VEST Rewards Are More Important Than Post Price
It's all about the VESTS!
I analyzed something tonight which I've been meaning to do for a while, and it was quite encouraging. When evaluating the "financial success" of my blogging on Steemit, it's easy to only think in terms of the dollar amount shown next to my posts' author rewards.
That's not the whole story, however.
For someone like me who's interested in Steemit as a long-term investment, increasing my Steem Power is the top priority. At times I play games with SBD conversions in hopes to buy STEEM cheaper in the future (and destroy SBD debt certificates in the process), but ultimately I'm hoping my Steem Power will be the valuable long-term asset which might pay me weekly dividends in the future.
It encouraged me to start thinking about my post rewards in terms of VESTS and not SBD or $$$ values.
Let me give you an example. I recently got this reward for a post I'm quite proud of:
If you scroll back through my blogs and just look at the $$$ values next to the posts there, you might think something less than $20 isn't that big of a win for me, compared to some others I've been fortunate enough to enjoy.
As an example, compare it to this post:
And this comment:
Here's the interesting part. The comparison post actually resulted in fewer VESTS than my sex talk post. 96164.791603 VESTS compared to 101222.237391 VESTS. And the comment which paid out $232.33? That only slightly bested it with 110853.593261 VESTS.
Here's a visual breakdown of the spreadsheet I was using to find these values:
For someone like me who uses SteemWhales to track my ranking (currently listed as #327 by Steem Power), this is really good news! It means the $$$ number next to my current posts should not be compared to $$$ payouts of previous posts. Interestingly, the next post of mine sorted by VEST rewards was actually lower in $$$ than the post mentioned above:
The point here being: Don't focus on the $$$ payouts if your long-term goal is to increase your Steem Power. Just keep creating great content, build a following, and add value to the community.
If you're curious how I got this data so I could play with it (and if you'd like to do the same for your own VEST rewards), here's the process:
- Download and install the Piston command line tool (thanks @xeroc!).
- Run a command like this, but use your own username:
piston history lukestokes --type author_reward --limit 1000 > author_rewards.txt - Import the
author_rewards.txtfile into a spreadsheet program like Open Office. - Use the Data -> Text to Columns feature to split out the
"vesting_payout": "96164.791603 VESTS"column to separate columns using",:, and(a space) as delimiters while merging the result. - Now you can sort by VEST payouts to see everything together.
Of course, the easier way to view this stuff is to use @jesta's Steemdb and click on Activity -> Rewards for your account. That won't show all your detailed activity history, but the blue line in the graph should give you an idea of what your VEST rewards have been over time.
Moral of the story: Stay encouraged if you're trying to increase your VEST amount, even if your payouts seem lower than they once were. If this platform and cryptocurrency do become more valuable in the future, those holding VESTS will benefit the most.
I have no idea what the floor will be for the price of STEEM nor what a recovery may look like in the future. I do know I'm still really enjoying this platform and the community which gives it value. Thank you for following along with me on this journey.
Steem On!
Note: The rewards for this post have been set to power up 100%.
Interesting analysis and good to know how to use Piston to mine this information. You are right, it is easy to fall into the trap of only thinking about that dollar amount.
Another good way to think about this is that there's a fixed amount (percentage?) of Steem to distribute everyday, and the value of that Steem in USD is always changing. Since the big summer price spike, the value has been trending down. A $300 pay out a few months ago is basically equivalent to a $30 pay out now (roughly, I haven't done the exact math, the point is the USD value of all those big whale votes has gone down). But those two pay outs might be the same in terms of Steem Power / vests. So trying to compare the USD amount is like comparing apples & oranges; comparing the underlying vests is as you say a truer representation of how much you are improving over time.
Unfortunately I think most average users will remain more fixated on the USD number. I kind of wish there was a way to change the pay outs to display in vests instead, to encourage people to think that way.
True, the $$$ has a significant impact on us, as I've talked about before. I too would love to have an option to show VEST values. Unfortunately, even the white paper doesn't really explain VESTS well, IMO.
