Steemit is going to be for many users, their first introduction to cryptocurrency and for some, it will be the only cryptocurrency they’ll ever deal with. So knowing these facts, how can everyday people see Steemit as a benefit.
Not everyone likes to trade or make investments, but everyone likes to save and have those savings bear fruit. I want to discuss how Steemit & Steem Power can be a very valuable savings alternative for the average person over more traditional savings products.
We live in an era of cheap money and easy credit. What I mean by “cheap” is we have runaway central banks printing fiat into oblivion, inflating the money supply and allowing the “thief in the night”, otherwise known as inflation, to decrease the value of your hard earned fiat you carry in your pocket. You can try to save, but the banks don’t need your money anymore, they have access to all the cheap money they want. You ever wonder why the interest rates on savings accounts and CDs are in the tank? This is why, they simply don’t need your savings anymore. Just thank fractional reserve banking and your local central bank printing press. Great job guys, you’re doing a bang up job. If you’re not sure what fractional reserve banking is, click here. Mike Maloney gives the best explanation I’ve ever seen and explains quite a few other very important concepts in layman’s terms. Even if you do put money into a savings account or CD, the interest rate is so abysmal, inflation and taxes make it a negative investment. Simply put, you lose money.
So what are we to do? Let me introduce you to Steemit and more important, Steem Power.
I’m going to outline several examples to show you the power of Steem Power and how it can be of great benefit to anyone who wishes to use it.
Example 1: Your Savings Account
The average savings account today pays a whopping 0.06 APY. For examples sake, we’re going to use a $3,000 investment and a 1 year investment time frame.
After 1 year, your $3,000 is going to earn you $1.80. Not exactly the returns you were expecting I imagine. Why? Because they don’t need your money. Ask yourself this one question and let it sink in. Why on earth, would a bank not need your money? It flies in the face of everything that is normal and anyone can understand there is something very wrong with what is going on today.
Example 2: Your CD (Certificate of Deposit)
Another very popular savings product. Currently the average CD rate for a 1 year CD is 0.27%. Using are same $3,000 and 1 year this is what we get.
Your $3,000 after 1 year has earned you $8.10. One word is all it takes to sum this up, pitiful.
Here’s a chart showing you just how much the interest rates for CDs have fallen over the years.
Here’s a chart illustrating the M2 money supply given this same time frame.
They say a picture is worth a thousand words. These 2 tell this story pretty well.
So on to:
Example 3: Steemit Account
Same as before, $3,000 saved for 1 year with full balance in Steem Power.
As of this writing, $3,000 in Steem Power should give you about a $0.60 upvote. Now saving your money in Steem Power will require some effort, which I’ll explain. There are some people who simply don’t like to post, and never will submit a story. That’s perfectly fine, and the beauty of Steemit, the community is designed for everyone. But let’s say you make 5 comments per day.(this is the effort thing I was talking about) They can be anything. Find 5 authors you like or find 5 posts on subject matter you enjoy, and make 5 comments with an upvote every day for each of them.
After HF 19, you get 10 - 100% upvotes per day. You make 5 upvotes for authors or posts you enjoy while also making a comment. You’ll earn curation rewards for doing so. You then upvote your 5 comments you make daily. Each upvote is worth $0.60. You’re giving $3 to the community and $3 to yourself daily. Basically you can look at it like a daily dividend. So let’s very quickly look at our $3,000 investment after a year.
$3 (dividend daily)
365 days X $3 daily = $1,095 per year
That’s equals 36.5% APY
This is not taking into account curation rewards and the price of Steem rising in value.
Now you’re beating inflation and will gladly pay your taxes. You’re still getting ahead in the game.
I wrote a post last week very similar to this illustrating the incredible opportunity that Steem Power represents, and this post also emphasizes that fact. This post came about b/c of several friends I’ve talked to about Steemit. All of them said the same thing, “I really like the concept, but I don’t want to blog or make posts.”
That is fine. Steemit is not just for bloggers, it’s for everybody. It takes a village to raise a child. If a member feels like they have to post to benefit from Steemit, and it’s something they don’t want to do, what will happen? They will sign up, not engage and eventually quit or simply won’t sign up at all. They will suffer by losing out on the many benefits of Steemit and the community suffers by becoming smaller and less influential. I have many more friends that read social media but aren’t actually active on social media than friends who are actively engaged, and I imagine we all fall into that same boat for the most part. The more users Steemit has, the more influential it becomes. It’s as simple as that. It doesn’t matter how great the idea is, without users, it is worthless.
Some community members might frown on having users vote for their own comments, but I believe that is a personal decision. I personally believe you absolutely should. If you’re making comments and voting on posts, you’re making contributions to the community and you’re active and adding value.
I think as early adopters it’s our duty to spread the word and let the world know about Steemit. The more creative we can become in showing others how it can benefit them, the more value it will have. If we can show normal, everyday people how Steemit and cryptocurrency can be of benefit to them in their day to day lives, watch out, Steemit could explode into something that truly revolutionizes the world. At the end of the day, that’s what we all want. If you can solve enough people’s problems, after awhile, you won’t have any problems of your own, and that’s how I see Steemit, it can solve a helluva lot of problems. Have a great day!!
(Disclaimer: This is by no means to be used as financial advice. I am an amateur investor and these views are my opinions only.)
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