Here's why your potential payouts are going down
When Hard Fork took place on June 20, we were all very enthusiastic about our potential payouts and the value of our votes. Since then you have probably noticed your vote is worth less and your potential payouts are decreasing. You may be wondering why. The price of Steem is a bit lower. That's one factor, but there's more.
As I hear many questions about this issue I would like to explain how the potential payouts are calculated.
How are payouts calculated?
To calculate a potential payout there are 4 important factors:
- -1-. First, of course, the price of Steem. A higher Steem prices means higher payouts. It's that simple.
- -2-. The second factor is the number of rshares you receive on your post. The number of rshares is calculated on each upvote with a formula using the Vesting Shares (Steem Power) of the voter, the weight of the vote and the voting power of the voter. In short: If a whale gives you an upvote, your post receive much more rshares than when a minnow upvotes your post.
- -3-. The third factor is the reward pool (reward_balance). This is the amount of Steem available to be distributed among all authors and curators.
- -4-. And finally the total amount of 'rshares' added to all other posts. (recent_claims)
Huh? 'reward_balance' and 'recent_claims'? What's that?
You can search on https://steemd.com for 'reward_balance' and 'recent_claims' to find the current values of these important factors to calculate a payout. If you do this again a few hours later you notice that 'recent_claims' is currently increasing while 'reward_balance' is decreasing. This is not a good thing for our potential payouts.
At this moment the reward pool is filled with 1,097,732 STEEM. This amount will be equally distributed among 160,003,173,250,864,636 rshares (recent_claims).
1,097,732 STEEM / 160,003,173 Billion rshares = 0.00686 STEEM for every 1 Billion rshares.
Let's say the reward pool stays the same, but 'recent_claims' increases. Then the amount of STEEM your receive per 1 Billion rshares decreases. So even if the reward pool and the price of Steem remains the same, your potential payouts can change. It depends on how much the whales vote on other posts than yours. If they wouldn't vote at all, 'recent_claims' would decrease, which would increase your potential payout. (unless a whale would vote on your post)
The 'experiment'
That's exactly what happened during the so called 'Whales-no-voting experiment'.
A few months ago, the whales @abit and @smooth decided to start an experiment. They stopped upvoting for a while and began to downvote other whales if they voted with too much rshares. The whales stopped voting, whereby the 'recent_claims' decreased. This was a shift in power from the whales to the minnows. Since the whales missed a huge amount of curation rewards, I think we should be grateful for this experiment.
Hard Fork 19
When Steem forked to version 0.19.0 the 'whales-no-voting experiment' came to an end. The whales have started upvoting again which now greatly increases the 'recent_claims'. More rshares are added to 'recent_claims' causing the rshares you received on your posts to be worth less. Besides the decreasing reward pool, this is the main reason for the decline in your potential payouts. The small drop in the price of Steem is only a small factor.
Now what?
In the coming days and maybe even weeks I think we can expect to see the 'recent_claims' to increase more while the reward pool decreases further. The reward pool has to find a new balance where the amount of Steem going in each day will be equal to the amount of Steem going out each day. I have no clue how long this will take. If anyone can explain this to me, please be my guest :)
I hope this post was helpful to understand why your potential payouts are going down. Please share this post when you hear this question being asked.
I do not want things to be too balanced. I love whales and I want to be a whale. I love capitalism and money and profits and competition. If I am better, I want more money than others. I do not like it if everything is equal. Some will make a lot of money and some will be very poor. I want people to be poor and some to be very rich. Maybe, we will find more balance between shares and money. But I am not too sure. But maybe we should buy a lot of Steem crypto now and maybe Steem will rise in value in the next ten years by ten to one hundred times its current value right now.
If we don't have some kind of balance then Steemit can't grow and attract new users. At only 200,000 users the project will fail without a significant upsurge.
If earning STEEM for authoring and curating content is what initially attracts us to the platform and that ability to earn is only in the hands of a few whales, then how can the ecosystem thrive? Then it just becomes a centralized hierarchy with little incentive to join it over other social networks that are far more advanced in nearly every other way.
