Steem Dollars vs Steem Power?
I was reading one of the new posts by @dantheman and it got me thinking about the differences between the two as a far as strategy. I'm just curious to hear different people's thoughts on which they prefer to hold and build up.
Since I'm still fairly new, I've been converting to steem power every time I get any steem dollars. It seems to me that reinvesting in more steem power is important for growth early on, then only after building up steem power for a while will I let some steem dollars accumulate. Am I missing something, does anyone have a similar or different strategy? What do you think is best to do?
It's a liquidity issue. Steem Dollars can be traded out immediately for cash. SP can only be cashed out over 104 weekly payments.
Powering up is a good strategy, but you can send Steem Dollars to external exchanges and get immediate cash for them. You can cash some of them out and power others up.
But keeping them in just Steem Dollars allows them to stay liquid while also gathering 10% interest.
Thanks for the info. I suppose I'll keep up my current strategy. I like knowing that there is liquidity plus interest with the Steem Dollars.
It depends on your strategy. If you are not aiming to make a living from it, then you should be racking up SP as fast as you can, because it gives your posts higher visibility, it increases your power to affect curation, and it is a long term investment.
If you are making a living off it, and already at your SP level and with your follower network built, then it isn't so beneficial. I was not pleased with how much automatically allocated to SP in my recent rewards, because I am earning off this, and I am working hard to produce new original content, and 25% was my expectation and was somewhat disturbed to learn it was now at 60% allocated to SP.
Working to make a living, by this allocation, I am disadvantaged. My posts keep users interested, so I should not be forced in what way I allocate my SP as much as this.
Thanks for the detailed answer. Question though, you said you weren't pleased with the amount being automatically allocated to SP, but I was under the impression that this automatic amount was 50% for every user on steemit? This is not the case?
I don't have strategy and and don't really understand how rewards works but I read articles, post upvote and comment if I like and don't forget to follow. For now I just have peanuts but I don't dispair maybe one day my post can bring me some dollars :p So if you find how it works don't hesitate to make a post :))
This is a good question with good feedback....can we take it another step though.
How much SP equals $0.01 of voting power? Is there a way to calculate this. Only info I've found after an hour of research is something about RShares, but I cannot get a clear idea what the ratio on those would be either.
I understand this changes with voting power fluctuation, but if one is voting at 98% all the time and its worth $0.01 and their SP is only increasing why would it now be shy of $0.01. It's strange.
Great question. I have wondered about this myself. I hope somebody knowledgeable replies.
good question/good post
upvoted~
for now i prefer to power up! but im trying to hold some too so i guess im doing both lol
It all depends if you believe in the site for the longterm, or think it will fall apart. Powering up is a great way to gain attention, because people follow the power for votes. If you believe longterm, then the price of steem is cheap right now so you should be powering up as much as posible, Plus the rewards are higher right now then they will be in the future.
If you believe the Steem price will tank, then holding SBD is a better option because you will have much more buying power in the near future if you decide to power up then.
The big drawback to SP tho is the 102 payments over 2 years. The site could dissapear by then and leave you will worthless steem that could have been real cash at 1point.
If you think steem is your calling and you plan on being here in the future, buying all the SP you can buy is the best choice. You gain interest on SP while providing yourself an increasing amount of power.
The choice is in your hands
I really wish someone would make a clear diagram of how this works..... Some of the more "metaphorical" diagrams are just confusing. The metaphor of the power plant is incomprehensible to a noob because it assumes that everyone knows how a power plant works.... I've read many of these "how to understand steem" posts and they are far too complicated. If it can't be explained to a five year old......