You Should Forget About The Money On Steemit

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What you should really focus on is……………. Steem Power!!!  

People participate on Steemit because of the allure of earning money for blogging. Many people may want to express themselves anyways without extra incentives, but what separates Steemit from most traditional blogging and social media platforms is the money.  Although the immediate monetary rewards are compelling, a very small percentage of people will earn enough to make a living and for most people the money will just help as part-time or supplemental income. However the other half of the rewards in ***Steem Power*** should be by far the most valuable in the long run if Steemit is successful.

Steem Power Is Ownership

Half of the author rewards are distributed in Steem Power.  The best way to think about Steem Power is that it’s an ownership stake in the Steem software network.  Each time you receive Steem power for your blog you’re receiving a piece of the ownership pie.   Steem Power is analogous to shares (ie.  stock certificates, equity) in a company.  The great thing about Steemit is that you can earn a share in the Steem software network without having to be an official employee.  All you have to do is sign up to the Steemit website and you’re ready to earn your stake at an extremely early stage of the network.  Imagine if you were able to do that with Google, Facebook, or Apple? You’d be retired on your private beach in the Bahamas right now.  Usually the only ones who can earn shares in companies are founders, early employees and angel/VC investors.  Most ordinary people would have to wait 5-10 years for an Initial Public Offering (IPO) before being able to purchase shares and have an ownership stake! 

The Startup Roller Coaster  

One difference between earning shares very early on in a startup and in the later stages of a startup is that its shares can be much more volatile.   Even shares of many successful later stage startups are volatile. Shares of an IPO might double in value right away only to go down by half after the initial hype.  For a very early stage startup in existence for just a few months you can only imagine how much more extreme the share price fluctuations can be. The reality is 90% of  startups don’t survive for a variety of reasons so people should be aware there is a large amount of risk involved.  

Turning $1 in Steem Power Into $180 or $7,700?

In general risk is correlated with reward so the greater the risk you take the more potential you should expect.  What is the upside potential of Steemit if the success rate of startups are so low?   The easiest way to estimate the current value of the Steem software network is to look at the market capitalization using Coinmarketcap.com.   The market capitalization is the value of an entire company (or cryptocurrency network).  To derive the total value you just need to multiply the outstanding supply of shares/coins with the price of each share/coin.  Currently the market capitalization of Steem shows around $70 million.  Let’s compare the estimated value of the Steem Software Network to a few highly successful companies:  

Twitter currently has a value of about: $12.6 Billion (180 times the value of Steem network) 

Facebook currently has a value of about: $360 Billion (5,140 times the value of Steem network)

Google currently has a value of about: $540 Billion (7,700 times the value of Steem network)

That means if you earn $1 worth of Steem Power on a post reward today if everything goes as well as possible it can be worth up to $180 or even $7,700 in the future!

The Millionaire Masseuse 

Do you know about the former in-house Google masseuse Bonnie Brown?  She worked part-time for Google earning $450 a week... but she received stock options.  In five years she made millions.   Now she gets her own massages and has her own Pilates instructor.  Article here.  The article also mentioned that an estimated 1,000 people at Google were worth more than $5 milllion… and that was in 2007!  There are probably many thousands more millionaires now.  It’s a story we can keep in mind to remind ourselves that owning a small piece of a huge success can be very lucrative.  

You Have Options

The great thing about the Steem network design is that it splits Steem Dollar and Steem Power rewards 50/50 to recognize both the benefits of immediate monetary rewards as well as the potential for exponential long term gains.  Users are then allowed to cash out or spend Steem Dollars immediately; they can also use Steem Dollars to invest in Steem power either now or later.  Users can keep Steem Dollars, speculate and purchase Steem at any point when they feel the Steem software network is attractively priced.   People who believe in the long term prospects will shift Steem Dollars to Steem Power as the estimated value of the software network becomes lower and cheaper.  If it’s a deal now, it’s a better deal at a $50 million market capitalization and an even greater bargain at $25 million.

If you are an author and have not had much success with a big payout, if the value of the Steem software network goes down and you finally get a big payout you’d be in a better position than if you got outsized gains earlier. Even though total rewards will decrease as the value of the Steem Software Network decreases,  you might be able to get larger relative shares at cheaper prices when you finally do get some of the higher payouts, especially if there is less competition when others are discouraged.  

Finally if you don't want the hassle of trading and you think the current price of Steem Power is attractive you now have the option to get your rewards 100% in Steem Power.  Simply click the checkbox that says: 'Pay me 100% in Steem Power' at the bottom of your post!

Conclusion

Getting immediate monetary rewards is great because it helps people pay the bills and fund any current projects they have. However those who don’t have immediate cash flow needs may want to find the best ways to accumulate Steem Power for the potential to gain exponential returns on Steem Power.    Those who might be frustrated with the small amount of earnings from their posts should be motivated by the potential that each dollar of Steem Power can turn into $100 or even thousands in the future.  Furthermore, people who earn Steem Dollars from blogging can speculate on prices and convert Steem Dollars into Steem Power whenever they think the Steem network is attractively priced.   Lastly the other great aspect of enabling people to earn ownership early is that many more people have a vested interest to help Steemit become successful.  Every user becomes an advocate and that should help the Steem network achieve long term organic growth.

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Image Credits: Dragonball pic / Software network pic unknown / Rest From Pixabay

 

@steemrollin