[Steemit Thoughts] Should we be powering up 100% on every post?
Should we all be powering up all of our posts 100% ?
TL;DR
When STEEM value is high, power up 100% with STEEM POWER.
When STEEM value is low, use 50/50 and buy STEEM with SBD and POWER UP. You determine what value is 'high' or 'low'.
Here's the scoop:
There are many users who prefer to 100% power up, but I've been thinking about the advantages of posting at 50/50 and determining the best way to spend SBD (including STEEM POWER). I see the advantage of powering up 100% to show commitment to the platform. There is something else to consider, however.
STEEM is so CHEAP right now!
With STEEM so low and SBD actually a little higher right now, wouldn't we be supporting the STEEM token (and the steemit.com platform) by regularly BUYING it with our SBD?
I would think that the best way to boost the STEEM economy is to use SBD to BUY STEEM as much as possible. The more buys, the more it shows demand, the more people are willing to invest into STEEM and STEEM POWER. It's a much better option than using your SBD for the bribe-a-bots which will just ultimately consolidate power to the bot owners.
Another advantage of 50/50 is that you are giving yourself the ability to decide when and how much to convert to SP. You also have the ability to sell your STEEM for SBD if/when it goes to the moon, ultimately resulting in a higher return. If the value drops again you can purchase more STEEM and the ultimate result would be more STEEM POWER and higher upvoting value.
Then there are the the Bribe-a-Bots...
TL;DR
By not purchasing STEEM, but choosing the upvote bots instead, we miss an opportunity to help increase the value of STEEM with our regular STEEM purchases, no matter how small.
Here's the Scoop:
The biggest danger to the platform (in my opinion) is that users, rather than purchasing STEEM, are preferring to give SBD to bidding bots. While this does give the satisfaction of a bigger number at the bottom of our posts, this actually damages the value of STEEM, as demand drops.
Yes, you read that right. Bribe-a-bots devalue STEEM.
If STEEM increases in value, we all win. Leverage your SBD to buy, buy buy while it's low low low!
By using SBD to make 'donations' to upvote bots, it's a missed opportunity to boost the value of STEEM with our consistent purchases.
The bribe-a-bots do not help the platform as much as we think they do. Remember, the bot gets paid twice for every donation once from you directly in SBD, then again with STEEM POWER 25% of their upvote value (you get to keep 75%). I'm not badmouthing the bots or the bot owners. They all have the best of intentions. And they work really hard to keep them running. But I don't think they're a good deal and they hurt the value of STEEM.
These are my thoughts on Powering up 100% vs 50/50 and debating the value of bribe-a-bots.
I hope you will consider the information presented here. I'd like to hear your thoughts. Comment below.
Steem on!
I think you have some valid points about selling SBD to keep price of Steem up whenever it seems to be undervalued.
How does the blockchain create rewards for each approach? I know that it generates new SP for the SP side at both 50/50 and PowerUP100. I believe that it also generates new SBD on 50/50, but not on PowerUP100. All the curation rewards I have seen are paid in SP.
There is an ongoing demand for SBD to feed into bidding bots. What do the bidding bots do with the SBD? In most cases I think it is paid out as ROI to the investors that delegated their SP to the bidding bots. Then what happens? SBD feeds into bidding bots, SBD is sold for SP to delegate to bidding bots (compound returns). If the feed their SBD into bidding bots, it's a closed system in three steps. If they sell for SP to reinvest and get compound growth, it's the same as taking SBD instead of SP, but two steps removed (and supports bidding bot economy in the intermediate steps).
If we think of Steem as a closed system, then whether your method or mine is better depends on whether we would want to support the bidding bot system. At that point it comes down to philosophical rather than mathematical differences. Are bidding bots good for Steem, should people use them, etc.
But Steem is not a closed system, and new money can be invested into it (either through buying Steem, buying SBD, or buying SP directly). If I post at 50/50 I again have the choices of selling SBD for Steem and propping up Steem immediately or passing it through bidding bots (which still props up steem, but at 2 steps remove). Except that now bidding bot investors have an option of selling their SBD, which would lower the SBD/Steem ratio, also propping up Steem.
