Rise of the Machines on Steemit

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Some time ago I wrote a post in German for the German community about the profitability of upvote bots and today the time has come to do the same in English for the greater good.

A few months ago I came across upvote bots, mostly bid bots, on Steemit, placed a few bids, got about twice the bid amount back in upvotes and was fascinated.
Blinded by dollar signs, I thought I had discovered the Holy Grail of Blockchain and could from now on make a living with Steemit & bots.
Write a post a day, send 100 SBD to some bot, get 200 STU back, paradise found!
But alas, I had overlooked a small but important detail, the Steemit reward mechanism.
This little bugger is explained quite nicely here and there is also a calculator to give you an idea about your actual rewards.

Next I realized that while bid bots are a brilliant thing for their owners, this is not necessarily the case for the users, since you can outright lose money if too many people placed senseless bids.
On steembottracker.com you can see what´s happening in the current bidding round and if it still makes sense to make a bid or if you just poop the party for everybody but the bot owner.
I also realized that many if not most of the last rounds were ROI-negative and came to the conclusion that apparently many people were acting even more blindly than myself.
In a discussion with @steemchiller, to whom I am eternally grateful for his wonderful tool steemworld.org (yes newer passengers of the ecotrain, looking at some of your VP there you should definitely check it out and learn to manage your voting power), I learned that he only uses minnowbooster and never had a loss with it. Unfortunately, minnowbooster does not offer high upvotes unless you are whitelisted.
Since the calculator at steem.supply is a bit too rudimental for my taste I made my own calculator in LibreOffice Calc, so Excel.
I would like to post it on Steemit, but a friend told me I would have to first embed it on a website in order to bring it to Steemit.
Since I don´t have a website I can´t do it that way, but I can copy and paste an example here and give you the formulas of the different cells, so whoever wants can build the calculator himself.
And whoever has a website or knows a way how to publish the fully functional calculator on Steemit is welcome to do so.

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I have achieved the above result myself a while ago with the new bid bot of my tribe @ecotrain.
This bot has a loss limit so you cannot lose too much, if people bid unwisely after you placed your bid.
At the moment the bot cannot give high upvotes yet, but this might change in the future.
More information here.


Explanations

STU - Steem Token Unit (the $ amount below an article)
SBD in US$ - actual rate on bittrex.com at the time of payout
STEEM in US$ - Internal Median Price on steemworld.org at payout
Market SBD/STEEM – best bid for the respectively needed amount on steemit.com
CURATOR % - from steemworld.org for the respective post after payout

Formulas

Attention! The * sign which stands for multiplication in the formulas is also putting stuff in italics on steemit, therefore I had to leave a space between * and the next cell name in the formulas, which of course you don´t need to do if you build the calculator in Excel or LibreOffice Calc.

E4: =100-D4
D2: =A2/100* D4
E2: =A2/100* E4
A4: =E2/2
B4: =A4/C2
A6: =(B4* C4)+A4
=> Sum of author rewards in SBD, to be able to calculate the Bid Profit in SBD
C6: =A6-B6
D6: =A6* B2
E6: =C6* B2
E7: =C6/B6* 100
B7: =A2/B6
=> ratio of upvote by the bot to the bid you placed, gives you an idea of the upvotes you really need to get to make a profit.
B10: =B6* B2
C10: =D10/E10
=> ratio of Default (50%/50%) to Power Up 100%, so you can check which method is more profitable. I would say that as long as Steem stays above 1 US$/Steem 50%/50% is better, but don´t take my word for it, play around with the numbers to see how the rewards are changing.
D10: =(A4/C4)+B4 => Amount of Steempower the author gets at Default (50%/50%)
E10: =E2/C2 => Amount of Steempower the author gets at Power Up 100%

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With such a calculator you can play with the different variables to see how your profit is changing.
This way I discovered a Steemit Paradoxon, the higher the Steem rate in US$ the lower your profit in SBD and your ROI percentages.
So if you are on Steemit for the long run you don´t want Steem to moon just yet, because you get much less SP then. Better to have a low rate and get lots of SP to build up your account faster, and then, after a few years Steem could moon, making you a millionaire.
But of course if you´re one of those people cashing out every little bit of Steem you´re making, then you probably might want a high Steem price in US$ right now.
But maybe at least you understand now that if Steem goes down you should post rather more than less to build up some Steem Power quickly.
Also after a price decline chances are that prices will go up again, giving you even more profit on your bids, which of course also works the other way round. So if prices drop a lot between your bid and payout time you might lose quite a bit of your profit or even become ROI negative, even if everything was looking good before. So price change after bidding is also a force to be reckoned with. Maybe another reason to make a post every day and bid on it, so hopefully the effects of price changes level out in the long run, win some, lose some.

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Here another example which looks good on Steemit if you just look at the STU, but once you do the math, there is not much profit left.
This also seems to be the main insight you could gain from this post:
high amounts of STU below a post can be deceiving, the actual profit at payout could be quite minuscule, respectively some people are doomed to make quite a loss and might not even be aware of that fact themselves, being mesmerized by that high number below their post.
So I hope you could get some value from my post, if only that looks are deceiving and nothing is what it appears to be.

@ecotrain