I little more than a week ago I wrote about vote bots, those bots we pay to vote some post (post here).

I wrote about the service "STEEMBOT tracker" we can use to determine the possible financial returns using these paid vote bots.

I also expressed my expectations, most of these services will not result in a financial profit. And even when an event is profitable in financial terms, the profit is generally speaking, marginal; While we take a risk to end up with a financial loss.

Before I wrote that post and even since then and today, I've been in multiple conversations with Steemians regarding the monetary profit/loss to their actions, and realised most of the Steemians simply look at the pending payout value of their post and when this is considerable higher as a result of a paid vote - to what they paid for - they say: "You See; The vote is Profitable".

However, that may not be the truth!

In this post I'll try to explain step by step, how to determine if you make a loss or profit. You will see how easy it is to be fooled with regards to profits by the $ value increase of your post versus the amount of SBD you spend on the vote.

Assumptions

Before I go into the calculations, we need to make some assumptions:

• Author gets 75% of post pending payout value
• Curators/Voters get 25% of post pending payout value
• Vote bot is paid in Steem Backed Dollar (SBD)

Facts

In addition, we have the following facts:

• Post published with 50/50 payout option, meaning the post will pay out 50% in SBD and 50% in Steem Power (SP)
• Steem Power (SP) value in US Dollars = the same as Steem in US Dollars
• Steem Backed Dollar (SBD) todays value: 5,50 US Dollar
• Steem todays value = 4,50 US Dollar

Example

We now want to calculate the maximum amount of SBD we can spend to make sure we are not making a direct loss.

Now lets take the example the post value to increase with 40$.

40$ post value will give the author a reward of 30$, since 75% of the post rewards is for the author and 25% is for the curators/voters.

The 30$ to the author is paid as follows:

• 50% in SBD = 15 SBD
• 50% in Steem Power = 15 / USD-value-of-Steem = 15 / 4,5 = 3,33 SP

A 15 SBD investment into a vote increasing the value of the post with 40$, will result in breakeven in financial terms.

NOTE: Well, not completely, it gives a little profit, since the extra SP you get, is profit indeed. But, keep in mind, that profit is stuck for at least 13 weeks in your account (you need to power down to monetise SP). Also, keep in mind the risks you take!

Then This

In case the return of the vote bot is lets say 10$ less for a paid vote costing you 15 SBD - instead of 40$ it gives 30$ (still the 'double' of what you paid for) you will actually make a loss.

The author will get 75% of the 30$ equals 19,50$ paid as follows:

• 50% in SBD = 9,75 SBD
• 50% in Steem Power = 9,75 / USD-value-of-Steem = 9,75 / 4,5 = 2,17 SP

In US Dollars this payout is:

• 9,75 SBD * 5,5 = 53,62 US Dollars
• 2,17 SP * 4,5 = 9,77 US Dollars

therefor:

• Total = 52,62 + 9,77 = 62,39 US Dollars

while your investment equalled the value of: 82,50 US Dollars - namely: 15 SBD * 5,5 US Dollar / SBD.

Be aware, when the post pending payout is twice the amount you paid for the vote, you actually make a financial loss.

Note: Above statement is based on todays values - in terms of US Dollar - of SBD and Steem. With much lower values of SBD, above statement may need to be revised

Be careful with vote bots when you don't want to make a direct financial loss.

Questions

• Did you realise how easy it is to make a loss with a paid vote?
• What is your experience with profit and loss using paid vote bots?
• What is your prime reason to use a paid vote bot?

NJOY

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