My impression is that vests can be thought of as the smallest sub-unit that Steem Power can be divided into, and the code that runs the Steem blockchain works in units of vests, not Steem Power (correct me if I'm wrong, as I think you have a better understanding than me). Steem Power is mainly an aid for humans, an easier, more digestible number to display to the end users of the system.
That makes sense, but it's also a bit more complicated than that since the ratio between VESTs and Steem actually changes over time. So... yeah. It's confusing stuff. :)
Interesting, can you explain in simple terms how Vests provide value?? As opposed to SD or Steem. Would be appreciated.
Hey @themagus, my pleasure.
VESTS are the value your steem wallet really has "under the hood". You can view that here https://steemd.com/@themagus and see the relationship between VESTS and STEEM here: https://steemd.com/distribution
If you see the number of your Steem Power going up in your wallet, that just means you're getting a portion of the newly minted STEEM according to your VEST holdings. Steem Stats shows this as well https://steemstats.com/#/ if you go to Accounts -> Steem Power. You can see how much your VESTS earn you in terms of Steem Power.
Steem Power can be seen as vested shares in the Steemit economy. STEEM (liquid steem), on the other hand, is getting inflated all the time with creation of new Steem by the mining process. If you hold STEEM, your value will go down substantially due to inflation. SBD are certificates of debt against STEEM. You can convert them (which takes 7 days) as a smart contract to get $1 of STEEM. SBD are great as a stable currency as long as the dollar peg is maintained. Unfortunately, with the dropping price of Steem, it's becoming harder and harder to maintain that peg. Also, with each SBD created, it essentially creates double the value which can further drive down the price unless there is enough demand to purchase up all that value.
In addition, holding Steem Power (i.e. VESTS), you can earn even more rewards for curation as your votes will have more influence. The downside is, they are not liquid. It takes 7 days to power down and even then you only get one 104th of your holdings out as liquid STEEM.
I hope that's helpful. Please ask any further clarifying questions you may have. Also, check out the #price channel on steemit.chat. I learn a lot there every day. There are no stupid questions and this is really complicated stuff. I've been trying for months to wrap my head around it all, and I'm still just scratching the surface.
Great answer...big thanks @lukestokes. I will try wrap my brain around those links you gave. I too am here for the long haul and only take Steempower for my posts, my latest earning 0.00c ......lol...methinks that is steempower-less.
You're welcome! Heheh. Keep it up, add value, and you'll improve. :)
Interesting. I have been aiming for more steem power and i always see the vests when i check steem stats not really knowing what they mean other than more vests equals more rewards.
Good post i csn look a bit deeper ito my own posts.
Ty
Glad it was helpful!
Your points are good. Looking at vests is worth while. However, if you're looking at market value of vests you're still not earning as much as before.
So yeah, your post a day ago earned more vests than some previous larger dollar earners. But if you went and bought the vests yourself using USD or practically any other currency you'd snap up far more vests per unit of money today than a Month ago. So your compensation is still lower by any metric you care to use.
Looking at vests alone is only part of the picture and you need to factor in other ways you could accrue vests to know the value of the actual reward you receive.
I like your perspective though and going long in any crypto currency with utility is a wise move IMHO.
This is so true. It's the main reason I stopped immediately powering up all rewards. I started accumulating a little bit of SBD and went through some conversions to try and increase my SBD holdings as well. My optimistic, idealistic (naive?), hope is to obtain even more VESTs in the future when we figure out where the true floor is. Time will tell, but yes, I like a crypto with utility I enjoy using every day. Steemit is a really fun place for me. :)
Thanks for commenting.
Oh yeah, having a ball even when the rewards are zero.
Because I'm inspired to prioritize creating content. The platform will be healthy the more of us put actual heart into it.
I can draw a parallel to my co-ed softball games on Friday nights. We've long been a losing team. We always try hard and we have a good time no matter the results. This season we're up 3 wins 1 loss. Not to diminish our past seasons it is more fun when you're winning.