Being around 1 year old Steemit needs to work out its kinks in order to grow and bring on new users. That means balancing the system
First and foremost I think it's important for people to have an understanding of what rewards actually equate to on this platform. It's easy to get distracted by the trending page and think that literally anyone can do that, but five seconds of thought on that idea should dismiss it from your mind. If your interest is in coming somewhere to author and curate where you won't have to worry about being censored, then this is the place for you. If you're here to earn $1,000 a day and you have nary a following anywhere else to support you, you might want to adjust your expectations.
Secondly, as time goes on (and as HF19 has demonstrated) voting power and investment moves away from the majority stakeholders. Yes, it's still intensely concentrated, but power has been steadily and consistently shifting away from the whales to the minnows and dolphins. It's working, albeit slower than some people would like.
Well said, and also encouraging for those that are here for the right reasons.
If you are here just to get rich quick, might want to adjust. Welcome all long haulers!
That's really what it's come down to in my experience. Especially with the uptick in Steem prices recently, there has been a lot of onboarding people (just like we saw last year) that are here to make a quick buck. Some of them get lucky, but most realize that earning money here either requires extraordinary luck, or a lot of hard work. Sure this loses us some folks, but the ones that stay understand the beauty of the platform, and those are the people I want here. :D
I don't think it's about getting rich. It's about understanding what is initially sparking people's interest to join Steemit. Consider the alternative social network options first where all of your friends are, where features are fully fleshed out TODAY. Something has to provide an incentive to join Steemit and it can't just be that it's a new social network.
Feature wise, today, Steemit is similar to what Live Journal was back in the early 2000's. And that's absolutely cool. But, as such, it is competing in a space with options that are more complete, where friends and families are already entrenched.
To start the process of building a new network on a new platform has to come with an incentive because we've seen way too many platforms come up in the past ten years trying to compete without a true value proposition. Being just another "me-too" service they just couldn't get that network effect to work for them and died out. There has to be something unique to catch one's attention to dive in.
With Steemit, I don't know about you, but I was compelled by the idea that it's not ad driven and authors and curators are compensated for the effort they put in. Of course content is great, but to discover that required me to initially have some reason to go through the exploration process.
Now once a user joins and begins exploring they may begin to see that the community is what is keeping them there, which is the case for me, because the content is incredibly unique and rich, with an active and supportive group of people.
Once Steemit reaches a critical mass and the features on the service grow to match other competing platforms perhaps it won't matter as much, and the draw will just be it's such a great place to be.
But to ask a friend or relative to join today, there has to be something compelling or I'll just get the standard response of "Another social network? No thanks." Maybe that's ok for some people on Steemit, but it's not going to help us grow it further.
I'd love to know what you think about how to grow the service and convince others to join so that the user base explodes and we can reach the masses.
Well the big draw for me and a lot of the people I onboarded initially was the lack of censorship. Unlike Facebook and other places where content could be deleted wholesale, the blockchain is forever. Sure, downvotes can take away rewards and reduce visibility, but it's all there. Always will be. Unfortunately, the level of downvoting by certain parties along political lines drove most of those folks away.
Integrating a messenger function into the UI, rather than redirecting to chat via the drop-down menu, would be a tremendous boon. I've been talking about it for almost a year now, and it still doesn't seem to be a point of concern. That, on its own, would go a very long way to making Steemit more usable. Marketplace-wise, I don't think there's much the devs can do. We have a very active app community here bootstrapping Steem; that will come with wider adoption.
The point I was making about "getting rich" was it was the same tidal wave of interest that sparked the first wave of widespread adoption in 2016 that we witnessed this year. I haven't looked at it, but I'm certain as the price of Steem stabilizes, and voting patterns normalize again after HF19, we'll see a large number of inactive accounts again. Likely not as bad as before, but I'm expecting that. It's an effect of the "get rich quick" mindset that a fair number of people joining here have.
Great points. Makes sense regarding censorship. And that is quite a refreshing take to be certain. In the work I do we're always having to be cautious on YouTube, Instagram, and Facebook in particular due to increasingly strict guidelines. As a result it takes some of the authenticity out of what we do. And I do hate that. You have me thinking there.
As for messenger functionality. YES!!! Using Steemit.chat right now but man... it's just not the same as staying on this platform. I'd love to see something like that. And I think that's the point is to make Steemit easier to use and for it to contain features that have become standard practice. It will happen overtime, I'm confident about that. But, since it is being bootsrapped, as you pointed out, the process can be a little more drawn out. And perhaps that's actually a good thing so the kinks can be ironed out first.
