My friend just deposited all his savings of 5 000 USD to buy Steem Power
I'm very concerned that one of my best friends just deposited all his savings of 5 000 USD to buy STEEM and STEEM POWER.
I've reviewed this platform and the economics behind it, and i believe he has made a great mistake.
Let me explain my point of view.
STEEM currency is going higher, ok i get it, but it's only because of the buying pressure and the "steam" that this platform is dragging around the world. People are very bullish on STEEM right now, it's what we call a bubble. We never know how high a bubble can go and when it will burst, but they all do.
The dotcom bubble, the housing market bubble and even micro bubbles like Nintendo and his Pokemon Go that are bursting right now.
How the economic system works at Steemit
STEEM is used to buy STEEM POWER, this STEEM POWER let you make more STEEM by holding tight your STEEM POWER and by posting on the website. Why do you think they are paying you to keep your STEEM POWER inside the system ? Because if too many people cash out at the same time, the economy would collapse.
Also, and this is the most important point to be made here, if you have to remember anything remember this, STEEM is created out of thin air everyday to pay for posts, this mean hyper inflation and hyper devaluation of the STEEM currency and the STEEM POWER. Your STEEM (both of it) is worth less everyday, but because of an illusion and buying pressure because of the bubble, the price of STEEM is going up.
STEEM prices may go up for a while till they will collapse and return to normal, that day, my dear friend will have lost his 5 000 USD unless he cash out before the collapse.
He deposited all of his savings
This great friend of mine is not a rich dude, he works hard for his money, he has a kid and a wife to take care of, he strongly believes that Steemit and STEEM are going to the moon.
I tried to explain to him the principles of the economic system behind Steemit, but he's totally blind and unresponsive. Yesterday his deposits into STEEM were limited to 1200 USD and today he announces me that he deposited 5 000 USD in total to buy more STEEM POWER.
My advice to my friend and to all of you who are doing the same thing
Cash out as soon as you can the amount that you deposited in STEEM and STEEM POWER, at least to break even in case the bubble burst sooner rather than later.
As he didn't believe me at all, i told him i was going to make a post here, and he told me that he would reconsider his action only if enough people think i'm right.
I've seen this so many times before. Only invest what you can afford to lose. Crypto is volatile and what is mooning today could be cratering tomorrow.
Yep, you got 182 USD for your comment, that's pretty weird as the post itself has 65 cts.
Najoh, I'm not sure if my comment deserves that kind of reward but I will tell you what I've learned in my short time here on Steemit.
We need more community interaction if Steemit is to thrive and commenting needs to be encouraged by users. Great content and an active community are the keys to our shared success . Best of luck to you.
Your post is missing the power of @rainman - so not that weird.
He didn't want a nobeliever like me to earn a few steem dollars i guess.
lol so you still want to earn a lil bit of steem dollars anyways xD
It's fun, that's it.
Or only transform to SteemPower what you earned by votes on steemit, as I state here: https://steemit.com/steemit/@capitalism/5-reasons-why-you-should-power-up-your-steemdollars-smd-to-steempower-sp
In one year from now a very likely scenario would be that you will hit your head to the nearest wall you find after you check out your friend's wallet!
"STEEM is created out of thin air everyday to pay for posts"
Yes, and bitcoin is created out of "thin air" every 10 minutes to pay for mining. So?
Your friend has gambling problem.
What could go wrong!?
I consider your views to be pessimistic, whereas I am more optimistic about this. Yes I do see inequality, and I do see others things which might raise the red flag. But I have not seen a behavior in the community, and the management, which gives me cause for concern. This thing is in beta and I think we owe them patience. Especially after they invented something which might change the world.
Sometimes it's perfectly OK to take a risk with something you value. Let us create a new economy together.
More power to him! Keep Steeming #steem
He probably shouldn't be investing everything he has into anything because there are always risk in not diversifying. He might look at it more like a long term game and figures it will pay off for him in 6 months to a year. But who knows. The strategy I'm using is building from nothing on here. Just the $10 free steem power and then I'm putting up a lot of good post. Here is my latest. I just made a post about this. Please consider upvoting me. I just upvoted you! https://steemit.com/steem/@brianphobos/linux-distributions-aren-t-confusing-but-crypto-forks-are-why-is-that
Yeah would be concerned with anybody putting any money they really can't afford to lose into any crypto coin/asset/platofrom including BTC. It's all high risk/reward. I totally get the excitement, pretty sure all of us here do except the trolls and people hired to spread FUD and cause divisions and fighting of course. Sometimes when someone has decided there is no reasoning with them, so here is to his success I hope. I certainly am not all in, I have a diversified crypto spread I think. But If you're luck lands on the side of reward and not risk when you want to cash out, then the all in people will gain the most. If not, they may lose everything. I would just say my personal experience is one of seeing lots of unforseen events taking place in this space. Sometimes good, sometimes bad. Recently I invested in ETH and the DAO, lots of hype around the DAO. They were the darling of the alt news. The code was supposed to be safe, was audited by a respectable crypto auditing company. And then as soon as it came it went. Hard fork saved DAO investors funds for now, but tha's another story. You never know what is going to happen around here. Anybody that tells you they do, is most likely ignorant. Good luck to us all!!