things and are seemingly stuck and forced to ride the wave downward toward large losses.

The amount of money that you need to invest or view it in terms of the amount of money that you need to hold in Steem Power just to make a few cents is horrifying for most. The system benefits the largest of holders and Witnesses who are guaranteed a 10% return on any new blocks of STEEM they produce which makes dilution less of a concern for the largest influencers who achieved Witness status.

Also, think of dilution in a sense that the money that you are losing or the value that you are using is the money that is being used to pay for the rewards that other people receive for authoring posts or curating posts. So you are essentially paying a daily fee just to be a part of this community.

It's for all these reasons and more than I would caution any average person that doesn't have much money to lose or spare to steer far clear of investing in Steemit or Steem Power unless you REALLY know what you're doing and you have a significant amount of time to devote to posting multiple posts daily and curating or you have a massive following that can sustain meaning earnings on your posts.