As for the "get rich" aspect you've been here far far longer than I have so this is a good history lesson. A spur of new active users which drop off rather quickly. I'm guessing the latest movement may have come with the rise in the value of STEEM from mere cents to dollars within a couple months. Let's see where it goes, BUT the core reason why I'm so positive about Steemit and STEEM is there is an actual community here using a functional product that works.
As someone who is a fan of the entire crypto space, this is proof that blockchain technology and decenrtalized services make sense and can thrive. Just so fascinating on that front.
Anyway I won't go off on a tangent anymore here. Thank you so much for your thoughts on the matter. Really helped me to see another angle to what is bringing people into the community. :)
When my upvote is worth $0.00, it's a huge disincentive for me to upvote. Why bother?
Spot On @anarcho-adrei Spot On
I really like how you laid it out here. 100% Agree
After reading your post I absolutely agree with you that If you are here to make your fortune then perhaps you should seek another avenue. I am here because I am tired of FB sensoring and I like to read, write and respond to true emotions.
I agree, balance.
So far I have met MANY people, and From all over the world.
Steem has the possibilities to become much better, but those whom are here just to get rich, gathering a following of hundreds, that just upvote each other without reading anything in the first 5-10 seconds is disheartening to those who are really putting in great work and posts.
🙌
I dont see what you are saying happening. I see all the power based on stats ive seen in the hands of .005 % of total. Isnt that the same ole top down program. That also means there is still a sort of regulation of content also based on the controlling few by flagging content and other means. Sorry but the platform has a history of being not so clear and understandable . I am not holding my breath that it will self correct. Pay what you want for the coins but the power needs to be equalised. Majority rules!
It's as if it's baked into the algos (plural of algorithm, not meaning plural as the personification of sorrows and griefs [which are there represented as the daughters of Eris, Greek goddess of strife. Algos in Greek is a neuter noun literally meaning "pain"]).....
Imagine if you will. Fraud Inherent in the System (and hardly anybody sees it, but a few do....).
~ You can set up two different types of Networks, a bot or a human one.
~ Each Network should consist of a set of seven Accounts.
~ You can have 7, 14, 21, or 28 (and so on) Accounts, logisticaly each set of seven would be considered it's own Network.
~ Concentrate each Account on a specialty target - usually blogs about how great the steem platform is, cryptocurrencies, and the markets themselves. Each Network should also focus on recruitment, new user registration (the bread & butter), & encouraging mass investing into the steem system. Best results when your Market is the majority of people who basicly have no clue about finance, marketing, or running a wallet (who treat steemit like facebook and might or might not figure out the markets later).
~ A Network Schedule would be set, most probably in variants of 7 as well.
~ All 7 days of a week each Account would refrain from upvoting or flagging anything, save for one scheduled Account (acct. 1 on Monday, 2 on Tuesday....). ~ Though doing as little upvoting as possible, the other 6 Accounts would primarily comment/engage only with other Accounts in any other of your Networks.
~ The scheduled Account for it's particularly scheduled day would follow the following script:
~ Account posting should be limited to 4 per day (remember, any posts after 5 in a 24 hour period exponetially decreases the payout value of all posts in that period).
~ The only day any Account should do any active upvoting would be only on it's scheduled upvoting day.
~ Occasional flagging of high value content is encouraged to maximize the rewards pool for your Network's benefit. Being careful not to over-use it, most of the time it may even go un-noticed in the longer voting lists. Though not exactly "flying under the radar", maximizing affect in relation to rewards pool is to flag posts/comments who's value are less than your vote's value, essentially only returning all those rewards-from-others to the rewards pool in exchange for your 2% voting power....
The Witnesses make their pile, anyone running this set-up makes a pile, and a little bit of scraps left for the rest (just enough to keep the masses chasing it).
Battle of the Bots
I agree, crypto lends itself to capitalism more so than socialism/communism.
awesome
i agree ....
Are you opposed to everyone being rich?
if everybody is rich, then nobody is rich
If everyone is rich no one is poor
but isn't rich :P, if everybody is rich, everybody has the same - and is therefor not rich -just average
i would prefer nobody is poor, as hard workers have to get rewarded (like: being superrich)
but i guess we are thinking in the same direction, and i definatly agree with you
I'd say the best world would be one where hard/good work is still recompensed by said workers being richer than others, but where the poor aren't lacking in housing or food (it's just very "poor" compared to the rich).
that's a world i would like to live in!
