Building Your Steem Power: Exponential Growth is Your Friend

How often do you Power Up? Once a week? As the spirit moves you?

I’d like to suggest that you should do it consistently. Every day, day after day.

Back when Steem Based Dollars actually were worth just about one green picture of George Washington, you could just default to the pure Steem Power payouts and watch your Steem Power grow. But in the environment we’re in now with SBD’s at significantly higher than $1, it’s crazy to not be choosing the 50/50 payout. If you post and comment on a fairly regular basis, micropayments will be tricking in at all odd hours.

Sure, you can cash out your SBD’s to an exchange if you want to move into another cryptocurrency or fiat. You can send them to a bot voting service. You can donate them to @schoolforsdg4 (please do). Or you can use them to power up your Steem Power. I and others have written about the many, many reasons to power up. This post isn’t so much to rehash those arguments as to show you the advantage of doing so consistently, day after day.

I’d like to suggest that you pick a time that works for you, and do it at the same time every day until it becomes a habit. Maybe you’re a morning person who wakes up and launches into action and 6 a.m. sounds like a fine time. Yeah, me neither. Evenings work best for me. After dinner and chores, a visit to Steemlandia fits my busy schedule just fine. Claim rewards, use the internal market to convert the day’s SBD into Steem, and then power up. As a matter of routine.

Sure, you could be a lazy sod and do it once every 30 days. Your earnings will keep trickling in. But you’ll miss out on the compounding exponential effects of doing it everyday like clockwork.

Let’s say you’re a Minnow who’s been here a while. You know the lay of the land. You post on a semi-regular basis. You curate every day. You get a smattering of upvotes on your posts, and sometimes on your thoughtful comments. You do a smidge of self-upvoting here and there, but not so much that you’re gripped by shame and ennui. You’re not a rock star here, but you’re a worthy community member. Your reputation has been climbing slowly, but it’s climbing. Your earnings average out to about one tenth of one percent of your Steem Power stake per day. You’ve got 1,000 Steem Power and between the SP that you’re earning and the value of the SBD’s that are coming in, you figure you’re averaging 1 Steem per day. Not too shabby.

You let it trickle in and claim it on the 30th day, powering up. You have 1,030 Steem Power.

But if you had powered up every like clockwork, you’d have 1,034.4 Steem Power.

1 Steem per day x 30 = 30 Steem
but if you compound that one-tenth of one percent over a period of 30 days,
1.001^30 = 1.0344
you end up with an extra 4.4 Steem Power

Whoop Dee Freaking Doo? Well, maybe yes.

Let’s take an extreme example. You continue earning at the same rate of one tenth of one percent per day but you wait an entire year to collect and power up. You now have 1,365 SP. You’ve made a 36.5% annual return on your investment. But if you’d powered up every day like clockwork, the compounding effect would have ended your year at 1,440 Steem Power. That extra 75 Steem might not seem like that much now, but at some point down the road if Steem is trading at $100 or $500, that extra 75 SP might get you that Tesla you’d been eyeing.

Granted, these are back-of-the-napkin calculations. Your increasing Steem Power translates directly into more valuable self-upvoting and curation rewards, but not directly into how others vote on your content for instance. But I’ve left out the interest that your SP earns so I may well actually be low-balling the effects of exponential compounding of powering up consistently versus doing so sporadically.

And I have chosen the one tenth of one percent figure rather arbitrarily. It’s ballparkish about how I’ve been doing, but I am not a particularly prolific nor wildly popular Steemian. Those who are may notice another thing about compounding. If you doubled that 1.001% per day figure to 1.002%, you might assume that your earnings would double. But you’d be wrong.

1.001^365 = 1.44
but
1.002^365 = 2.07

Because of the compounding effect, doubling your daily earnings more than doubles your compounded yearly earnings. And, over time, this effect becomes even more pronounced.

Interesting factoid: I found that image above on Pixabay after doing a search for “steam power” rather than for “steem power”. The times they are a-changing.

Disclaimer: This should not be construed as financial advice. I am not a registered financial advisor; I don't even play one on TV. Do your own due diligence. Batteries not included. Objects may be larger than they appear in mirror. Some assembly required. Do not taunt Happy Fun Ball.

Pixabay image