So it's more fun to earn payout, but it's not a necessary ingredient in having a rewarding experience.
I can't believe I wasn't following you until yesterday.
I don't understand Piston and don't want to blow up my computer (LOL) but I do know that vests is where it's at! I wish I could afford to buy more Steem and power up but I can afford the time to write and increase my foundation here. IMHO, the money will come. I don't know when, but I kind of feel like the toad on the lily pad waiting for the fly. :)
Thanks for the follow. :) There are a lot of great authors here and I think we'll only have more as the community grows. Every time I find a new one (like yourself), I'm happier for it.
I'm hopeful the money will come as well. :)
I agree with your focus on obtaining more vests, as opposed to thinking in terms of dollar returns. I changed my focus recently, given my optimism in the long term future of Steemit, and the underlying currency. That Steem Power will be very valuable one day, and its a very good buying opportunity right now (if, like me, you are optimistic for the future of this project).
It would be like being there in the early days of Bitcoin and watching the first spike, and return to near zero, and saying "I told you it was a scam!" Missed opportunity.
Unless it's just going to go even lower next week. That, I think, is what keeps a lot of investors out. Those who are wanting to but in are waiting for the floor and we haven't found it yet.
Yes, I feel the same way. I've tried to make this point over and over in the price channel on steemit chat, but others are convinced the economic model here is so unique, useful comparisons can't be made. Time will tell.
I think that we all waste to much time and energy just for calculating this and that. It will be more useful for us as individuals and platform if we just try to do our best with posting and curating. Rewards will come from different sides and on different times.
Sure, but for uber geeks like me who really want to understand how this system works under the hood, figuring this stuff out can be really fun. :) Again, it's also encouraging because if we don't know what's going on, we might be discouraged to think our posts are less valuable than they once were, but from a VEST perspective they might be much more valuable.
Don't get me wrong,I agree with you 100%, but newbies are even more confused after reading. You doing great job and for people who are here for couple of months this kind of information is very useful.
Yeah, that's true. It takes time to figure this stuff out, time most people aren't willing to invest in something they don't see the value in. Having been involved in bitcoin for a while, I've been waiting for something like Steemit for years, so I saw the value right away which made it worth my time to figure it out. Bridging that gap for new users who don't get crypto currency at all will be tricky, but also really important.
Good Article, great point, and a new follower!
Thank you for the follow!
Thank you for explaining this Luke. Vests always confuse me. I am here for the long term and hope that we continue to build a strong community.
So much about Steemit confuses me. But I do enjoy learning. :) I agree, a strong community will continue to create value here via relationships and content, regardless of the price.
Wow, great post. This is very encouraging thanks. Most of my post are just below 20$. Could you resummerize in super simple laymens terms why a post with higher reward can be a lower vest amount than a post with lower rewards. I am trying to figure this out, how that could be possible but still can't quite grasp it.
The $$$ value shown next to a post is based on the feed price published by the witnesses. I think it uses a rolling 24 hour average. The VEST rewards you get (or Steem Power) is based on the weight of the votes you get. Like Bitcoin, the Steem blockchain is creating new value every day. Authors, curators, and VEST holders get a portion of that value (along with the miners). When STEEM was priced at $3, the payout would be much, much higher for the same (or even much fewer) VESTS. That's why a post today with the price way down may actually be more valuable in terms of VESTS than a post before. That said, if you took all that value and sold it back then into BTC or SBD and then waited until today to buy up Steem Power, you probably would have been better off. :)
Ok so that price feed is only relatively accurate. Thanks I understand it now. So the lower in value that steem/SBD go the easier it is to gain VESTS as rewards. So now is actually the best time to always 100% power up. Yeah, I know selling Steem/SBD at the high and then buying it back at a low and investing in SP, but that is the past now. but now is still actually the best time to convert steem/SBD into Steem Power, correct?
"Now is the best time" unless tomorrow is better. :) The price could keep going down. It's hard to know what the floor will be.
Haha truth, Thanks for the great lessons and teachings luke. Ive learned a lot from what you said and your summary.