Yes. Where perhaps it's about levels of rich'ness based on having a Rich regard for all life here on our planet.
Rich / poor divide reflects a collective cognitive dissonance in my opinion.
@worldclassplayer a world where poverty is relative not a biological threat to someones existance. That sort of world. I agree
But what would be done with people who can't work hard because they're ill or disabled? Are they just unfortunate because they're on the short side of the stick?
They'd be considered "poor" and have the same resources of basic food and housing.
Of course, there'll probably be system in place to help those with disabilities or disease with adequate help and health care..
it's not like philanthropy will vanish. In this future it'll just refocus on other things than food and shelter for the poor, since those are a given. So helping those with disabilities overcome them ( or... you know... fixing said disabilities.by the time we get to such a future as this, I'd be astonished if we couldnt fix nearly every handicap possible).
i kind of feel the same. It keeps us motivated @joeyarnoldvn
great
I agree. Its FORCES me to produce and make better content!!! I have no problem with capitalist philosophy!!!!
awesome
Very helpful thank you for explaining!
jerry ur damn video got my into steem, i put almost 30k just like u in it already, might have to put another 100k in.
Thanks, so well explained!
Yes this is an incredibly useful post.
I myself have not noticed a drop because I have no way of gauging if my payments are going up or down over the longterm.
is there a tool that provides this function?
Thank you so much for answering so many of my questions.
Upvoted and resteemed
You can check how much your own upvote is worth on https://www.steemnow.com. I use this as an indicator.
Yeah I love SteemNow and it just stays open in my browser all day long so I can keep track of voting power and what is going on. It's really the ultimate tool and you did a great job making it. I do have one request: There is currently no easy way to find when someone mentions your user name on steemit. Could this be added? Still, I love your app. It's fantastic!
Thank you, good to hear :)
There is currently not an easy was to retrieve mentions from the blockchain for as far as I know. Maybe later... Thanks for your suggestion anyway.
No problem!
Same here, it has become the most useful tool so far :)
Thank you for the share this tool is amazing!
Great tool. I love it.
WOW!!! Cut and Dry. Thank you so much for this. I have realized a huge change in the Downtrend... Account balance is Lower and Rewards are much much lower... That few day window things seem to be greatly improved, Now the grass does not seem as green.
Thank you very much!!
What are your thoughts on Powering Down?
me personally am just rying to build up my steempower and wont be powering down for quite some time.
Thanks Man' for your opinion. I want to build it up so when the Masses finally catch on this will be epic.
Yes building up now is the best strategy.
Get your sunglasses ready, I think future is incredibly bright.
Best post on explaining all this!!!
great explanation. and thx for https://steemnow.com/
That explains a lot and the comments below make it very clear that there needs to be balance ourelse the steemit community will be crushed under it's own greedy weight.
thank you for getting straight to the point and proving the facts. good blog. I was wondering why they were going down
That was an incredibly well done post. I was not really sure how HF19 changed things, but now I feel like I have a much better understanding. Thank you!
Great explanation!! I've been told that it will likely reach a new equilibrium within a few weeks.
Care to elaborate?
The post does a good job describing the situation. The rewards payouts are recalibrating to the increase in voting activity, as well as the linear rewards formula. There was an initial spike in payouts right after the HF due to the changes, which caused it to start paying rewards from the rewards pool at a faster rate than they were being replenished. I've been told that it is expected to reach an equilibrium point within a few weeks, at which point the rewards payouts should be adjusted to the new level of voting activity and rewards formula.
Yes, thank you, but I was asking whether you have insight on whether they will go up or down. :D
At equilibrium, the total amount of rewards paid out should equal the inflation rate. If we assume that prior to the HF they were at equilibrium (which I am not 100% sure we were) then there should be no net change in total reward payouts after things settle.
What will change is the distribution of rewards. It depends on voting behavior, but most likely authors that were receiving high payouts pre-HF will be getting less, and authors that were receiving lower payouts pre-HF will be getting more. It is obviously an oversimplification which doesn't address all the scenarios, but that is the basic idea of how it should work based on the new formula.
If I still maintain dollar upvotes at 100%, I will still be amazed. I never thought I would achieve that. I was quite excited about the dimes I was giving out pre-HF19!