Powering up - the ultimate long term investment

in steemit •  5 months ago

Today I passed the 50 steem powered up threshold. I feel great, not that 50 is anything special, far from it, for now. The reason I feel great, however, is that I've reached 50 at this point when steem is still easy to acquire. "Easy?" you might ask. Yes, easy because I doubt this is going to last. It all comes down to the inevitable depletion of the prize pool in the long run.

Why will steem become harder to acquire than it currently is?

As the number of steemit users grows, we will see less and less rewards. Now, I know that sounds bad. However, it really isn't. Those of us who are able to acquire steem currently, will have an advantage when steem is hard to acquire. I would guess that once we hit a million users, acquiring steem will be about 3-4 times harder, meaning that we will be back to roughly the same rewards as before HF18 with the addition that those higher in levels won't be earning quite as much as before (if I understood correctly). But, don't be discouraged. The price of steem will rise as the difficulty level rises. It is a simple case of supply and demand.

Why is steem power the ultimate long term investment?

When you power your steem up, you'll be holding it long term, even if you decided you didn't want to do so. To many newbies to investing, this again sounds like a bummer. However, it protects those newbies from irrational actions such as selling when the price goes down. When the majority of those people are held down, the price stability will be better than with other currencies. Meaning that when the price will start rising again it will start of from a higher place and get to its new hight faster.

Now, when steem becomes harder to acquire through posting, the pressure to buy more becomes larger. Therefore, leading to prices going higher. This is how supply and demand works. This should at least in theory undo the adverse effect of less steem earned through posting. You get less, but it is worth more. The best thing, however, is that the steem power you've invested before will also gain additional value. And you got it cheaper. This is basically how any investment is supposed to work, but steem power protects you from yourself.

“The investor’s chief problem — and even his worst enemy — is likely to be himself.”
-Benjamin Graham

The best thing, however, is that steem power doesn't stop at being a good long term investment vessel. It also gives you power. The more steem power you have, the more you'll be able to influence things. You have a better chance to make more interest on your long term investment comparable to dividends or so, the difference being, you need to be active. This will let you earn more and more and through compound interest eventually you'll earn even more. By the time steem will be of great value, you'll have a bunch. Then you can decide what you want to do, continue making even more, or start powering down slowly. This will also let you consider your actions. You won't make rushed decisions even then.

Convinced?

Great! Start earning your steem power today and join me as I keep on growing my steem power that has taken me longer than for most who contribute to the community the same way. However, I try to think of the future and not get discouraged. I'm not going to lie part of being active here is the financial benefit of it, but I also enjoy writing about financial things, investing mainly. And hope to make an impact here. Hopefully as my steem power grows, so does my content wise influence. That I have yet to see, but people keep telling me that at some point people will notice my posts. Hopefully sooner than later.

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Great article! This never ocurred to me although it makes sense if your assumptions are correct:
"those higher in levels won't be earning quite as much as before (if I understood correctly)"
Are you sure that's true? Not saying it isn't just that I'd love to read up more about this specific topic.

Thanks for your article, I will likely be powering up some more now too! :)

Here is why I powered up over 3000 USD worth if any of your readers are interested.

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The reason I believe so is, that if I understood correctly the reward system was changed to a linear model from an exponential model, or at least more linear. Therefore, those in early levels will earn pretty much the same as before HF19, but those higher will not earn quite as much as they used to. Again, I'm not sure, but this is how I reason it to be if my other expectations come true.

Great post, thanks for sharing!
Im following you !
Resteeming this to my followers. Hope it helps a little.

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Thank you :)

Congratulations! This post has been upvoted from the communal account, @minnowsupport, by wealthy-easily from the Minnow Support Project. It's a witness project run by aggroed, ausbitbank, teamsteem, theprophet0, and someguy123. The goal is to help Steemit grow by supporting Minnows and creating a social network. Please find us in the Peace, Abundance, and Liberty Network (PALnet) Discord Channel. It's a completely public and open space to all members of the Steemit community who voluntarily choose to be there.

If you like what we're doing please upvote this comment so we can continue to build the community account that's supporting all members.

These are some great thoughts. Thanks for sharing. I had not thought about holding onto steem power like this before. I'll be following you for more great insight.

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Thank you, glad you found it insightful. :)

i had about 200 SP at the moment, i have been powering up a few times.
your post are really good, i love the way you explain some economic issue like a pro, while i know you are still good in other things. 😃😃

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Thank you again for your kind words. I want to come out as someone who knows what I am talking about but also reach a wider audience by putting it into terms everyone can understand. :)

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for a non native english speaker like me the way you explain the content of your post is really easy to understand.
opps it turn i posted the comment in the wrong place. @wealthy-easily

Totally agree. It's actually quite a scary thought how amazing Steem is on an investment point of view!

Awesome post brother!

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Thanks. It's true. Steem will probably make a lot of people wealthy. Not just a small group.

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Very true. Without even putting any external money into Steemit, if you just work consistently, over the long-term your account could manifest greatly!

Talk soon.