If I post at PowerUp100, the logic changes. If I don't use bidding bots, I am completely removed from the SBD/Steem exchange rate (except for whether I decide to invest new money via Steem or SBD). In this case, your position is the stronger position, as I should be taking SBD and selling it for Steem to support the Steem price. But if I do use bidding bots, I am supporting the price of Steem either way... except that I will run out of SBD because I do not have a ready supply from posting rewards. To continue using bots without powering down, I am required to continue buying new SBD- so my new money comes into SBD directly, or comes in via Steem, is sold for SBD (depressing Steem price) which goes to bots, then to bot investors, then into SP for reinvestment (supporting Steem price)... much more circular and market neutral across my own buying/selling/powerup except that I have to keep bringing new money into the system.
So again it depends philosophically on whether bidding bots are good for Steem. If you don't use bidding bots or think they are bad, you should post at 50/50 as it will provide more support for Steem price (regardless of whether you bring new money in or not. Obviously continual new investment will provide even more support for Steem price).
But if you do use bidding bots (and I use them extensively; this is no secret), then posting at PowerUp100 shows a stronger commitment to Steem (and provides more price support) because it mandates new investment to keep up bidding bot use, rather than making new investment optional.
And anybody that actively uses bidding bots should be proactively investing into Steem to show that their actions align with a belief that bidding bots are not actually harmful to Steem.
This ran long, which means I might reuse portions of it in a later post. Don't waste good. I hope that you were able to follow all the logic, as it does get into some second and third order effects. I would love to hear your perspective.
x-post from my response to your comments on my post, so that your readers have equal chance to respond and tear me to shreds for using so many bidding bots. (:
There's a lot to unpack here. Let me know if you put this in a post, I'll check it out and comment. @ironshield
@josephsavage please put this up in a post jez you nailed it @ironshield you always bring in a cool topic and i will say, since i joined steemit this is one of the best post here an the funniest thing0 no good reward. Will resteem it now and lastly i will bring up my own point later
@josephsavage please put this up in a post jez you nailed it @ironshield you always bring in a cool topic and i will say, since i joined steemit this is one of the best post here and the funniest thing no good reward. Will resteem it now and lastly i will bring up my own point later
One of the best explanations...thanks! When I started posting here and there a little while back I wasn't sure which I option I should go with. As of today I currently have only ever used the 50/50 option. This post would have been helpful a few months back! :-D
Thank you. I thought powering up every time was the way to go until it was brought to my attention that every time we purchase STEEM it increases demand, influencing the price to go up. @ironshield
This has always been my dilemma.... Thanks for giving me your opinion. I've been 100% but will make my next post 50/50 till steem gets back to around $1+
It's nice to acquire STEEM and then decide if/when to either sell or convert to STEEM POWER. Once it's locked into STEEM POWER it's less liquid, but more useful. @ironshield
A great explanation
I was always using 100% but since Steem has been under $1 I have been using 50/50 and using market for Steem and then powering up when rate looks good
As for bots seeing lots of debate at the moment I personally hardly ever use them
I used to use them almost every time - until I started doing the math and realized how difficult it is to really profit well from them. I suppose if higher upvotes allow better 'exposure', then someone may justify the cost, but I just don't see the value. @ironshield
yes I know some feel the exposure helps and can raises a persons rating
I would prefer my rating to grow naturally rather then through bots
100% agree. I have some curation bots that trail my blog, but the bribe-a-bots are not fair play. @ironshield
100% percent true! @ironshield. It makes total sense to go 50/50 when steem is low and to buy it with sbd, thats what i do. you're right it does two things, more bang for your buck and you support the market for steem.
Great analysis on this!, and great post!
Cheers!!
Thank you. @ironshield
I think that your math makes sense. As for vote bots, I think tbey are a good thing , used for the wrong purpose. Imo opinnon most new users with low sp do not get the value they should on quality posts. They get many votes from users with low sp. What if users with low voting power could use bid bots to upvote others, instead of themselves?
That would make for a valuable gift. It would be a great way for new users to make a good impression among the more seasoned Steemians here. @ironshield
You know, you brought up some very valid points here! I was under the impression myself that it was the best practice to just power up 100% as often as possible. However, certain factors such as the recent dive in Steem prices should definitely be taken into account, so you've convinced me that I should, for now, at least, always use the 50/50 option instead of powering up 100% all the time. The only time I see that I should start powering up 100% all the time again is after the price of Steem goes back up to over $1. Am I correct in this assessment?
Yes, that's the smart way to go. Remember that with 50/50 you can easily convert your SBD to SP, but its difficult to convert SP back to SBD/STEEM. @ironshield
Hey @ironshield, this is a nice area of discourse you just opened up now. Thinking about the advantages of powering up vs buying Steem;
while
None of them are bad in the real sense of it because Steem will always be here for us.
Also remember that for the price ranges of steem to reflect, there has to be a great new change happening eg SMTs. So even if all of us keep converting our sbd to steem the prices may not really change that much unless we are whales with so much SP.
Anyway, I agree with you that we should avoid the Bribe-A-Bot effects...lets do this the traditional way.
Cheers man!
#Hug-Challenge is in its 3rd Week. You may want to check it out. Thanks!
Yes, i would encourage people to post 50/50 and use the SBD to buy Steem (using Market) and then power up. In the end it's the same as 100% powerup, but increases demand for Steem. Always enjoy your comments @nairadaddy. Thank you. @ironshield
Okay I now get where you are coming from. You want to drive Steem to the moon... Nice!
Cheers man!
#Hug-Challenge!
Steem vs SBD vs SP. Actually I don't think it matters.
Intuitively speaking, if you consider the three tokens as one system and evaluate how much money is going into the three tokens collectively, how could there be a difference for the success of the platform?
Looking deeper, I think the complexity lies in the SBD-dollar peg. There is an active monetary policy that serves to maintain this peg. If you buy steem with SBD it does not necessarily affect the market's appetite for steem.
If you buy steem with SBD, you have upward pressure on the SBD STEEM price which would lead to corrections in the SBD USD price and STEEM USD price. Arbitrage-wise, note that either the STEEM gets pricier or SBD gets cheaper in response, so it's not a given that STEEM demand is increased.
Just to cement this point further, suppose it is a given that you are choosing between the following two sequences:
The end result is the same, and once all is settled the market should not be able to distinguish these two cases or something is wrong with the market :). The only difference is that you get control over the SBD STEEM price.
I think the issue of bots on the balance between SBD STEEM is worth exploring though.
TL/DR: if the end goal is power up, it does not matter to the market whether you do either option.
Hello @eonwarped,
My thought is that by selecting 100% power up and earning STEEM POWER instead of 50% SBD, we forfeit the ability to decide when and how much to 'vest' (STEEM POWER). We also forfeit the ability to make quick and regular purchases of STEEM to show a constant demand for the token to help offset people who are selling off and lowering the value.
My understanding is that because STEEM and SBD are traded independently outside of the steem blockchain, that when we click on the 'market' and buy and sell STEEM and/or SBD, we are affecting the OUTSIDE market. I would think that our collective purchase (however small) would ultimately have an effect on the trading values on bittrex and bitshares and hitbtc and Cryptopia, etc as it shows further demand for the token, encouraging buyers to consider investing themselves.
If I were to use bitshares (openledger.io) to trade SBD for STEEM, it would show further demand for STEEM. I would think it's the same within steemit.com
So the idea is that additional 'buying' doesn't created demand if it's trading between SBD and STEEM, but if someone traded Bitcoin for STEEM, that would create demand. I'm not sure why that would make a difference?
Thank you for your detailed comment. Good food for thought. @ironshield
Right, so my point doesn't really dive deeply into the subtle interactions between SBD / STEEM. But keep in mind the fact that there is active maintenance on the SBD's dollar peg makes a big difference if you compare it to the Bitcoin / STEEM pair.
I think the main point I wanted to highlight was the two sequences above. A buyer considering buying into Steem should not care about which route you opted to take. So my intuitive market sense is that it does not matter. There are all sorts of micro adjustments going on due to the effects in aggregate but those all ultimately get corrected in the long run to what the market truly values.
But yes this is all very interesting to think about.
Hey @eonwarped! This is an interesting take on this topic. I love your viewpoint and I think I agree...
EVentually after all said and done...the same direction is the end-goal. Cheers!
#Hug-Challenge!
Thank you for this information! You answered a very valid and important question :)
I'm glad it was helpful. @ironshield